A new breed of IT is emerging that reverses the trend towards simple automated encounters with customers and is being used to enrich the relationship.

A new London School of Economics and Political Science (LSE) study into the new challenges for senior executives innovating with IT has found a strong evidence of IT as an enabler of strategic advantage in its initerviews with 22 chief information officers (CIOs) of leading global organisations.

The report said the debate between “is it or is it not strategic?” has been replaced with a more meaningful analysis and that the implications for the executive, and especially the CIO, are profound.

It said the current explosion in blogs, trading communities such as eBay and virtual worlds such as Second Life, highlight the appetite for richer, IT enabled interactions and a blurring of traditional relationship boundaries between employees, suppliers and customers.

Innovating with IT can often be stifled when automating, streamlining and enforcing process control is the only way of thinking. “On its own, this approach could kill your business, as customers leap forward in their expectations of the way they wish interact with you,” the study said. “The key is to never regard any aspect of the end-to-end customer process as finished.”

It also found forward-thinking organisations are seeing IT not just as a means of automating and reducing costs, but also as the basis for a step change in what is possible in the customer relationship, with an emphasis on interaction rather than automation.

By using IT to bring customers and staff together, it said businesses can move from providing products and services to providing experiences and ultimately developing relationships. This new ‘inside-out’ organisation could create interactions and relationships with customers that actually shape strategy rather than are subject to it. In doing so, senior executives must take a more collaborative role, acting as a catalyst or for innovation wherever it may evolve.

Dr Carsten Sørensen, senior lecturer in Information Systems in the LSE’s Department of Management and PA Consulting Group (PA) carried out the research.