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June 29, 2012

B2B must smell the digital transformation coffee

Posted by Komal Jain (View Profile | View All Posts) at 6:37 AM

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Remember the comparison between radio, which took 38 years to reach 50 million users, the Internet that did it in 4, and Facebook, which took less than half that time? Impressive as they are, there's a lot more to digital evolution than just numbers. Actually, 'transformation' is a better word to describe the metamorphosis of the Internet from a channel of information to a medium of social hyper-connectivity. 

Less visible, but equally important, is the way that companies have adapted their behavior to leverage every new possibility that digital transformation has to offer.  This has largely been seen as a B2C blockbuster, starring retail, telecom and Internet firms, which have pulled ahead of other industries in online engagement. B2B firms have stayed away or sat on the fence, with the view that online, and particularly social media has nothing to offer to them. 

They couldn't be more wrong. Let me give you the example of a leader in the semiconductor business - which is as B2B as it gets - and its strategic usage of online media. The company had a long tail of customers mainly in the manufacturing and innovation hubs of South East Asia.  While the company did not find it viable to dedicate a sales and service force to these customers, who brought in just a fraction of revenues, it knew that they were strategically important - one, because some of these small firms were working on cutting edge innovation and two, because they were located in some of the world's most exciting markets. 

The company hit upon a solution in the form of an online channel where customers could share their experiences and air their problems, which would invariably be resolved by other members of the network who had faced similar issues in the past. It was a win-win for all that took little time and money to achieve. 

Are other B2B businesses taking notice?

June 27, 2012

Ok everyone, become a couch potato!

Posted by Mitrankur Majumdar (View Profile | View All Posts) at 7:02 AM

Sometimes,  innovation can also mean more people sitting in front of the TV and for longer.  We kid around with jokes about "mean butt time" and creating the next generation of couch potatoes.  However, if you're a cable operator, this is what keeps you up at night.  That's why, I was excited to be at the National Cable and Telecommunications (NCTA) show held recently in Boston.  The upside is that there's so much innovation - even a few game changers - in the industry ecosystem.  But then again, I'll probably end up putting on a few more pounds enjoying the end result - a television experience tailored to my needs and preferences. This year the Show had so many ideas that caught my attention.

After a grueling, 48 hour caffeine-fueled code-pounding session in the Imagine App Challenge, a competition between college teams to take a concept from ideation to prototype, the top prize went to the coders from Stanford. They created a cool "in-home bandwidth management" application that allows users to control traffic for a specific application or device at home using an Internet browser.  This enables customers to take control of the quality of performance of their own applications.  Awesome!

Infosys was also invited to speak at the Imagine Park - a session about innovation and the companies, from the cable ecosystem, making it all happen.  We presented our concept of using natural interfaces like gesture, voice and facial recognition to create a personalized and intuitive TV viewing experience.  Our approach eliminates multiple remote controls and allows users to take advantage of existing devices like Android or an iPad.  It helps the cable operator too by enhancing customer experience while limiting in-home TV infrastructure cost by simply leveraging the ubiquitous set-top box.  We're seeing strong demand for these types of experiences from our clients. You can view the video of our demo at: http://fora.tv/2012/05/22/Control_Freak_Natural_User_Interfaces_Find_The_Way_Home (fast forward to the 11 min 30 sec point for the Infosys segment).

Cable Labs' own section - CableNEXT had some great ideas on  show especially from major operators like Comcast, Time Warner Cable and Cox - all of them presenting their take on "TV Everywhere".  Innovation is driving the viewing experience beyond mobile devices to all sorts of connected devices like XBOX and connected TVs. I believe this hotbed of activity will pave the way for operators to deliver next generation TV viewing experiences. (Of course, we are a part of some of these innovative initiatives that are underway in the Cable and Telco world!).  

In terms of technology-led innovation, I was fascinated by how HTML-based interfaces on the Cloud are beginning to catch on in the cable world.  This concept has the potential to fundamentally change the next generation video experience by creating a common unified experience across TVs, mobile devices and other connected devices... all delivered via the Cloud. 

Customer experience is such a loaded word and the more I see the more I feel that it really has no limits. Star Trek is not fiction anymore. Except for, perhaps, teleporting I see everything else in the real world at NCTA!!  The world of video has reached a tipping point where innovations and new technology have become the new normal.  

June 25, 2012

Strategic collaboration: Vital for future growth

Posted by Sanjeev Arya (View Profile | View All Posts) at 5:33 AM

In today's world of ever-changing dynamics and unprecedented market conditions, global businesses are challenged to sustain their competitive advantage. I believe in the constancy of businesses seeking newer ideas from within and also from their partner ecosystem.

Innovation is necessitated by the need to change and to challenge the norm, for the improvement of a process, a system, an organization or the society at large. Co-creation and innovation continue to resonate in my mind when I monitor global trends in action across industry sectors, and more so, in the telecom sector. We, at Infosys, continually work towards delivering business value for our clients with these concepts ingrained in our strategic directives. So, how does one enable value? One of the quickest ways to do so is to partner and leverage investments to create new growth opportunities on a  mutual basis.

Innovation is at the heart of Infosys' strategy - 'Building Tomorrow's Enterprise'. Over decades, our research and development arm has evolved and incubated many new concepts and ideas which are being realized by our clients in the form of platforms, products and solutions. The focus has always been on 'value realization' which drives teams to help transform the businesses of our clients, globally. Co-creating and working together with clients, technology partners, universities and other innovation ecosystems available to leverage, Infosys is able to focus on developing solutions to address complex business problems. The Intellectual Property thus developed is coming in very handy to create greater agility in how we provide value to our clients and also to their end-customers through our collaboration.

Our relationship with British Telecom (BT) is a great example of Infosys playing the role of an innovation and co-creation partner. A true testimony to this came by the way of BT and Infosys being recognized with the Business Service Innovation award by Global Telecoms Business on June 12th, 2012. The project 'Transforming Service Operations with Field Automation' demonstrated the benefits that the collaborative solution brought to BT's internal field engineers and to end-customers as well.

I am very encouraged to see the benefits of collaboration between organizations which have traditionally been bound by a client-supplier relationship. It proves that the coming together of firms as partners for converting market opportunities and delighting the end-customer goes a long way in creating greater growth opportunities for both enterprises. With the case proven clearly in this example, I can see opportunities in other sectors which tend to draw parallels from the telecom sector -be it utilities, energy, transportation or any industry relying heavily on a field work force. And there's a lot more out there to go and grab even in today's economic climate. Tougher conditions demand smarter ways of solving problems! 

Thomas Edison once stated what continues to be an undying inspiration to many. . .He said, "There is a way to do it better... Find it." 

June 21, 2012

Cloud integration and governance: Getting it all together

Posted by Arun Raghavapudi (View Profile | View All Posts) at 12:21 PM

As the Cloud business matures, its biggest opportunity might also present its greatest challenge. Today, corporate Cloud users are looking at outsourcing different components of infrastructure to different suppliers to optimize their costs. But managing multiple deployments means managing multiple vendor relationships (maybe even multiple technologies and delivery models) and the attendant complexities. Things get worse when different vendors are somehow dependent on each other, or have parallel relationships with end users. In response, clients are streamlining the management of their Cloud vendor base in two ways - first, by creating a "single story" structure to oversee all their deployments, and secondly, by putting governance to work.  The latter spells a clear shift; from loosely written agreements and fuzzy monitoring to tightly worded Service Level Agreements with each vendor, and between the vendors themselves when their services overlap or become co-dependent. This shift is creating a new supplier order, one in which a client will holds a single major vendor responsible for its entire Cloud deployment. It will be left to this vendor to enforce all the SLAs with the subordinate suppliers on an ongoing basis. The upside is greater discipline in relationships between the client, vendors and end users.

A maturing Cloud brings new possibilities like the delivery of business processes on top of infrastructure, managed as a service. While this development will result in Cloud deployments that are more responsive to business needs, it will also create complex vendor management issues. Enterprises can make their lives easier by acquiring the capability to integrate their Cloud ecosystems and gain full visibility of their Cloud environment - public, private and hybrid.  In the absence of such an all-encompassing view, optimization will remain a distant dream.

June 20, 2012

Brands and retailers on social media: A twist in the tale

Posted by Sudhir Holla (View Profile | View All Posts) at 6:59 AM


Of one thing I'm certain:  When it comes to business online, Facebook is no Amazon.  When Amazon first went live in 1995, it sold books.  Today, the site has branched out into being a purveyor for countless other mass-market products that have nothing to do with literature.  For one, Facebook has not effectively aggregated retailers.  Yes, it has more members that any other site and therefore legions of potential consumers.  But the site has proven to have far greater potential as a marketing tool and as a potential ally in analyzing buyer habits than fostering sales.  When it comes to e-commerce, so far, Facebook is simply an enabler and not an effective retail platform.

A social network can indeed be useful in building brand image in a number of ways.  Several businesses use Facebook as a means to promote their names in subtle ways, including cause-related marketing.  Chase Community Giving had more than 2.2 million likes on Facebook, for example, and American Express uses the site to trumpet its Partners in Preservation program.  State Farm insurance asks Facebook users to vote for their top charities.  The top 40 will each receive $25,000. But how effective will social networks be when it comes to actually spurring sales?

Businesses are beginning to see the potential in data gathering.  Diageo the giant liquor firm, has been using Facebook to collect information about customers, which they will undoubtedly put to good use in targeting their products in the right space. The firm discovered that Guinness beer drinkers are also interested in using the beverage in recipes, such as a marinade for flank steak.They also gleaned interesting nuggets like - a group of their customers that liked flavored vodkas and malt beverages were mostly males. Social networks already play a vital role in viral marketing because friends of friends are always sharing shopping ideas and reviews of products and services.  Consumers are not shy about expressing their likes and dislikes in cyberspace.  It's not uncommon for bestselling books on Amazon to receive over 4,000 reader reviews.  I'm not sure if the world needs that many reviews but it's clear people like to express their opinion.

In our work, I have come across enough examples that show that social media, when used effectively, does result in a 3x multiple on the marketing spend. Effective use here translates to reducing the entry barrier for customers - by allowing their social ID to be used in your ecosystem and also leveraging social connections to provide a more personalized experience. 

All of this points to what we can be termed the Consumer Genome.  Using information available about a brand, through various interactions with its consumers brands can identify the "consumer" DNA, her interests, buying behavior, her current needs, her influence; and then market to her elegantly; in a way that doesn't seem intrusive. Go too far (meaning, get too nosy), and you'll risk losing business by annoying them.  If you don't use the data effectively, you'll lose out to competitors who do. I'm wondering what the threshold will be when it comes to data mining of personal information that can be used for consumer sales and marketing.  The drop off rate can be dramatic when a company asks potential customers to fill in too many "required" fields.  They become frustrated at their keyboards and simply click away to be done with it.  Google, at one point, offered $25 to consumers to fill out forms to garner personal information about respondents.  The deal was simple:  they paid for privileged data and in turn were allowed to use it in any way - reselling to other vendors, and so on. Really, at what price would you sell your age, zip code, hobbies, preferences, likes, dislikes, and income?

This leads directly to the other issue that is emerging as data analysis and predictive analytics gets more sophisticated. In my view, in the future, brands will need to find the happy medium where they can induce consumers to opt in rather than opt out.

June 18, 2012

Simplify or have an egg on your face

Posted by Manish Srivastava (View Profile | View All Posts) at 6:06 AM

Simplification is a persistent theme in the minds of executives leading large global organizations. As organizations grow in size, they also tend to become complex. The number of products they offer increase and so does number of  customers, operating locations, suppliers, systems, employees - all increase in quantity and variety. The related cost of management of each increases. Decision making becomes slow and bureaucratic. Getting the same thing done takes more effort. People connected with the organization experience stress and low morale. Productivity is impacted negatively. Growth slows down and in a few scenarios, catastrophic failure occurs. In today's globally connected and dynamic marketplace, simplification is no longer just a means for managing costs but is paramount for survival.

To understand why simplification is important, we need to understand the how complexity builds and affects us. Let's start with a simple system, say a perfect spherical ball which is rolling with a velocity v on a planar surface. So the distance d travelled by the ball in time t can be computed by d = v * t. We call this a simple system, because most of us can compute and predict the position of the ball with very little mental effort. Complexity of the above system can be increased by replacing the ball with an egg or making the surface non-planar. This increases the number of variables based on which the distance d can be calculated. Now most of us will need at least a paper and pencil to calculate the distance d.  On further adding variables, we can increase the complexity of the system to a point where we will all need a calculator or a computer to solve the problem and also help of an expert. As the system becomes complex, we are unable to comprehend and predict its behavior.

Real world systems are far more complex than one described above. We deal real world complexity every day - while crossing the road, making financial decisions, organizing our children's toys or while making holiday plans. We are dealing with the complexity around us by simulating and computing. It allows us to predict the future state of the system and take actions that will enable us to meet our goals - what speed is the car coming and should I stop or cross the road. Let's make this a little real - say somebody throws an egg at you. Your brain needs to simulate and computes where the egg will be in the future, make a decision whether your best option is to catch it or duck then instruct your hand or body to physically move to the calculated position to increase your chances of catching the egg or ducking. If your brain is unable to comprehend the direction, speed etc. of the egg and compute fast enough such that your hands or body have enough time to move, you are likely to panic (get stressed), miss catching the egg (miss your goal of avoiding being hit) and chances that you will have egg on your face increases ( i.e. risk of catastrophe rises). While luckily, egg is not being thrown at us all the time, we are all simulating the future all the time in the real world. However, our ability to simulate the future is limited. If we are put in an environment where we are unable to simulate the future, then we feel stressed, out of control and often make errors in judgment that may lead to catastrophe. 

The same is true for large organizations. As they grow in size, complex interdependencies develop between systems and processes. Feedback loops set it which causes variables to behave unpredictably - making it difficult to compute and predict.  Small changes in one part have cascading effect on large parts of the organization. Organizations become fearful of change as they are unable to predict the outcome of the change. The very systems and processes that were put in place to leverage the economies of scale make the organization difficult to change. Diseconomies of scale set in. Getting the same thing done requires more effort. Stress increases. Productivity falls. Growth stalls. As the world is becoming increasingly interconnected - through financial networks, global supply chains, telecommunication networks and social networks - events in one part rapidly spreads worldwide. In such a networked environment, a lot of "eggs" are being thrown around. Organizations that are unable to simulate and comprehend fast enough to catch or duck, are likely to have "egg" on their faces.

June 14, 2012

@ Israel: Business and beyond

Posted by Krishnan Narayanan (View Profile | View All Posts) at 11:39 AM


I'm back from an invigorating trip to Israel. But the excitement, really, began a while ago with a vision that we have at Infosys:  To become the network of networks, where we bring together innovation networks from around the world and make it all relevant to our clients. In recent times, I've been engaging with several research and innovation networks in Australia, Finland and Netherlands. Infosys Labs, in tandem, is looking to leverage the external innovation ecosystem as part of our efforts to evaluate early stage technologies that can energize this agenda. And Israel - the highly innovative country that it is - topped our consideration list as we began our early explorations. 

Did you know? Israel ranks 1st in R&D investments investing 4.5% of its GDP in R&D. The Country has the highest per capita patents and has over 1000 active start-ups in the arena of Information Technology. To encourage MNC-startup partnerships in Israel, the Office of the Chief Scientist (yes, they have one for the country!) has established a dedicated "Global Enterprise Collaboration Program".  And Infosys signed an MoU with the Office to drive industrial research and development.  Of course, the signing of the MoU in Jerusalem was a grand affair. Israel's Chief Scientist, Avi Hasson and the Minister of Industry, Trade and Labour, Shalom Simhon graced the occasion as Subu Goparaju, SVP and Head of Infosys Labs, signed the MoU on behalf of Infosys.

I met with over 25 Israeli start-ups operating in the spaces of Cloud computing, security, analytics and sustainability over the next 3 days. What really made an indelible impression on me was the sheer passion that came through from the founders - several of them having seeded two to three successful companies. Many of the companies were small-sized ones - just 3-8 developers sometimes! The markets of US and Europe figured on their target lists, of course, but India featured prominently too. (Surprisingly, I did not hear much talk of India as a development base for these start-ups). Israel is also investing heavily into include cleantech, homeland security, life sciences and agrotech. In fact, I visited a kibbutz housing the manufacturing plant of a firm operating in the sustainability space.

Now, before you imagine it was all work and no play for me, let me set the record straight. From ethnic Jerusalem to energetic Tel Aviv, Israel is a tourist's delight. Whether its history and culture you enjoy or the languor of beaches and café-dotted streets, Israel won't disappoint. But, this ain't a travelogue so I'll say no more. 

But, you'll find me popping back, soon, to tell you how Infosys Labs is collaborating with innovative start-ups in Israel. And then the excitement will begin all over again....

June 13, 2012

The multi-channel experience: Can you shop and watch TV at the same time?

Posted by Vikram Vij (View Profile | View All Posts) at 5:37 AM

Technology has taken the old saw about walking and chewing gum at the same time to levels we never dreamed.  Multitasking has become a byword of today's on-the-go generation of shrewd kids and ambitious young adults.  If you don't have at least one eye on your smartphone, you're not considered to be au courant.  All this despite numerous studies beginning to reveal that doing two or more things at the same time doesn't necessarily make us smarter or more efficient than doing a single task until it's finished without any distraction or interruption.  Not to mention the rudeness factor if your lunch companion is constantly glancing in his or her lap.  But at this point, my argument is let's just get over it.  As long as we're not texting and driving a car, people will continue to live their lives at light speed.

The really good news is that one day there will not be any difference between watching television and shopping.  Retailers are creating new ways to interact with consumers through a multi-channel experience.  Social media is being incorporated into the retailing processes and digital media pervades the in-store experience. The whole idea of television has been transformed by programing that is now becoming more web-based.  Television is also becoming more social, immersive and participatory.  Consumers want to debate candidates, answer polling queries, vote, and make comments about their favorite episodes.  It's not just about putting in their opinion on who should be thrown off the show or voted off an island. It's not hard to imagine how the worlds of retailing and television are rapidly converging with the potential to create an entirely new user experience.

The gearbox behind the scenes will be a personal preference engine that analyzes our behavior to create our preferences and help us make decisions. Who hasn't agonized over all those juice choices on the dinner menu?  Would you welcome an interactive piece of software on your home screen that reminded you:  "Well, sir, you did have the margherita pizza just yesterday?  Why not try Mexican tonight?  Can I interest you in the taco or burrito special?"  Oh, this is not the "2001: A Space Odyssey" computer (remember the HAL 9000?) that ran amok.  It's less scary than it sounds.  We've all used preference engines in some way to choose music, movies, book, restaurants, and just about anything else.  Some are more sophisticated than others but all are based on our inputs and prior purchase behavior.

After personally rating over 300 movies on Netflix, I trust their recommendations better than anyone else's - certainly more than one of those snobby professional movie critics.  Netflix even created a custom category for my favorites.  Add some analytics, a dash of social media and the commensurate helping of machine learning and you can create a personalization engine that knows you better than yourself.  (Or at least has a better memory.) Apply that engine in a converged environment and the possibilities are endless.  With my personalization engine fine-tuned, I can view a show, admire the character's clothing and have the item ordered and delivered the next day.  If you are a retailer, this is a gold mine.  Television and web programing become direct sales channels.  This experience takes product placement to a whole new level.  It's almost too easy to buy.  

And, I guess, that's the point.  

June 11, 2012

A very real fairytale

Posted by Sandeep Dadlani (View Profile | View All Posts) at 8:39 AM

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Recently, Harrods' Managing Director, Michael Ward said that they would not be able to open a store in India. Not enough takers for expensive clothes and jewelry, apparently. Fair enough.

But to the more accessible international brands, which are emerging-market reluctant, I say, there is definitely a story. Maybe even a fairy tale ending. Like these.

Marico, an Indian manufacturer of popular coconut-based health and beauty products was struggling to source its vital ingredient from an extremely fragmented supply market. There were two choices, both difficult - buy coconuts from hundreds of thousands of individual tree climbers or deal with unscrupulous middlemen. Either way, the company had no visibility or predictability into its daily supply position. And, then the mobile revolution changed all that. The company registered the mobile phone numbers of coconut pickers and would text them the day's purchase price. The pickers responded with the quantity they were willing to supply. Job done. Middleman gone.

Hippo Baked Munchies, a popular Indian snacks brand faced a similar challenge, but at the opposite end of its supply chain. It retailed at over 400,000 stores, mainly the mom and pop variety.  Tracking inventory was an unending nightmare. It decided to seek help from its customers, asking them to tweet the location of a store that was out of stock. The brand rewarded them with attractive gift coupons for every shared lead. It put an efficient mechanism in place, which replenished within 48 hours. Customers were delighted with their goodie bags filling up . In no time, the number of Twitter trackers equaled half the company's sales and distribution strength. Sales jumped 76%. The rest, as they say, is history.

A similar tale awaits other brands. Of markets where the blue sky is the limit. Where they will encounter a few stiff challenges and many teething problems. But also a solution - in the form of innovation and creative use of technology - to overcome them all. And live happily ever after.

June 7, 2012

Going green: A little disruption can go a long way

Posted by Rohan Parikh (View Profile | View All Posts) at 7:04 AM

Infosys has been identified among the top 25 performers in caring for climate initiative. Well, visit one of our campuses and you'll see straight away that we are an environmentally conscious company.

Four years ago, at Infosys, we launched an interesting sustainability effort to come up with great ideas for green initiatives that we could then replicate and share with the rest of the world. We wanted to set global benchmarks by saving resources and money. This tied in perfectly with my passion.  

Our goals were ambitious: cut our per capita electricity consumption by half, use electricity generated from renewable resources, become water sustainable by putting back more than we took from the ground, use only rain or recycled water and, reduce waste. These goals drove all our actions. Soon, we turned our attention to the one thing that consumed the most energy - our buildings. The ironic thing about building design is that it pays little attention to energy efficiency. We created a team of building physicists and, with their input, began to challenge the status quo. We introduced performance clauses for our architects.  Every design mandate came with an energy efficiency rider; for example, every building needed to harvest as much daylight as possible. But in order to build these criteria, we had to first install energy meters that would take deep measurements of the efficiency performance of our buildings. Soon, we had a 24x7 energy consumption profile of our buildings, which opened our eyes to energy usage and waste.  We were surprised to find out just how much energy is wasted when people don't turn off their lights and computers at the end of the day.

This sparked a stream of ideas about ways to conserve energy. The first of these projects related to an occupancy sensor, which would adjust the amount of lighting in a room by sensing human body heat, turning lights off the moment it sensed none. Another of our innovations was implementing a daylight sensor, which kept track of the natural light streaming in through the windows and was able to  adjust the amount of artificial lighting inside. We got an illumination specialist to simulate the lighting schemes in our buildings and recommend the optimal distribution of lights, which also reduced electrical consumption. With the connected lighting load coming down by 50 percent and actual consumption by a massive 66 percent, we were well on our way to realizing our first goal. These initial successes inspired bolder moves, some, which we believe will disrupt the way the world manages its future power demands.

For instance, the granular data from our energy meters was telling us that the nighttime computer load was 50 percent of the daytime peak, simply because the machines hadn't been turned off. A search for a proactive solution ended at Infosys Labs - our R&D arm and innovation nerve center. They helped build a smart power strip, which we attached to the plug points. When the intelligent power strip sensed an idle computer or phone charger, that was still drawing power, it would send a text alert to the concerned employee's mobile phone. The employee could then instruct the power strip - over the mobile phone - to switch everything off.

Another idea challenged the current science of cooling. We discovered that 40 percent of our total energy consumption went into air conditioning..  We investigated a bit, and took a technology called radiant cooling out of the laboratory and put it to work. By embedding water pipes inside concrete slabs, we were able to cool the space using 30 percent less energy than conventional methods.

I believe that the reason for our success can be found in our collective commitment to sustainability. This is what led us to think outside the box and dare to work with disruptive ideas. We threw out inefficient practices, including the science of "thumb-rule engineering." The enthusiasm was infectious because our design team backed us up each time to come up with significant improvements on what were essentially good models.

I am lucky that my job allows me to enjoy this once-in-a-lifetime opportunity to build a little bit of tomorrow's planet.

Digital money: The tipping point is here

Posted by Haragopal Mangipudi (View Profile | View All Posts) at 4:38 AM

Not very long ago, I was watching the news about the USD 1B acquisition of this company called Instagram by the social media giant Facebook. What struck me, when I read about Instagram, was that this fledgling company was premised on a very simple idea. The idea of giving people the joy of modifying their digital pictures to look like they were from the 1960s or earlier and then uploading these pictures on social media. A simple idea, that is now worth USD 1B.

Often, the simplest of ideas are the most powerful. Those that see potential in these ideas early are able to leverage and capitalize on them. As the head of a business unit, that develops and sells technology for financial services, I often ask myself what is the next big idea in our space. As technology providers, for financial services, we've always had to ask ourselves what we can do to simplify the lives of our clients. With the growth of digital channels, such as the Internet and mobile, we've enabled our customers to deliver their services cost-effectively. While digital channels continue to see steady adoption, consumers around the world are still wedded to their cash and cards as instruments of transaction. In some parts of the world, consumers have mobile phones but no access to banking services. Explaining away this disparity as 'time will take care of it' is equivalent to a comfortable illusion. To me, the answer to these questions lies in the concept of digital money.

Digital money is based on the simple premise that a digital device, such as a mobile phone or an Internet-enabled computer, can complement or even replace a consumer's wallet. The consumer can access all their payment instruments, such as bank accounts or cards, digitally and eventually even do away with physical cash and cards. When I think of what this idea can do for economies, our customers and the end consumer, the possibilities are endless. At a macroeconomic level, the concept has the potential to create a parallel digital economy with virtual currency transactions exceeding paper or plastic-based ones. I think of an economy where cash or cards may still exist, but digital currency will reduce transaction costs, frauds and transaction processing time for financial instrument issuers. Financial institutions will be able to reach more customers using digital channels and deliver transaction services on these channels. Both telecom providers and retailers will have important roles to play in this ecosystem, especially in the context of mobile commerce services. In many countries, we see win-win partnerships between these parties as they unlock new revenue streams and extend delivery channels efficiently.

And what of the end consumer? Think of a world where the bulky wallet disappears. Instead, consumers will most likely avoid long queues by instantly paying bills online, tap and pay at merchant locations, buy their movie tickets on the phone, and even transfer money to friends or family on a digital device. Skeptics may tell you that digital money, as a concept, has been around for a while now. However, we are closer than ever before to the tipping point of this space. As might have been the case with Instagram, or others before it, powerful ideas initially fly in the face of tradition but are eventually adopted by the majority. I believe that digital money is a simple yet powerful idea, whose time has come for the financial services space.

June 5, 2012

Where do you stand on innovation?

Posted by Anand Prasad Arkalgud (View Profile | View All Posts) at 10:15 AM

When we talk about companies in the context of innovation, we are quick to point out how some companies are innovators - leaders in innovation, while others are laggards. Innovators or leaders are firms that believe that a core part of their business - their soul - lies in inventing the next new thing. They invest a lot of money in research and development, and are accustomed to trial and error. They understand that there is a given ratio where missteps and failure outpace success. Laggards are the sort of companies that wait till a product or service matures before they jump into the marketplace. Why? They save money because they don't invest in R&D and worry about failure. Companies often find themselves trying to decide if they should be leaders or laggards. Being the leader in innovation is an expensive proposition (ask pharmaceutical companies that rely on drug discovery), and being a laggard seems to be socially unacceptable in today's corporate world.  More often than not, we tend to believe that the best way to succeed is to try and lead! Many companies often conclude that the reason that they are failing to make inroads in certain areas is because they are not innovative enough! If that was true, we should see the laggards dropping like flies. 

Let me give you an example that made me step back and re-consider whether it is that bad to be a laggard after all.  I walked into a hardware store in Bangalore and I had some time to chat with the guy at the counter.  He told me that 95 percent of the drill bits he sells come from China.  He mentioned that the Chinese drill bits break more often than the higher quality premium branded ones.  But his clientele - the local tradespeople - do not care about quality.  They don't buy the drill bits hoping they will last for life - or even a year or two - because they get paid on every job and factor in the cost of the bits that they're not going to use again.  The local guy dealing with the customer - the contractor, if you will, tells his carpenter or handyman about every new job.  He gives the man money and tells him to go out and buy drill bits. So, his guy goes to the hardware store and buys the cheapest drill bit possible.  He only wants it to last as long as it takes to do the job - probably a week or two.  What is his worst-case scenario?  The drills break right away.  So, then he'll send his worker out to buy one more to finish the job, and remember, it's half the price.  So even if he buys one more he is nonetheless better off than if he had bought the more expensive premium drill bit. Does it matter that we consider this company a laggard?  They understand their market - even if they've never been to that hardware store in Bangalore. 

The numerous interactions I have had with global corporations, in recent times, on the topic of innovations seem to highlight the need for a third option - the fast follower. These companies do not necessarily come up with radically new ideas, but are constantly trying to get things on their radar.  They may not invent an energy drink or a new type of car, but when they see the market past the infant stage - and that there is room for another player - they're quick to follow with a new entry. Being a (successful) fast follower is not about following competitors in your industry. It is about scanning companies across industries and finding ideas worth emulating. It requires companies to develop capabilities that help them scan the broader environment more effectively, understand how consumer expectations are being shaped in other industries or geographies and use that information to differentiate them from their peers.

But then, it still bothers me that a company has to decide whether it is a leader, a fast-follower or a laggard. What seems practical is to decide an area where you want to be a leader (innovator), where you prefer to be a fast follower and where you'd rather be the laggard. If you are an FMCG company, you may decide to be a leader in product or packaging innovation, be a fast follower when it comes to digital marketing, and be a laggard in some areas where you don't see the prospect of differentiation. It is very conceivable that another FMCG company decides to lead on digital marketing but follow on product and packaging. So be it.

June 1, 2012

Virtual reality takes a major leap forward

Posted by Vikram Vij (View Profile | View All Posts) at 10:17 AM


A sea change in computing - perhaps one of the biggest ever - occurred 17 months ago when Microsoft introduced Kinect as an interface with the Xbox game console.  By introducing the concept of using gestures and spoken commands to navigate screens and direct the actions of characters, Kinect truly ushered in the world of virtual reality to the casual gamer.  It's no surprise that Kinect set a Guinness World Record for the "fastest-selling consumer electronics device" when eight million units were shipped in just two months.

As technology advances, these new devices are becoming more experiential and "intelligent."  What's next?  It's anybody's guess, but I'd venture that 3D is widely recognized as the next big thing in entertainment and is expected to become the standard.  Smart marketing and lower prices will ramp up sales and introduce new users to all the fun.  Interactive movies in your living room will just be a starting point.  

Well, our kids are happy about this (and so are the adults - the ones still young at heart), but are there practical applications for business lurking somewhere in these adventures?  I think so.  Combining new devices and user experiences are likely to have a transformative effect on industries like retailing and will have far reaching implications for consumer branding. 

Augmented reality - providing a 3D virtual layer on top of reality - is just beginning to emerge from the gaming environment into new apps for shopping and other uses.  Here's a good example.  A lot of us look at shopping for new clothes as more of a drudge than anything else.  While it's nice to look and feel good in the latest styles, trying on the clothes to get the right fit can take a lot more time than many of us care to spend.  With augmented reality, users can view themselves in alternate spaces.  Click on "dressing room with mirrors" for the new suit.  Or "playground hoops" for those spiffy basketball shorts.

It will take some time to gain traction.  A while back there were lots of big businesses tripping over each other to establish a virtual store, or at least a presence on Second Life.  (Relax. You're forgiven if you don't remember.)  I think augmented reality holds a greater potential than prior attempts at branding in a purely virtual world. 

The implications for branding from these new device interfaces and applications are enormous.  Insert your brand logo in a semi-virtual world.  Let users interact with your virtualized product and services in ways that are fun and engaging.  And, time saving for those of us who don't have time for the brick-and-mortar option (or just hate shopping).

Location based services, social networking, mobility provide even more opportunities to extend beyond an innovative interface and provide real value.  The user experience can also be enhanced through promotions and special offers.  For example, creative retailers can offer discounts for the first adopters for a given product that actually takes time for a consumer to make a decision to buy.  Make shopping a "competitive sport?"  Why not?

Who knows?  This could be the thing that drives adoption of mobile payments and the next wave of cutting edge user experiences.  We're only at the early stages of applying new and creative ways to apply these capabilities.  Let the games begin!  Oh, they already have.

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