Chief information officers should still focus on innovation, despite the need to reduce costs in the tough economic climate, according to IBM.

Clive Harris, chief innovation officer at IBM, who heads up the creative side of many of the firm's outsourcing partnerships, explained that customers want innovation to form an aspect of their contract with IBM.

"This has recently been a big factor in helping us win business," said Harris, adding that most innovation requests concern green IT, virtualisation, risk management, collaboration and social networking projects.

Harris said that IBM is often asked for advice about deploying social networks for internal use, because of its reputation for its own deployment of social networks, such as holding conferences in Second Life.

"IT companies are generally more familiar [with social networks], but other companies have a long way to go," he said.

Harris maintained that, even though surveys show most businesses holding back from using social tools, a lot of organisations are already moving to the " second phase".

"This includes using IBM's Cobra for corporate brand recognition analysis," he said. The tool allows a business to understand what consumers are saying about its brand, analysing not just the text but the nature of the comments and whether they are positive.

Harris claimed that Cobra is growing in popularity among retailers which understand that consumers respond more to personal recommendations on blogs and social networks than to corporate advertisements. "Cobra allows them to monitor comments and put forward the real story," he said.

Harris also pointed to IBM's Extreme Blue project which employed the skills of IBM's training programme graduates to give clients an idea of how to improve their web sites in order to appeal to young professionals.

IBM delivers innovation to customers by first agreeing the scope of innovation they are looking for, according to Harris.

"There is never a shortage of ideas. We normally end up with hundreds and then it is one of the client's ideas that we take forward and make happen," he said.

Harris also claimed that, if IBM cannot deliver the client's needs, he refers them to another partner.

"We don't follow through things that we think don't make sense. The importance for us is to have an open mind, to listen to the questions and then go and find the answer through IBM's innovation communities and repositories. I never approach the discussion with the answer beforehand," he said.

"While a lot of companies think of innovation as gadgets, working with IBM often makes them realise that it is the way they find their ideas. They come back and say: 'Can you help us with our culture.'"

In related news, IBM has announced new software and services designed to help businesses invent more innovative and intelligent products.

IBM said that the additions to its Rational Software range are particularly aimed at helping people "work and live smarter", and to give organisations a blueprint to bring complex designs to market.

"Whether we are at work, home or play, people of all ages have come to depend on products with features relying on increasing amounts of software-based intelligence," said Daniel Sabbah, general manager of IBM Rational Software.

One of the new products, called Team Webtop, will help increase communication and productivity in product design teams by presenting information from multiple software delivery tools across the workflow in a single web-based view, according to IBM.