While technological disruption has opened
up new business avenues, one of the greatest impacts it has had is on employee
productivity. Today we have adopted technology to automate repeatable manual processes
to ensure faster turn-around time. This has completely changed the IT landscape.
Consider that traditionally companies used to charge for human effort and how that
dynamic has been disrupted with automation. With automation, a task that used
to take a huge amount of effort and consumed a lot of time can now be done with
significantly less effort. Automation has made software development faster,
less effort-intensive, and easier. Keeping this in mind, how can low-cost
geographies such as India still remain relevant in the competitive market
space, considering that their one most powerful tool, the labour force is now
being replaced by the march of the machines? How can Indian IT services
companies continue their dominance and have favourable profit margins when they
can no longer stay tied to human effort for their revenues? The answer lies in
one of the most overused words of this decade - ‘Innovation’.
Not many will argue that over the years the
ability of companies to innovate in services has been a key contributor to their
business success. It is also true that innovation in IT services is a complex
task owing to the heterogeneous nature of activities. Change in organization
models, modalities of serving markets, varied inputs, co-terminality between
production and consumption and the information based and intangible nature of
services, service variability etc. are some reasons that make innovation a
little more complicated. Clearly, the challenges are many but the truth remains
that innovation is not only essential for profitability but is now crucial to remain
relevant. Innovation thus is no longer a ‘nice to have’ but is a critical
component of staying in the game.
Robert Shelton, managing director of the
Growth and Innovation practice in PwC’s PRTM Management Consulting Group, says
“Innovation is growth these days.” It is only an emphasis on innovation that
can generate higher revenues, increase profitability, and increase market
share. In order to pump up the innovation quotient, IT services organizations
have to take a step away from tradition and identify means to weave innovation
into the very fabric of the organizational structure.
Is there a magic recipe for innovation?
No, there isn’t. However, what is evident is that a linear approach is not the
answer. Innovation is not a one-man game. It is a team sport. Taking
cross-departmental approaches that encourage collaboration and are grounded in
market considerations are the order of the day. Having well-defined operational
processes that help in identifying new business opportunities, identifying
areas that are wanting most in innovation,and encouraging employees to become
proponents of innovation by putting creative thinking to profitable use can
have a deep impact on the Innovation IQ of a company. Some factors that can
help organizations become more productive in their innovation efforts and get
more value out of their innovation focus are:
- Looking at customer collaboration
- Identifying the right talent
- Looking at partner investments
- Identifying business areas that can transform themselves with technology adoption and become more agile
- Creating processes and structures that allow employees to experiment with new ideas and get more value out of the innovation dollars.
If we take a look around us, companies
such as Apple, Google, Facebook, Netflix etc. have achieved a cult status of
being some of the most innovative companies in the world. They are highly
valued by their customers and investors alike. These companies have a few
things in common – they are open, they have a culture of collaboration and they
are focused on developing forward-thinking strategies by having active
listening mechanisms to gather customer feedback.
It is abundantly clear that technology disruptionwill
always be a factor in the IT business. While there are certain challenges that
arise from this, there also lies immense scope and opportunity for those
willing to adopt evolution and be the protagonists of change by adopting an
innovative mindset. For those who do, the world is their oyster. Literally.
