The first week of the quarterly results season has unfolded on expected lines. The old faithful HDFC surprised the naysayers with excellent numbers, the new whipping boy of the analysts, Infosys threw both the markets and the IT industry watchers into a tailspin with dismal numbers and forecast and the rest of the results are not expected to bring too much cheer. With the government continuing to disappoint in terms of actions to galvanise the economy and the investment cycle yet to show any signs of revival, there is no doubt that we are in for at least two quarters of uncertainty and weak numbers from most sectors.
One focus area that can get us off the slippery slope to a prolonged slowdown is the golden word?innovation. Innovation has been talked about so many times in the last few years that it has almost lost its lustre but it still remains an opportunity for farsighted companies to differentiate themselves from competition. In this context, the CII?s National Committee on Innovation which met in New Delhi earlier this month has come up with a number of laudable initiatives that can be embraced at the firm, sector and overall economy level that can get us off the slippery slope to a prolonged economic slowdown.
At the heart of the new initiatives lies the Industrial Innovation Framework aimed at helping firms to self-assess themselves on innovation preparedness. Developed on the lines of the CII-EXIM model for Organisation Excellence, the Innovation Framework addresses key innovation drivers?leadership and strategic focus, culture and creative talent, R&D effectiveness, collaborations and networking, management systems, customers and competitiveness and through the process of commercialisation and execution also evaluates the innovation results in terms of market, customer and financial impact.
This self assessment will provide inputs to the factors that need focus within the firm and when compared across a sector will enable benchmarking against industry average and best in class performers, very similar to the McKinsey Process 360 framework for processes within the firm. The end objective?to develop a road map for moving up the innovation value chain and achieving business transformation through a structured innovation process, can be just what is needed for a firm to garner better market and opportunity share in a demand constrained environment.
For many of us in the IT industry, the value of innovation as a driver of change and competitive advantage is not new. The industry has looked at product and services innovation since the turn of the century and has also expanded the innovation search to input process innovation including talent spotting acquisition and ?on boarding? into the firm and innovation in customer facing processes which has led to significant customer ?stickiness? in difficult periods. As a case in point, Zensar has consistently climbed up the industry pecking order by a strong focus on business model innovation. A recent Harvard Business School case study points out the company?s focus on ambidextrous innovation, where incremental innovation in services, markets and new opportunity areas supplemented by doses of breakthrough innovation like the multi-shore global delivery platform enabling customer and partner participation in traditional software development and migration processes. As we enter a period of low demand and intense competition from insourcing as well as alternative cheaper destinations, it will be the innovative companies, irrespective of size or previous reputation that will emerge as winners in the new wave of outsourcing.
The innovation framework is just one of many interventions CII has taken up to shake industry out of its gloom. CII is working with the National Innovation Council to create sector innovation councils and draw up sectoral roadmaps for vertical domains as well as trans-sector business process innovation that can enable efficient delivery of products and services to the ?bottom of the pyramid? and enable better inclusion. The India Innovation Initiative hopes to create working prototypes and help them scale into full fledged companies. There are many local initiatives also in place, including one recently launched by the NES Innovation Council in Western India where a four state hunt has been initiated for innovative engineering projects in mobile applications with the objective of enabling entrepreneurial creativity to be nurtured into successful firms that can transform mobile access?to education, financial services, healthcare and government information and services.
The innovation mantra has been chanted before but in times like these, there has to be a clear call to action owned and driven by the leadership of organisations. Innovation as a fad to be reported in a corner of the balance sheet is not longer adequate. Companies must embrace innovation as a new way of reaching out to external stakeholders as well as energising internal constituencies and value chain partners and industry sectors have to commit themselves to seeing new revenue streams being built that could potentially be larger than the current core. A case in point is in Indian IT where the product, cloud, mobility and e-commerce opportunity can grow at a rate which is many orders of magnitude faster than traditional IT and BPO services. The opportunity beckons but it?s not for the faint hearted!
The writer is vice-chairman & CEO of Zensar Technologies and Chairman of the National Knowledge Committee of the CII