Master the forces of change, be innovative!
Of course, a strategic innovation such as the ATM happens only once in several years and is usually pioneered by big banks with deep pockets since it has a longer payback, carries greater risk and needs more resources. But the 'little' incremental innovation which is variously a competitive defence mechanism, growth lever and survival tool, is a necessary component of every bank's business strategy. Leveraged properly, it can help the bank respond to current forces of change and turn their challenges into opportunities. For instance, technology innovation imparts flexibility so that the bank may comply with the regulatory changes of different jurisdictions, launch products and services ahead of competitors, and understand its customers better; process innovation raises efficiency and improves experience and; channel innovation extends its footprint to new frontiers including the world of social media.
Incremental innovation works in a continuous cycle, feeding off change as well as new ideas. With social media connecting banking organisations directly with millions of customers, they can easily tap into a goldmine of ideas to improve existing products and co-create new ones. And when an opportunity for strategic innovation arises, the leaders must grab it with both hands to wrest first mover advantage. On the other hand, smaller banks have the agility, and sometimes the spare resources to adopt new strategic innovations soon after they've been introduced in the market. That being said, strategic innovation is not the exclusive preserve of the biggies and can originate anywhere.
Comments
The companies as big as Infosys, Tcs, Wipro who are doing business in billions of dollars and earning thousands of crores of rupees as profits every year, should devote more time, energy, resources and money on R&D in futuristic projects which is non-existent today, they should spend hundreds of crores every year on Research & Development to find out something new which can change and transform these companies like a Microsoft or a nokia or something of that sort than just doing the ordinary jobs which they are doing for the past 15-20 years every kind of business and company has a lifecycle and the companies should be dynamic enough to transform themselves before they start rotting gradually, this is the right time for these companies to spend heavily in the future and transform themselves into something new, bigger and better.
Posted by: Sanjay | August 17, 2010 5:39 AM
The IT companies will become like BPO companies in the next 3-5 years is an understatement because outsourcing due to factors like cheap labour, cost competitiveness and various other factors revolving in favour of the outsourcing is slowly disappearing, there are various new competing countries, the cost of doing business in India is rising at an alarming pace due to rising land and building costs high rents as a result, cost of acquiring and retaining the work force is also slowly but surely becoming uneconomical, bloated work force most of the tier 1 companies have a workforce of more than 1 lakh staff, even though the so called new economy business and its demi gods once frowned upon the old economy brick and mortar business as a high cost, inefficient with highly bloated work force but look today these so called icons of the new economy have also fallen victims to the same diseases with no remedy in sight. The IT companies are at their life time peaks as far as performance and business are concerned and later after a few years of plateauing the business in terms of sales, profits and margins will go only downhill and an ever bloating workforce without any extra advantages to company will wreck havoc and in the next 5-7 years these so called icons of India will be in serious trouble.
Posted by: Sanjay | August 17, 2010 5:43 AM