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March 28, 2014

Swimming Upriver: Reverse Innovation

Posted by Puneet Gupta (View Profile | View All Posts) at 6:50 AM


Vijay Govindarajan on Reverse Innovation - Nordic Business Forum 2013 [Source: http://www.youtube.com/watch?v=LM85P1arcNE]

Professor Vijay Govindarajan, who along with General Electric CEO Jeffrey Immelt coined the term "Reverse Innovation" - a.k.a. blowback or trickle-up innovation - says that it has the power to transform every industry, from energy and healthcare to transportation and consumer goods. Yet, outside the quoted-to-death example of GE's wonder ECG machine, real world examples of successful reverse innovation are few and far between. So, is this a case of third world hype or a story of missed opportunity?

Perhaps a bit of both.

Like any other commodity, reverse-innovated products need to find an equilibrium between demand and supply side factors to successfully transition from developing to developed world markets. This means they need to encounter a need that local players in developed markets have not fulfilled because they are either unwilling or incapable of doing so. Also, emerging market firms must keep up a steady stream of innovations and develop an instinct for identifying good "reverse" bets - those with a greater likelihood of acceptance among industrialized world consumers.

Rarely will all these conditions converge into a sweet spot, which explains why reverse innovation is yet to gain traction. But this does not mean the end of the road, merely a question of looking for opportunities where none existed before.

Historically, consumers in developed markets demanded high quality products and paid a premium for them. On the other hand, consumers in low-income emerging markets settled for acceptable quality, at a price they could afford. But the global economic crisis has now created a market for cheaper products even in rich markets. Kiva.org, a non-profit website connecting small entrepreneurs and microfinance institutions in developing nations, took its services to the United States in 2009 where the recession had sparked a need for cheaper loans; beating skepticism, the program succeeded in attracting a large number of new users.

India's Tata Motors, makers of a US$ 2,500 automobile, are planning to introduce the Nano in Europe and the United States where they see potential for their little car. As outlandish as it may seem, the Nano - and many other emerging market manufactures - actually come with a higher "performance for price" proposition than many developed world products. A great - if tragically ironic - example is that of an artificial leg made in Thailand, which is designed to perform in much more demanding rural conditions than its much more expensive western world counterparts.

Niche demands are also creating opportunities in the developed world for reverse-innovated products, at times in unexpected ways. India's innovative entrepreneurs have designed a solar-powered battery charger to meet the needs of a country with burgeoning mobile demand, abundant sunshine, and a huge shortage of electricity. In the United States, the same device functions as a portable mobile phone charging unit for outdoor enthusiasts.

But even as the emerging world focuses on reverse innovation, there's a case for the industrialized one to look at it seriously, and not just from a consumption perspective. Multinational developed world organizations should look at tapping this opportunity for themselves by setting up research and (reverse) innovation centers in low cost destinations. As counterintuitive this might appear, their provenance could even put them at an advantage in identifying the products from emerging markets with the greatest likelihood of success at home.

March 25, 2014

Untamed Financial Innovation

Posted by Rajashekara V. Maiya (View Profile | View All Posts) at 10:27 AM


Flexcoin is the Latest Bitcoin Bank to Bite the Dust [Source: http://www.youtube.com/watch?v=D84Yq7sajNw]

When it comes to the world of entertainment, I enjoy two genres the most: the lavish Bollywood musical and the traditional Western. Both so enjoyable because it's so formulaic. Every movie Western ever made is essentially the same story; it's what happens when an unwilling hero decides, in the name of justice, to go up against those who would do us harm.

That being said, see if you can figure out which Western this storyline is from. I've removed the name so as not to give away the answer:

"On March 2nd ----, [name of bank] was attacked and robbed of all coins. The attacker made off with [amount]... As [name of bank] does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately. [Customers] who put their coins in cold storage will be contacted by [name of bank] and asked to verify their identity. Once identified, cold storage coins will be transferred out free of charge. Cold storage coins were held [not in the vault] and not in reach of the attacker. [Name of bank] will attempt to work with law enforcement to trace the source of the [robbers]."

I know what you're thinking. Did this movie star John Wayne or Clint Eastwood? And did it end with the robbers being hunted down by the sheriff in a climactic shoot-out? Well, excuse me for doing this, but I played a trick on you. The storyline isn't from an old Western but rather a press release from last week. The name of the bank is Flexcoin, a cyber-storagehouse of Bitcoin, and the amount the attackers (or hackers, really) made off with was 896 Bitcoin.

My point in making you think this was a storyline about the 1870s American frontier is that it could very well have been. During that era, bands of thieves ran roughshod over small towns and robbed their banks of all their cash and coins on a regular basis. It was a lawless, untested frontier - not unlike the realm of today's innovative cyber-currencies. And like the Web entities that store and trade Bitcoin, the banks of the Western frontier were initially unable to deal with outside threats to their security.

But then something happened, and it happened very swiftly. Financial services institutions of the late 19th century decided that the cost of not guarding their deposits was greater than hiring a top-notch security firm. The famed Pinkerton guards - a firm that exists to this day - began thwarting bank robbers and put an end to the lawlessness.

Bitcoin might have been dealt some serious blows lately, but it is certainly not the end of its run. True, Flexcoin was robbed blind and the even larger Bitcoin Web site - Mt. Gox - collapsed last week as well. But the markets tended to brush off both events. You read that correctly -- they largely brushed off those two events. Most people who deal in Bitcoin - including a plethora of small businesses and entrepreneurs who enjoy the innovation - seem to think that the latest security breaches simply come with the territory. In fact, many Bitcoin aficionados are saying that the attacks serve as a reminder that more needs to be done in the world of cyber-currencies. They say they must take precautions in order to ensure that hackers can't ruin what looks to be an exciting new way of doing global commerce.

Can you imagine if all the small banks on the Western frontier of the 1870s decided to close up shop, admit defeat, and go home? The banking system would be a lot smaller and a lot less developed in that area of the world. People never would have trusted those firms with their hard-earned deposits, and small businesses and merchants would have had a more difficult time establishing themselves.

That's why it's important for innovators in a new financial services arena to assess what went wrong and to learn from their mistakes. Every financial innovation experiences a period of uneasiness and even speculation. But as it becomes more accepted, you can bet that institutions, businesses, and people will do what they can to ensure that it becomes a safe way to pay for goods and services.

March 21, 2014

Crowd-Funding Becomes a Potent Digital Consumer Tool

Posted by Vaibhav Bakre (View Profile | View All Posts) at 9:35 AM


Angry Nerd: The Veronica Mars Movie Project and the Pitfalls of Crowdfunding Films-WIRED [Source: http://www.youtube.com/watch?v=8NKhg5YpGnM]

I don't expect many of you to be familiar with Veronica Mars. Outside of the world of teenage popular culture, few people know who this character is. But Veronica's recent 'comeback' serves as a valuable business lesson of just how potent digital consumers can be. Veronica Mars is a fictional teenager who solves "whodunit" mysteries. A television series based on her sleuthing abilities was popular for a number of years. But then, like most TV shows, the series ran its course and the network eventually decided not to renew it for another season. During any other era, that would have been the end of Veronica's story.

But fans around the world took to social media and demanded more. They wanted to see their young detective return. What happened next was extraordinary. Her fan base decided that they would put their money where their mouths were - they raised enough funds on the Internet to pay for a movie version of the show. That a bunch of mostly teenage girls around the world crowd-funded the production of motion picture has not gone unnoticed by media companies. Some 92,000 fans contributed a total of $5.7 million via the crowd-funding site Kickstarter to make the film a reality. It's the first time people used a crowd-funding financial service in this way. Indeed, there have been a number of important shifts in consumer power during the last century, and the Veronica Mars project is one of them.

Media companies are adept at analyzing ratings and knowing which television shows command the most lucrative advertising rates. So when they make a decision to cancel or renew a show, it's never on a whim but based of plenty of quantitative analysis. The fact that young viewers around the world established their own online community and raised the funds to keep the character going is a testament to how the media sector is evolving. People in the younger demographics are not the passive consumers that their parents or grandparents are; they watch shows when they want and, depending on the medium, can cut out the commercials.

Digital consumers act similarly when shopping as they do when watching television. They are not shy about telling enterprises what styles, flavors, colors, scents, and sizes that they prefer when it comes to the products on the shelves in front of them. Such demands improve the enterprises that provide goods and services to them because all that data is a treasure trove of information with which they can develop new products.

Our recent consumer surveys reveal that digital customers are very willing to provide information to companies if they feel they get some kind of value in return. In the case of the crowd-funding of the movie, the producer offered digital copies of the script for a donation of $10 and a chance at a walk-on role in the film for $10,000.

I predict that we're going to see plenty more television shows and movies come about as the result of crowd-funding, just as this financial phenomenon has resulted in the building up of businesses across the spectrum that serve the needs of various consumer groups. When consumer groups have a say in how their products are delivered or in what ways, enterprises become better able to address their expectations. That's a winning position for all stakeholders.

March 18, 2014

A Healthy Dose of IT

Posted by Manish Tandon (View Profile | View All Posts) at 6:18 AM


Healthcare Technology Outlook 2020 Technology uptake [Source: http://www.youtube.com/watch?v=8J6-W38YuU4]

Medicine has advanced to the point where the world's average age expectancy is steadily on the rise. For all that quantity, however, there remains the issue of quality. Lots of people are living long lives - far longer than, say, a century ago - yet instead of receiving cures to conditions, they're requiring a staggering amount of sustained and constant treatment while doing so.

That's where the right Information Technology comes in. The healthcare industry won't be able to continue making the same kind of gains it's made in the last 50 years. Without the right IT, the healthcare industry also won't be able to narrow the gap between simply extending lifespans and improving the quality of those lives.

It wasn't too long ago that the prospect of wearing a wristwatch-sized computing platform that could monitor and rely your vital signs to a doctor was a thing of science fiction. Today we have the advantage of deciding between such computers - even based on color and style! The next version of those platforms will inevitably be microscopic chips placed under the surface of the skin. No fashion decisions required.

What these development mean to the quality of healthcare is that medical providers will be more in touch with individual patients and also able to aggregate massive amounts of medical data. Even search engine companies are noticing that when people in certain areas of the world are entering keywords like "flu symptoms," there's a good chance that the virus is spreading in that area. One such search engines was able to determine the likely areas of flu outbreaks more rapidly than the U.S. Centers for Disease Control, which still depend more on traditional data-gathering techniques.

Can Information Technology that was developed for the aerospace & defense industry be applied to the healthcare sector? You bet it can. The healthcare industry is even learning from consumer friendly retail sites whose algorithms help shoppers find discounted hotel rooms and airline tickets. If you're in a big city and it's flu season, it sometimes can be difficult to get an appointment to see a doctor immediately. What new healthcare Web sites are doing is to apply the same retail notion to medicine: If someone cancels an appointment with a doctor at the last minute, you will be notified via text and can get in to the office for treatment a lot more quickly.

Of course, with the right IT platforms, who says the future is filled with trips to a doctor's office? Much of the analysis, diagnosis, and treatment will increasingly be done online. Think about the ramifications remote treatment can be for people who live in extremely remote and/or rural communities. Healthcare IT encompasses a lot more than most people think. It's about leveraging informatics, Big Data, and software solutions to design products and services that can be used by just about every relevant party: health insurers, hospitals, healthcare product providers, health management providers, pharmacy benefit managers, retail pharmacies, pharmaceutical & biotech firms, and even medical device manufacturers.

Information Technology is changing the world of medicine: The healthcare analytics solution from Infosys, for example, allows payers to accelerate their innovation agenda, differentiate their products and services, enhance customer experience, and achieve greater operational efficiency. It's a solution that we created because of both increased competition and the need to reduce administrative costs - all while enhancing customers' experience.

The whole value chain has changed: sales and marketing, operations, care management, provider management, member management, and finance & compliance. Using data-driven insights to formulate strategies is now a major focus for health plans. And it will be for patients as well.

March 12, 2014

Why Social Innovators Know No Limits

Posted by Soundararajan S (View Profile | View All Posts) at 10:04 AM


Aurolab, Jaipur Foot - Infosys presents Innovating for a Better Tomorrow [Source: http://www.youtube.com/watch?v=wxboOIgTKb8]

During the filming of "Innovating for a Better Tomorrow," an influential television series that debuted in India in February this year, the deputy editor of CNN-IBN asked Mr. Murthy if he saw any difference in the culture of innovation and entrepreneurship between now and 30 years ago. His answer was motivational: Today there are more fresh ideas and budding entrepreneurs in India than there were three decades ago. And their commitment to social progress is more resolute as well.

Economists have argued for centuries about the limits of private investment and entrepreneurship. Is it the responsibility of governments to provide all of the funding and infrastructure by which economies run, or can private entities fuel these engines of progress as well? If recent history is any judge, then it would certainly appear that it would be the latter.

So what is it about the innovations that rise up out of companies and entrepreneurs that are so potent? Clearly it involves the culture of risk-taking. In fact, the theme behind the nine-part "Innovating for a Better Tomorrow" series was to showcase what happens when individuals go out on a limb, risk their own capital, and attempt to build businesses that result in progress and job creation.

The reason a city like Bangalore has boomed over the past decades is because of its culture, according to Mr. Murthy. In other area of the world, if an entrepreneur's business doesn't get off the ground, onlookers might classify the project as a failure. But in a place where innovation is cherished, failure is not a word that people toss around. If someone has enough aspirations to do good by doing well, then a setback is just that: a temporary glitch in the road to progress.

Great social innovators begin their journeys by solving problems. During the interview with Mr. Murthy, the journalist pointed out that sanitation had become a big issue in India. They chatted about how some of the most promising innovations coming out of the private sector today are addressing basic problems like clean water and sanitation. These aren't areas that are glamorous like software, but they're nonetheless needed around the world. And because they're needed, the market has a pent-up demand for the right solutions.

When innovators work towards creating a market for their goods and services, they're ensuring that society around them improves - whether they are doing it consciously or not. The activity itself, whether creating ways to educate rural children or develop method to bring electrification to the masses, allows others to begin taking business risks as well.

Business risks are a positive force. Have you ever heard of the term that venture capitalists like to use? They like to talk about "dry powder" - a reference to gunpowder. The funds that these financiers set aside to make their next big investments are not unlike dry gunpowder that, when put into the barrel of a gun, creates the spark that fires the ammunition. Every innovation needs a financial spark to move it forward at a fast speed as well.

That's why innovation hubs like Bangalore and Silicon Valley need venture capital. That's the money that fuels the ideas and makes them come to life. It also allows risk-takers to be more unafraid of their own aspirations.

Risk-taking isn't just for start-ups. When a large organization has many areas of expertise, risk-taking is what binds everything together. A culture of innovation allows that company to improve upon everything it does. It helps enterprises overcome some tough challenges and meet the demands of tomorrow's marketplace.

We can't help but think that Mr. Murthy has, in a way, re-fashioned the same atmosphere he had back in Pune more than 30 years ago when he was building Infosys from the ground up. That is to say, he has surrounded himself with an ambitious young team that isn't bound by conventional standards. This team isn't scared to ask why. It's unfettered by department heads and long meetings. Which might just be the spark for which Mr. Murthy is looking.

March 10, 2014

Understanding Digital Customers

Posted by Puneet Gupta (View Profile | View All Posts) at 10:39 AM


Digital Experiences in Retail [Source: http://www.youtube.com/watch?v=mjOoaiKlh9U]

One of the most popular action movies of the late 1980s was Robocop. I was thinking about it recently because they've recently released a remake of what has become a sci-fi classic. The half-robot, half-man would interrupt crimes in progress and tell the thief, without a whiff of emotion: "Dead or alive, you're coming with me. Thank you for your cooperation." Part of the fun of the movie was to see Robocop face criminals so resolutely.

Sometimes I recall Robocop when I encounter a salesman at a favorite department store. I wonder to myself if he is indeed half robot and doesn't display the slightest effort to try to get to know my fashion preferences. Therein lies the challenge of today's enterprises what are armed with better tools and more sophisticated technology than ever before. Despite those tools, do they risk distancing themselves for the consumer rather than creating closer connections to them?

Some of the big online retailers have caught on. They're creating their own bricks-and-mortar experience on tablets for the very reason that traditional retailers have become Robocops of sort, plodding around their sales floors and pushing merchandise without making lasting connections to the customer. Technology works best when consumers are enabled with powerful tools that let them make decisions and see for themselves the different options before them.

Did you know, for example, that 84 percent of consumers around the world say they trust recommendations from friends and family as the best and most accurate source of information about products? According to a Wharton study, that's up from 78 percent in 2007. Clearly we can thank the rise in popularity of various social networks. But according to the data, simply throwing a page up on a social network isn't enough. Enterprises need to know what they are about and what moves customers to them in the first place.

If you haven't already seen the results of our work with the European Business Awards, I urge you to check them out. We partnered with the EBAs as a way to detect what went into creating a winning global enterprise. One of the things we discovered was that technology spending and development was traditionally viewed against a backdrop of efficiency. Companies used to assume that you could have technology or you could be more efficient and that they couldn't compliment each other. The EBAs showed us how technology actually makes organizations more efficient by focusing their missions and cutting excess spending.

That's why you're starting to see large retailers concentrate on Big Data - the kind that allows them to drill down into consumer expectations. They can know where to focus their activities with the greatest results. One of the places they're learning a lot about there days is how to rein in certain social networking activities in order to achieve the optimal outcome.

One of my colleagues is constantly reminding me that if you have a good sales proposition, and actively engaged consumers, then it really doesn't matter which channel you're engaging them on. It's the multi-channel approach, to be sure, but it gives us pause that the foundation of any business proposition must be strong before any of the tangential elements take effect. One academic has warned that although companies are allocating more and more to social media budgets, they automatically think that they're targeting their message, which isn't necessarily true.

Understanding why consumers talk the way they do about your enterprise is key to unlocking the overall value proposition. True, it's an established fact that word of mouth marketing is 10 times more effective than traditional means of advertising. That's why we need to make sure what our customers are talking about it what we want our corporate messaging to be.

When Infosys helps a retailer rein in customers who are walking around the sales floor in order to engage them with personalized treatment, those consumers are likely to take to social media and tell they friends. They might even involve their friends in with purchasing decisions. That's why the entire sales process must be modernized to reflect the digitally savvy nature of today's consumers. They're already creating a value proposition for your firm. It's best you be a part of influencing it.

March 5, 2014

Come, Innovate, Disrupt

Posted by Sanjay Purohit (View Profile | View All Posts) at 12:01 PM


Why did Facebook buy WhatsApp? [Source: http://www.youtube.com/watch?v=ocMyXXAYnVY]

Recently, members of a now defunct exclusive hacking club got together online to celebrate not a breakthrough break through, but the spectacular success of one of their own - Jan Koum and his US$ 19 billion Whatsapp deal with Facebook. This was the latest in a not very short list of successes of the club's alumni, which included at least one of Napster's founders, and those of Cloudmark, Servio, Duo Security and Immunet, among others.

If ever there was a metaphor for the power of disruptive-innovation this must be it. But urban-legend-status notwithstanding, the truth is that manifestations of disruptive innovation are few and far between - a corollary of the fact that only a tiny fraction of the young and restless who want to disrupt and innovate actually go out there and do so. The vast majority finds its way into the portals of the conventional workplace, nurturing that deep-seated desire all along.

Enterprises, large and small, which take such fresh blood on board, have a great opportunity to harness their latent talent for innovation. For that, they would need to provide an environment that allows for some experimentation and its often unpredictable consequences. They would have to create a culture that encourages free thinking and creativity, and give it expression by providing a platform for potential innovator-disruptors to collaborate, exchange ideas, and manipulate the tools of technology at their disposal. From that point of view, the timing couldn't be better. A wave of new, affordable technologies, like Cloud or 3D printing is giving a boost to innovation by enabling it with fearsome technical capability, at low cost and short time to market; it is up to the organizations to put these within reach of their innovator employees.

On the other hand, the task for talent managers would be to facilitate connections within and across the organization, support entrepreneurial and innovator roles responsible for implementing new ideas and concepts, and cater to both individual and team needs.

Those daunted by this challenge can draw inspiration from a company like eBay, which turned itself around by embracing disruptive innovation. eBay consciously acquired companies founded by young entrepreneurs and then gave them a chance to "innovate on scale". Enterprises looking to do the same must first guide their young employees to fix innovation goals, and then throw the organization's weight squarely behind them to allow experimentation without fear.

March 3, 2014

How Technology Fuels a Cultural Change in Banking

Posted by Rajashekara V. Maiya (View Profile | View All Posts) at 11:10 AM


Technology at Morgan Stanley [Source: http://www.youtube.com/watch?v=hGXHi5jJA2M]

The financial services industry is at a crossroad. OK, I know what you're thinking: That sector is at several crossroads. Post-global economic crisis, it's probably the most interesting time to be in or be observing the big banks. There is a profound cultural shift that is emanating from within the world's most prestigious and well-known banks. Many banks have decided that a culture of overwork has had its day.

If any of you have worked in a financial services firm, you're aware of how long the hours can be. "Face-time" is an aspect of this culture. You want to make sure that the managing director sees you in the office at all hours, even if you're not necessarily working on a project. For the better part of the last couple centuries, being upwardly mobile at a bank meant putting your personal life on hold and devoting your life - seven days a week - to the firm.

There is a new study out by a prominent business school professor that found that the 120-hour workweek is not uncommon in the banking world. In the old days (meaning before the mobile telephone) an associate could work 120 hours a week but go home for at least a short time and get away from the daily grind. But now that mobile telephony and the Internet have become key tools in the banking world, there is no such thing as down time. The study turns long-held assumptions on their heads. First, there exists a threshold (whether it's 80 or 100 or 120 hours) that most people cross and when they do, they have a hard time maintaining their quality of work. It's ironic that it took financiers this long to figure out that long hours don't necessarily translate into productive hours.

The second finding was that despite technology being a liberator of many businesses and sectors, it often times restricts the prospects of people who don't use it properly. A very tired and overworked trader, for example, at his desk for the better part of a day, might not be able to execute a sophisticated trade properly or might let some lucrative opportunities in the market pass him by.

The moral of this story for those of us who provide technology and other solutions for industries that include banks is that we have some golden opportunities to shine. Banks are recognizing that placing limits on how available an associate is by telephone or email can actually improve the bottom line. My prediction is that you're to see more of a demand for technological solutions that allow for bank customers to perform certain functions even without a human interface. That means the better-rested associates within a bank will be freer to innovate.

Many of us were quite amazed when some of the world's largest banks sent out memos to their employees saying that from now on, they had to take Saturdays off. Or that junior analysts must limit themselves to no more than 80 hours a week. When an entire culture can realize the limits of how it is using technology - and that it can do a lot to improve itself with that same technology - it's a reassuring sign.

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