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October 31, 2012

Making Sense of Sustainability

Posted by Ankush Patel (View Profile | View All Posts) at 6:44 AM

Any discussion around business aspiration usually starts out as a simple, even monosyllabic exercise - "growth", "profit", "share". With a little bit of probing, there comes the realization that aspirations have grown along with the organization, taking on as many dimensions as the organization itself. That's why, a corporation can no longer grow beyond a certain size without aspiring to social responsibility. Which is one big reason companies begin to think 'sustainable'. But the other reason is even simpler. It's profits. 
More and more companies are embracing sustainability, and doing so profitably.  And this is being pursued at levels as seminal as the competitive strategies of some of the world's largest enterprises. Business leaders are beginning to take on a number of the world's most important social, environmental, and economic issues, and starting to tackle it energetically even as they boost their top line.  I think, our times present us with a great opportunity to focus on productivity gains. As it does for our clients. 

October 29, 2012

The Magic in the Banking Process is Dying. So the Bank Can Resurrect

Posted by Rajashekara V. Maiya (View Profile | View All Posts) at 7:29 AM

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The Karmic cycle of birth and death is at the heart of Hindu philosophy. And it seems to have spilled over to banking as well! The (pure) banking product has been pronounced dead by many a banker, and present day offerings are not the sole preserve of traditional banking establishments. It's the same story with services. Automation, virtualization, multi-channelization and the social Internet have made banking services highly self (service) driven.  The last to fall is the banking process. 

For decades, the process was the holy grail in banking, the source of superior service, the mantra of efficiency, and the competitive edge in a business in which it was hard to tell one product apart from another. Hell, banks even took pride in their processes! During those years, banking was synonymous with processes, and banking transformation with process reengineering. The promise of process improvement and flexibility was the biggest draw in core banking implementation; vendors of next generation IT solutions brought best practice processes, and then ironically customized them to individual banks' needs. Transformation programs had to address the dilemma of  'transform to run the bank efficiently' or 'transform to change the bank effectively'. This meant the bank had to choose between retaining or retiring its legacy systems - processes included. As banks added layers and changes to their business, they did the same with their processes. Inevitably, the process, which was supposed to simplify banking, turned into a source of complexity instead. Over time, old processes created more and more legacy and subsequently, an onerous burden. Thankfully, this is set to change.

The arrival of the next generation business platform has also ushered in next generation thinking, which dictates that the banking process is no secret sauce, to be concocted in-house and guarded at all cost.  Rather, the platform makes best-in-class processes available by default, to be accessed over the Cloud when needed, in conjunction with a set of managed services, which add to the ease of use. This means that banks no longer need to spend time, effort and money to devise and update proprietary processes; these're always available on tap. 

A point to note is that the business platform doesn't restrict itself to drudge processes; it also offers a suite of prepackaged "innovation processes" to enable banks innovate faster, more easily, more economically, and more often. This means, even as it kills the traditional proprietary banking process, the business platform is giving birth to a more powerful source of business value creation. And, so shall innovation be renewed. 

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October 26, 2012

If I'd Listened to what my Customers wanted, I'd have given them a Faster Horse

Posted by Sandeep Dadlani (View Profile | View All Posts) at 6:50 AM

The American industrialist Henry Ford once said this. Bet he'd heard the adage "the customer is always right".  Yet, he trusted his business instincts and visioning rather just the somewhat limited wish-list of his customers. I'm not, for a moment, suggesting that it's a good idea to blind oneself to customers. But, it's important to see that striving to give customers what they want does not mean delivering it in the exact manner they may have envisioned it - because envisioning that tomorrow is the provider's job. Our job. And, so it has always been.

In the early 20th century, tooth powder was the accepted and most popular form of dental care. A person would sprinkle the powder on a toothbrush and then wet it with water to form a paste. Consumer goods companies asked themselves: What if we cut out one of those steps for the customer? Instead of selling powder in tins, we could sell toothpaste in tubes! This decision perhaps seems quaint and simple today, yet it was a seismic shift in the mid-20th century. 

Today, these tectonic moves are often created through technology-led transformation. From merely supporting business competitiveness technology is steadily becoming the catalyst of change. There is a growing acceptance of its influence over business direction and its potential to seed business models of the future. I can see transformation partners playing a more proactive role, than ever before, in shaping business; as  equal participants in generating ideas for how businesses can walk that 'road less taken'. In the course of the last 12 months, I have participated in numerous innovation workshops we've conducted with the CIOs and CTOs of global organizations spanning various industries, to co-create a vision of what's at the end of that elusive 'road less taken'. We continue to engage with them even after the workshops are over, and use a proprietary innovation framework, peppered with examples of cross-industry success, to help them identify and implement the most important technology initiatives that will take them closer to realizing their goals for game-changing, radical progress.  

Because, when you really look at it, there's so much that actually lies between an idea and its potential to make the world a better place. And, I think, it's a great place to be - working through all of that...unleashing the power of these ideas. By releasing innovation.

October 24, 2012

Sky in the Eye

Posted by Simon Towers (View Profile | View All Posts) at 12:56 PM

" I am the eye in the sky - Looking at you - I can read your mind." From Eye in the Sky, by The Alan Parsons Project.

If there's a silver lining to the invasion of privacy, it is that it has inspired iconic works. But I'll bet that neither George Orwell - author of the dark classic "Nineteen Eighty Four" about state surveillance - nor Alan Parsons imagined that the invasion could go so far, or be so good. Or that a day would come when people would willingly allow an object to tell them who they are and what to do.

For make no mistake, that's where we're headed with pervasive computing. That's a rather intimidating term for what's really a gentle philosophy - which is, that intelligence can make even the humblest device a star. So, an intelligent wristband can track your activity level and wake you when you've had the right amount of sleep; a pill with a digestible sensor  can remind you to take your medicines; a billboard can discern who's walking past it (without actually identifying the person) and flash the right advertisement... the list goes on. And get a load of this! The biggest names in computing are now in a race to perfect intelligent eyewear, which can display data at a voice command. There's even a contact lens version in the making, literally bringing the sky in the eye.

George, Alan, now did you see that coming?

October 22, 2012

Baby Steps or A Moon Launch - It's Your Decision

Posted by Raj Joshi (View Profile | View All Posts) at 6:49 AM

When the U.S. found itself almost hopelessly behind the U.S.S.R. in the space race in the late 1950s, it made the decision to have man walk on the moon as its goal by 1970.  NASA was created and the space program was totally reinvented.  The U.S. reached the moon's surface earlier than President Kennedy pledged, mainly because it knew that baby steps - small advances - would fall short.

Too many organizations think small when it comes to realizing value from their operations. They focus on a philosophy of continuous improvement. But that approach usually leads only to minor incremental change.
Instead, they need to invest in a true transformation of their business processes. It is, however, easier said than done. Big-change initiatives that are designed to dramatically enhance the efficiency and effectiveness of business processes typically tend to be complex, risky and expensive.

Achieving a specific improvement in business process metrics will drive measurable business value - and this is the premise of the Value Realization Method (VRM).VRM is a framework that provides a structured approach to delivering measurable business value. It creates more predictable outcomes. It enables organizations to align operations with strategy, thereby making processes more effective. And it gives company leadership the confidence and firepower to make courageous decisions that will drive dramatic change for the better.

Realizing business value through measurable improvement in business process metrics is both an art and a science. The art of the game comes into play when leadership must manage diverse, intangible interacting factors to achieve desired process change - such as the talent of the team, level of motivation, desire to innovate, knowledge of the business, acceptance of change and evolving customer expectations. The scientific element is invoked through logic and structure that enables process redesign and the use of technology to drive process efficiency.

Consider the case of a multi-billion dollar company that had seen a gradual erosion of its position in the market. In a highly competitive industry with razor thin margins, the organization had consistently lagged the competition in key financial measures such as market cap-to-revenue and price-to-earnings ratios. The company's competitors were simply more efficient, and were thus rewarded by Wall Street with higher valuations. As the stock price declined, the board became restless. If the market cap continued to slide, it would not be long before the company became a takeover target. At the urging of the board, top management instituted several change initiatives to curtail costs and improve performance.  Small gains were made, but the competitors actually continued to enjoy healthier valuations. It was clear that incremental improvement was not cutting it.
This is not an uncommon situation - especially for mature companies that have been in business for many years. They tend to maintain the status quo. But today, that's a sure-fire way to lapse into mediocrity. And Wall Street punishes mediocrity.
So the company decided to launch a major business transformation initiative. Top management developed and committed to a compelling business case. But that was the easy part. Executing a complex business transformation initiative that actually delivers on its expectations is hard - some would liken it to a death march.  Clearly, the challenges of such an initiative should not be underestimated.  A huge change is always painful. 
Realizing maximum business value can only be attained when the organization's business processes (measured through process objectives and metrics) are in complete alignment with business strategy and operational and financial goals. If every activity within a business process is structured to support the broader business strategy, then all of the organization's assets are aligned in a common direction and are therefore more effective.Most global Fortune 500 companies today can stand to benefit by taking an analytical look at how their processes and strategy are aligned.

Moving the needle on key metrics of a business process is a clear, unambiguous measure of improved process efficiency. For example, if an organization took 15 days to go from quote-to-shipment to 5 days for processing, then this is a clear indication of improved process efficiency and therefore business value. The trick, of course, is to figure out a way to deliver this material improvement. And therein lies the challenge.

Technology, primarily applications software, tends to be the big-dog in the transformation game and the interplay between business processes and enabling technology will consume the bulk of the transformation bandwidth. But the importance of the other enablers should not be underestimated.

Launching a transformation initiative is a big bet on the future. 

One thing is for sure - doing nothing is no longer an option. Companies must constantly monitor their metrics and their competitor's performance, and be ready to change often to stay relevant in the market. And while transformation programs are anything but easy, done right - with a little art, some science, and a whole lot of inspiration and perspiration - business value can indeed be realized.

President Kennedy's audacious goal spurred rapid innovation in the space industry. And there's no reason why the business world cannot be inspired to take that kind of risk.  Their tomorrow depends on it.

Read the publication here

October 17, 2012

What's New on Cable?

Posted by Mitrankur Majumdar (View Profile | View All Posts) at 5:50 AM

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With U.S. cable operators offering telephone and broadband services, telecom companies entering the cable's television stronghold, and Internet upstarts joining the fray, everyone is now in the same race. Amidst cutthroat competition and the blurring of lines between telephone, Internet and cable providers, cable companies are stepping up their innovation efforts to achieve differentiation and growth. This is ushering in an exciting new phase, where the focus is on delivering better user experience and experimenting with different business models.  

Currently, most cable companies are full service operators, with a phone and Internet offering on top of traditional cable programming. They're active in the home as well as the enterprise segment, from enabling simple business facilities for SMBs, such as email and Internet connectivity to offering backhaul and infrastructure for large enterprise customers.  However, the obvious gap in their suite of services is wireless or mobile communication. This is leading former rivals from the cable and telecom space to come together in "quid pro quo" alliances, whereby they leverage each other's complementary capabilities in addition to focused investments on Wi-Fi across their footprint.

Mobility is also a top priority for cable operators, who want to ensure that subscribers have access to their services anytime and anywhere. Infosys is helping cable companies reach that goal with innovations which transform smartphones into a plethora of devices including a remote control for landlines, TVs, and home appliances, or a movie player, or DVR controller or unified communication hub. 

Content is the next battleground because cable subscribers want to consume hundreds of TV channels, plus unlimited content from the Internet.  Consumers can get content from their cable company or from online providers who deliver content "over the top" (OTT) directly to consumers in their living rooms, bypassing the incumbent cable provider.  This is the battleground where OTT players are going head-on with the cable companies.  Original content is king and rightly so that this was the weapon that cable companies were yielding against the on take of OTT content players like Netflix, Hulu and Google. 

Realizing this, OTT players have started investing in original programming - like Netflix's Lilyhammer series, and YouTube's promise to deliver 100+ original channels of exclusive programming....  It will be interesting to see how these OTT players succeed in this content game and compete with the cable companies. And if they do, the content offerings of cable providers will look similar, which means that user experience will be the only lasting differentiation - this is where anytime, anywhere access to content via Internet to a range of connected devices is gaining significance in the cable world. 

Cutting edge experiential technologies will catapult the current user experience to a new phase, one that we call "connected life".  Connected life, as the name suggests, forges deeper ties between television content and the audience by enabling viewers to engage with it long after the show is over, through a mobile device.  Love the beach location in a movie? Find out where it is and book a vacation online.  In a connected life, viewers will view content on the first screen (TV) and continue to interact with it from the second one (mobile or tablet). As smartphones and tablets are increasingly dominating the consumer engagement in the living room, the second screen strategy is a key for cable companies to increase user engagement. 

Once a cable provider makes the transition from the home to the mobile, its integration into its customer's life is complete.  Where cable can go from there is only limited by imagination. I can easily imagine a scenario enabled by cable, mobility and intelligent technology, in which cable-connected devices monitor the health condition of the old or infirm and send back a live feed to their healthcare providers. Or evolve into a home security system. Or even water  gardens by masterminding the sprinkler system!

October 15, 2012

No Aspiration Beyond Respect

Posted by Srikantan Moorthy (View Profile | View All Posts) at 9:18 AM

Every once in a while, a young engineer fresh on the Infosys campus, pops this question -  "In the hierarchy of corporate aspiration, what comes at the top?" My answer is always the same - " In my book, it's respect." Because quest for respect is the enterprise's conscience keeper....the compass that ensures that all of the organization's efforts are always aligned in the right direction. And, when an organization is respected, it means that others realize the value of its existence; and they want it around. In many ways, this is the Infosys way of work and life

There are many ways to earn respect of course. A business enterprise can create a niche for itself through exceptional performance. Or by continuously breaking new ground as an innovator. And when these efforts are aligned to drive progress at large and become more relevant to society, respect is a natural outcome. But, in order to retain that respect, the enterprise will have to live its ideals through and through....inside out.. Which means lead by example inside out. Show respect...not just to clients and partners...but to each and every employee. And, if excellence and innovation are the business-side ticket to respect, in the case of people, I believe, it's training.

Train young professionals to acquire the skills they need to deliver their personal best, teach them to take pride in achieving that excellence, and watch them earn the respect of their peers. Train your people in human values, and see how they earn the respect of the organization. In effect, train your organization to work towards large goals - those that transcend self-interest, and rightfully claim the respect of society.

October 12, 2012

Respect is its own Reward

Posted by Ravi Kumar S. (View Profile | View All Posts) at 6:02 AM


Team Infosys with the Oracle Excellence Award for Specialized Partner of the Year - North America

Earlier last week, Infosys won the P&G GBS External Business Partner Excellence Award for 2012. An award recognizing just 6 GBS partners for their excellence during 2012. And this is the second consecutive year that Infosys has won this award - a very infrequent occurrence in the P&G GBS World. This same week, Oracle conferred a triple honor on Infosys by naming us Oracle Specialized Partner of the Year in Financial Management and Human Capital Management and jointly recognizing Infosys and Ricoh Europe, an Infosys Business Partner, with an Oracle Excellence Award: Eco-Enterprise Innovation.

This set me thinking about how enterprises vie for glory. And an interesting analogy comes to my mind. It's about how China turned a significant contender for those coveted Olympic medals this year. From counting on just individual brilliance in games like badminton and table tennis, a few years ago, they began focusing on non-traditional sport like rowing and shooting. They, then, brought to bear strict discipline, sophisticated training and world-class coaches to tilt the scales in their favour.  It was not just 38 golds, 27 silvers and 22 bronze medals, that China carted away this year. It was also the world's respect.  In some ways, the business of winning and then sustaining respect, for enterprises, is not unlike the 'China-at-the-Olympics' affair. 

But my thoughts specifically around Infosys are best described in the words of one of our long-standing clients who, rather articulately, once explained why he believes Infosys is different from other consulting and technology providers. He referred to it as our "special sauce" brewed from: 

Hunger - our ferocious desire to get the job done; Failure is simply not an option
Humility - the most humble company he's worked with        
Honor - we do what we promise; The meaning of a handshake may have changed over time, but not for Infosys
Heart - going above and beyond what is expected
Humanity - caring about our fellow beings 

Yes, I take pride and delight in these triumphs; who wouldn't?  But what makes me happiest, is that these awards symbolize the respect we've earned with our partners in business. And. it is this quest for respect, I believe, that's guided our actions to get us to where we stand today; this is at the heart of who we are and what we do - A thriving global enterprise that puts real client value above quick fix-its; leverages technological prowess for the greater good; and exemplifies values through actions. That's why, it gives me a high to strive to sustain this respect of our stakeholders every day I come to office.

Now, that in itself, is a reward I so treasure.

October 10, 2012

Is your Apps Ecosystem an Elephantine Challenge?

Posted by Suryaprakash K. (View Profile | View All Posts) at 4:52 AM

In the wild, elephants play a critical role - come floods or drought.  When there is excessive rainfall,  elephant-paths create drainage trenches for the gushing waters. During dry summers, these same elephants dig up much-needed waterholes in dry riverbeds. Those leading the technology organization, for global enterprises, often subscribe to this "elephant philosophy"; Even as they maintain a vast and varied portfolio of applications, running seamlessly, they look to create 'trenches' to divert technology support exactly into those areas that business needs it most.  On the other hand, when the application environment is fragmented - not unlike a drought situation - they seek to dig-up 'common reservoirs of resources'  to leverage savings.

CIOs continue to strive to deliver on a dual agenda - improved effectiveness and greater savings, even as they deal with the increased clamor from business for technology to collaborate across several new fronts.  Some CIOs are unbundling the application portfolio, from centralized support models, to create line of business-specific alignment and work closely with business, whilst others seek to move to a shared services model to streamline operations and extract untapped savings.

The additional complexity comes from the business side as they demand to be empowered to tap into new opportunities that only technology can enable. For example, think of an enterprise's expansion into emerging markets. They'd require technology solutions to fill those large institutional voids. Or consider a specialty retailer trying to engage a 20 something audience. They'd need it all - the complete So-Lo-Mo package (Social, Local and Mobility technologies).

And, this is no simple challenge. Because:
• Legacy mainframe applications continue to drive business rules, and yet must connect out of the enterprise to leverage platforms-as-a-service
• The same business rules must be extracted if the enterprise chooses to standardize any of its functions like HR or finance
• In that rush for cost savings, service integration has probably taken a hit. Same cost, same operational model and many partners have led to more issues than resolution. ( I have seen instances where 5 tickets are raised for the same issue as different lines of business are supported by different partners, different systems!)

Apps in production still run the business. They continue to be supported and continue to deliver value. They are here to stay for some more time. And you need a framework to manage it all effectively. Here's a 4-pronged strategy that's working for several of our clients:
• Execute better - Forget cost for a minute. Focus on service integration, focus on improvement of methods to get better first-time call resolutions. Improve the SLA, improve the mean time between failures and most importantly improve responsiveness to business.
• De-risk the transition between vendor partners - Look for models where code quality and reverse engineering are leveraged by your vendor partner. Look for options where key personnel are rebadged, and contracts are simple to execute or withdraw.
• Reduce cost to serve - While this has been used as ammunition for long, don't just look for upfront savings - look for continued savings that are sustained by engineering.  Ask yourself these very important questions. Are the applications more productive? (For example, generate fewer tickets, better code quality and such like) Are the redundant apps retired? Are common services grouped into Centers of Excellence or shared desks?  Remember, the applications stay with you even after the vendor is gone. If these apps run effectively in the last year of the contract, your next rebid will be at least 20% cheaper.
Serve your business better - Many ideas abound, and today IT is challenged in newer ways by business. Look for options, like hubs in Latin America,  to support your local business. Look for deep domain and vertical expertise in your vendor partner to help drive ideas such as reduced markdown or improved truck load optimization.  Look for technology expertise that can help you mobile-enable your enterprise. Look for partners who can help connect your applications to the Cloud and other cost-saving virtualization forms.

Really, when it comes to managing the apps environment, there are so many things along several dimensions to consider. And, about that "elephant philosophy" all I can say is - it takes multifaceted strategies and action to get the apps jungle to truly deliver.

October 8, 2012

Finacle Aspires to Leadership of a Higher Kind

Posted by Rajashekara V. Maiya (View Profile | View All Posts) at 5:41 AM

This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available here. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

October has begun on a high. Gartner, Inc. has positioned Infosys as a Leader in the recently released 'Magic Quadrant for International Retail Core Banking 2012*' report for its Finacle™ core banking solution. The Leaders quadrant is occupied by vendors that demonstrate strong development methodologies, and all these vendors have a measurable strategy for disaggregating core banking software functionality into component-based constructs. Many vendors possess methodologies for quality assurance or are executing on a strategic road map to attain certification. Most vendors maintain a strong banking market understanding through methodical processes, and have extensive marketing delivery and sales channels. Although there are many well-balanced vendors/products in this quadrant, some are in transition and possess evolving products, process maturity or both. The report can be accessed here. While we are delighted and honored, we do realize that leadership vests us with great responsibility towards our customers, partners, other stakeholders. And also towards ourselves.

Leadership demands that we continue to uphold the highest ethical standards; that we act in the interest of sustainability; that we are recognized as a role model for aspiring firms, a worthy peer, and an organization that people are proud to work for. For that to happen, we need to imbue our products, platforms and services with the leadership mindset. 

The leadership mindset drives a product to rise to not just meet a client's immediate need but to steer an industry towards radical progress; it questions the status quo to inspire new thinking; it drives the creation of new business processes, new business capabilities, even new business models. Now, the product's innovation potential really begins to kick in when each of these capabilities work together. Think about these. A whole new business model like mobile wallets . Or, banks around the world penetrating unbanked and conventionally "unbankable" markets with a cost effective, yet profitable solution.  And with a little help from our Cloud capabilities, whole new capabilities like the consumer genome - so banks can identify each one of their customers individually - as unique persons to be engaged and delighted. 

Touching the lives of those around in a positive, enriching manner. That is true leadership. The kind we aspire to.

*Gartner, Inc., "Magic Quadrant for International Retail Core Banking" Don Free, September 26, 2012.

About the Magic Quadrant
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 

October 4, 2012

Musings from Oracle Open World

Posted by Sandeep Dadlani (View Profile | View All Posts) at 9:54 AM


    S.D Shibulal, CEO, Infosys delivering the keynote address                             Infosys at Oracle Open World

Serendipity. I have always found this word and its connotation of possibility rather intriguing. The implicit promise of a happy accident waiting to happen is so exciting. Shibu's presentation, yesterday, at Oracle Open World made me think of this word again. Citing some of the defining moments in modern history - such as the discovery of penicillin, the invention of the airplane, and the spinning of the World Wide Web - he observed that these big bang discoveries were the result of relatively small advances, acclaimed as seminal ideas only in hindsight, after they had changed the world.Historically, individuals and then research labs have been the hotbed of groundbreaking thought. But in this day and age, such events are continuously simmering within enterprises in the form of conversations, insights and ideas - sometimes as yet unrecognized - yet waiting to break free and bring about radical progress.

Indeed, corporations are driving radical progress in three ways - by innovating with products and processes; designing new and better customer experiences; and reinventing their business models. All, without losing sight of their implicit contract with society, a contract which binds them to act in the long term interest of the community, of the environment, and of sustainability. Today, more than ever, when I look at Infosys, I can see that some of our small steps are, in reality, determined ideas that are paving new path. I can clearly envisage some of these creating truly enriching experiences. And radical progress -  the kind which not only benefits the organization but also the lives of people around us. In fact, several of our clients, at the event, spoke about some of our most innovative work. One of them - Ricoh - actually told the story of how, helped by Infosys, they reduced their carbon footprint by 85%! Audi created a snazzy new digital consumer experience in London and Underwriters Laboratories has completely transformed themselves to help manage product safety for all of us.

Being at that presentation yesterday. Serendipity.

October 3, 2012

Knowing what to Innovate

Posted by Simon Towers (View Profile | View All Posts) at 10:25 AM

Forbes ranked Infosys 19 among the top 100 most innovative companies. And, I think this is just the moment to talk about how people and enterprises can learn all those skills to improve their own "innovator's DNA".

What stands out is that enterprises innovate differently at different stages of their life cycle. Early stage companies typically bet on a winning product idea to gain both entry and visibility in the market. Accordingly, their focus is on innovating product design and development, rather than on improving operations, marketing or processes. This is not to say that early stage companies don't care to innovate on "peripheral activities". There are some - like Simple for example, which puts intuitively designed web interface on top of the back-end of traditional banks to create a simple user experience - the value proposition is essentially a better alternative to an existing way of doing something. But more startups are upstarts when it comes to innovation, seeking to upset, to change status quo, and to up the ante. That's why a two year old company like Square has the audacity to try to radically disrupt a payment ecosystem dominated by giants such as Visa and MasterCard, with a smartphone plug in card reader hardware that allows anyone to accept credit-card payments.
On the other hand, established companies, which already have a blockbuster product accepted by the market, look to differentiate their offering from lookalikes through innovative service delivery and consumer engagement. Consider the case of leading logistics company, UPS, which recently introduced a unique service called MyChoice to resolve a pet peeve - the missed delivery. Customers signing up for MyChoice are notified about an impending delivery a day in advance, and for an additional fee, can reschedule or reroute it as per their convenience. 
What's also apparent is that the innovation agendas of startups and established companies are driven by very different things.  Think back to the number of startups inspired by a bad experience - what their founders did was to make a statement against what they thought was an unacceptable status quo. That they altered the industry dynamic in doing so was a bonus. The Occupy Movement is one example of this, whether you believe in its ideals or not. That it's not a commercial enterprise doesn't matter; it still embodies all the attributes of a classic disruptive innovator - transparent, socially and technologically savvy, agile, and an absolute game changer. In contrast, large or steady state organizations - which are usually the source of the status quo - are driven to innovate by the need to accelerate growth and fend off competitive threat. 
Then there's the question of risk appetite. Startup companies, with nothing to lose, are more gung ho about risky maneuvers; but there's no way that an established firm will find it easy to throw caution to the winds. This scenario has played out time and again (with very few exceptions) in high-stakes innovation, such as legacy transformation, where the smaller institutions occasionally take the high risk-high reward big bang approach, but the leaders invariably transform in increments. 
No matter what the approach to innovation, the role of innovation as a strategic priority is growing increasingly stronger - for both startup and veteran firms.

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