Birth & Growth of Innovation in India

Innovation does not happen at an instance in time, it's an ongoing activity. Like how an egg is carefully incubated under the warmth extended by the hen's body, innovation needs that initial hand holding. This essentially comes from the innovators themselves. And like how the chicken sees the daylight outside of the egg shell, innovative ideas also see the daylight. Like how the chicken is carefully nurtured by the hen, the idea needs to be nurtured by the innovator.

End of the day, it's all the same - Innovation is not an elusive something. It is something that is bound to happen. It's the law of nature. The chicken or mankind all are good examples of innovation - we are unique with a set of different and unique qualities. Try to look at innovation this way, and you will get rid of that fear inducing question - "Can I innovate? Can I also be an entrepreneur?" clouding your thoughts.

That said, here is the next big mythical question "Is India only an Outsourcing hub? Why aren't there many Indian companies with great products?" I've read many such articles in the internet, especially in the last one year, where authors have expressed this feeling. Lately I also read Sramana Mitra's (@sramana) article on Forbes and her blog post sometime back.

Firstly I'd like to point out that innovation is not necessarily related to creating great products. India has had a high innovation quotient all along - even creating great service outsourcing companies need innovation. I'd rather prefer to call the bunch of body-shopping IT companies as the ones who've given a bad name to outsourcing in India. Unfortunately, these companies do continue to survive even in these testing times!

On the products side, in my opinion, below are some of the critical factors that have affected the birth of product innovation.

Factors affecting the birth of product innovation -

1. The Indian education system - At large, these continue to teach courses that nourish bookish thinking rather than out-of-the-box thinking
2. Indian colleges & universities - These continue to advertise as "100% placement"
3. The Indian upbringing - We still continue to coax our kids to take the safer route. The risk-taking attitude is seldom seen here. I also agree with Sramana Mitra's thoughts on the effects of "colonization" in India - it's very true.
4. Lack of quality talent - I've faced this - haven't been able to find high quality talent who would work for a early stage startup. They eventually run away when they get an offer from Cognizants and the TCSes of the world
5. Intellectual Property (IP) rights - Inability to truly protect IP has been a big challenge for those daring entrepreneurs to hire talent. The young and talented ones sign any non-disclosure agreements without consciously abiding by them
6. Lack of early stage seed fund - Because of the above challenges, early stage entrepreneurs will have to compete with the Cognizants and the TCSes to pay competitive salaries, which warrant sizable capital. Unfortunately, seed fund is still tough in this part of the world

These are larger level issues that we'll need to collectively answer. First realize that you need to start by cleaning the ship deck before becoming the captain of the ship. Stop drooling over fat salaries and start taking risks right from the beginning. Take a baby step, crawl and then start to walk. You will fall, but don't give up. Remember this is the start of your marathon dream!

Top 10 Strategic Technologies for 2009

Curious enough, I was digging through Gartner's shelves. Here is what I bumped into - Top 10 Strategic Technologies for 2009. Gartner has identified the following 10 technologies (in the order mentioned below) as the toppers for 2009 -

• Virtualization
• Cloud Computing
• Servers — Beyond Blades
• Web-Oriented Architectures
• EnterpriseMashups
• Specialized Systems
• Social Software and Social Networking
• Unified Communications
• Business Intelligence
• Green IT

There is nothing you might really want to observe with just this list. The curiosity arose when I was trying to compare the above list for 2009 with the list that Gartner released for 2008, which went as follows -

• Green IT
• Unified Communications
• Business Process Modeling
• Metadata Management
• Virtualization 2.0
• Mashup & Composite Apps
• Web Platform & WOA
• Computing Fabric
• Real World Web
• Social Software

It's quiet interesting to observe the fact that Green IT has moved all the way to the bottom of the list. Also, Computing Fabric seems to have disappeared? No, Gartner has preferred to explicitly call it Servers - Beyond Blades this year. In my opinion, Cloud Computing has been the one significant inclusion in the 2009 list of technologies. Yes, indeed this technology is fast catching up and many companies have gone ahead to set up cloud centers. More on cloud computing in a later post.

Green IT is more of a buzzword that is going to be floating around for the next few years. In a nutshell, Green IT is more about how we can implement technologies that are friendly to nature (viz., lower emission, low power consumption, lower heat dissipation, etc).

Below is a video where David Cearley discusses these top 10 technologies at Gartner Symposium/ITxpo Orlando 2008.

With the economic slowdown, these technologies will definitely play a key role in shaping the world and aiding mankind.

It's Business and not Technology that Leads

A brief look into the history books would set the picture right - Technology jumped in to help man do things more effectively and faster. The wheel was invented when man wanted to move heavy boulders from one place to another. The computer was invented to help man perform calculations much better. The list is endless. The crux of the matter being that the need leads and the technology just follows. When needs become endless, technology starts to evolve!

Due to technological advancements, the world started to rely on technology more than what was earlier. The setting in of the Information and Technology era marked the setting in of full fledged usage of technology in business. Over a period in time, the world got into a technology rat race. IT companies started to compete in the technology space and businesses started to chase success with the usage of better and sophisticated technologies. Eventually, many of the non-IT businesses started to set up an IT arm to pursue its techno dreams.

In the pursuit of technology dreams, businesses started to get more technology dependent by slowly getting more of their business closely linked to IT. Today, most of the world's biggest businesses across different industries are heavily based on an underlying IT infrastructure. Unknowingly, the leaders and head honchos of world's biggest businesses have invested so much into IT, that they cannot survive without it.

Inadvertently, the IT heads of these non-IT businesses have started to focus so much on technology and lost focus on the real business objectives! In bigger corporations, this problem has been accentuated by the inter-department/intra-company politics - Often, there is a clash between the business, functional and the technology wings of these corporations!

The latter point mentioned above has resulted with information redundancy due to the creation of information silos! In simple terms, this is nothing but information gluttony. This inter-department/intra-company politics sometimes goes to such an extent that the IT management shuts doors to the business teams, and eventually sets up an IT infrastructure that is sometimes contradictory to the actual business need!

"IT people have a fundamental belief that they're not doing anything wrong," says Tony Fisher, CEO of data-quality specialists DataFlux. "That's because they lack an understanding of the business at large. You end up with an environment where the IT manager sits in his office naive and happy, thinking he's doing all the right things, reading all the right journals, and executing everything according to specs that have everything to do with technology but little to do with the business."
- Excerpt from Dan Tynan's article on CIO.com

In a time of recession, it's more important for businesses worldwide to focus on resolving these intra-company politics and work in unison. When the demand is low and the operations are slow, businesses should start to realign their departments and operations in a way that lets the business drive and use technology as a means to grow. Taking an inward view of their internal operational layout will help businesses fine tune and innovate their operations and approach, thereby becoming a lean and agile enterprise!

Information Technology in Mergers, Acquisitions (M&A) and Joint Ventures (JVs)

With the world economy undergoing a trough, most often people (in the business of IT) tell me -

Oh, we are going through tough times...while some of my customers are more resistant to new initiatives, some have declared really negative earnings for this quarter. I believe we need to wait and just let this period pass through...but again, the pressure build's up from my bosses!

This was actually told by a acquaintance of mine. I'm not surprised by this, as I've heard many others say this too. Echoing these words a few more times makes things more lucid than what it actually sounds like. As I've always believed in, every challenge comes with a set of opportunities.

Since the past few years, one would have noticed the change in way businesses across the world starting looking at the market. We've seen a number of mergers and acquisitions (M&A) and joint ventures (JVs) happening across the different businesses. The resulting IT complexity has always been a challenging task for CIOs and other IT leaders of these businesses. What better news can IT vendors get? There is a CIO who is crying "It's a mess - HELP ME OUT!"

This is the time when IT vendors need to wear the innovator's hat. These times are the ones that offer utmost opportunities to IT solution vendors. India is a garden of such opportunities especially in the manufacturing space. From automotive to petroleum to steel industries, all companies are eying India as a preferred destination for setting up shop. Unlike the past, international players are looking at setting up joint ventures with Indian companies that helps them enter a new market in many ways.

On the other hand, Indian biggies are acquiring companies in other parts of the world. This has resulted in the merging of companies due to acquisitions, which again has posed considerable challenge to the IT heads of these companies. M&As are more than just two corporate entities merging. It's about merging of cultures, merging of values, merging of corporate and IT governance models.

So, in a nutshell, to an IT leader, such market moves (M&As and JVs) mean more than just "IT" integration. In my next article I would be diving a little bit deeper into this topic to talk about SOA in the context of manufacturing. Till then, stay tuned!

CIOs and IT Leaders - Having SAP Nightmares? Read on...

I've seen a lot of buzz around SAP and heard a good number of my customers/partners raise this concern in the past many months. I've also been following the series of articles by Thomas Wailgum at CIO.com on this topic. In this article, we'll try to take a few steps back in time, and understand how it started. We'll also see how it evolved over time. Towards the end, we'll also see, as leaders in the IT space, a way to tackle this. The its and this' refer to the ERP bugaboo.

It all started in the early 2000's, right after the dot com boom, when the senior IT management teams of many companies wanted to manage their wide spread businesses effectively. From a management perspective, they thought that having a single ubiquitous platform would help from both talent acquisition and software management perspectives. This was the time when SAP's ERP suite was launched (mySAP ERP was launched in 2003). This suite offered four individual solutions, each addressing specific functional areas, namely-

1. Human Capital Management
2. Financials
3. Operations
4. Corporate Services

Over the next few years, these customers of SAP were happy with their investment decisions. These companies started to implement these solutions for their enterprises. But slowly, over a period in time, these companies pretty much reached a stage where they completed implementations of these solutions. As their corporate footprint and needs increased, they sought SAP's assistance to deploy these solutions for the newly inducted companies as well.

In the background, there was this monster called complexity that was growing. SAP was continuously adding newer features and releasing newer versions of these solutions. With the new deployments of SAP's solutions, these customers slowly started to realize that they needed to manage these different versions of solutions across their enterprises. This is when SAP introduced their Netweaver integrated technology platform, which was intended to help manage this complexity of different SAP versions. However, they later chose to call this a service-oriented application and integration platform.

Assuming the above fixed the problem of complexity, these companies started to look at the other side of the business - beating the competition and creating a unique business value to their customers. This resulted in the business teams of these companies coming up with some strategic initiatives and strategic business processes. This is when the ball was thrown back to the IT Leaders and CIOs to think of ways to implement these strategic business processes.

Still enchanted by SAP's ERP solutions, these IT Leaders resorted to implementing these strategic business processes in the same SAP platform using the programming languages like ABAP, etc. Now, the monster started to surface again! This time, it came with a greater force and impact. With the existing complexity of managing different versions of the SAP ERP, the companies were now put through a challenge of having to deal with different versions and fixes of these individual custom processes/modules that were deployed to address their strategic initiatives.

Let us now try and remind ourselves that SAP ERP was designed to address the resource management related processes (related to corporate operations, financial processes, human capital managment and the like). These processes are typically found in every enterprise, whatever industry or business they may be. When we talk about strategic business processes, we refer to those unique business processes that help an enterprise/corporate differentiate itself from its competition. The truth is that SAP's ERP was NOT designed to handle this! So, it was a Square Peg in a Round Hole.

IT Leaders looked at managing complexity in the short term, but failed to see the complexity in the longer run. So, is there a way to tame this man-made monster called complexity? Yes, there is. Read on...

Start differentiating between your strategic business processes and your ERP processes. Keep the latter in your existing ERP and move the former to a common, enterprise-wide platform that conforms to IT and Industry Standards. It's very important to think about the IT and Industry standards because your enterprise is bound to have disparate lines of businesses and different softwares from different vendors. You will need to have a platform that will seamlessly integrate these different systems and software.

From an IT Standards perspective, Service Oriented Architecture (SOA) has is a proven approach that offers the maximum flexibility and seamless integration capabilities. Though SAP-AG chose to call their Netweaver platform as a service-oriented application and integration platform, it isn't really so. Just because your integration platform allows its applications to be exposed as Web-Services, does not mean that it is SOA compliant! To know more on the difference between SOA and Web-Services, read this article.

To summarize, take a closer look at your ERP usage and try to separate out those non-ERP business processes. Adopt the SOA approach to your enterprise's IT architecture. It helps your business and IT be more flexible, agile and robust.

For further reading:

1. AMR Research article titled SOA will kill ERP
2. Forrester Research on ERP and SOA
   

Think Beyond Cost Cutting - Managing IT during an economic downturn

Many Indian companies which are into the services outsourcing business, have been going though a rough patch with the rampant recession in the United States. Many Indian services companies have a larger share of customers in the United States. Due to the growing recession, many companies in the United States have been looking to reduce their IT (Information Technology) expenditure. As a result, these companies have started to pull out projects that were earlier queued up for outsourcing.

Over the past decade, many companies (whatever their main business has been), have increasingly got dependent on IT. This has resulted in a greater portion of the investment capital being assigned to IT. It seems like many of the companies have had a stereotyped way of thinking. While they've been thinking of reducing IT costs, they seem to have missed the bigger picture. In many cases, a little bit of extra investment in the right IT initiatives, can help optimize their business and hence save overall costs.

To better understand, let us take a little deeper view into the increased spending by companies in the SAP related initiatives. Many companies have increasingly invested a lot of money into ERP (Enterprise Resource Planning) over the past many years. Specifically, many companies have implemented a lot of their ERP processes using SAP. Over time, due to an increased need to have a single IT platform (and other needs like costs, etc), companies have gone ahead customizing SAP to implement a lot of other business processes.

Today, many of these companies have been spending a lot of money to customize SAP to implement some business processes that help them differentiate from their competitors (strategic initiatives). These costs are primarily to manage this customization and the resulting problems/complexity. The truth of the matter is that SAP was designed to manage resource management initiatives/processes and not to strategic initatives/processes. Trying to implement strategic business processes in SAP has resulted in unnecessary expenditure and a resultant growth in complexity.

The above is just one example of how companies catch the tiger by its tail and lose controlove rtheir IT infrastructure. The solution is NOT in cutting these costs, but in investing in the right IT initiatives. Information is the key to any business. By effectively utilizing this information, companies can get deeper and better insights that can add value to their businesses. On the other hand, designing the right and optimal strategic business processes can help businesses reduce costs.

This month's McKinsey Quarterly article titled Managing IT in a downturn: Beyond cost cutting suggests some interesting ways for companies to look beyond cost cutting. It also presents some interesting facts and figures to support the same.

Whats the next Big thing in the M&A world?

With Yahoo! rejecting Microsoft's unsolicited $44.6 billion bid, the buzz has come to an end now. After a series of meetings over the past week, Yahoo's board determined that the $31 per share offer "massively undervalues" Yahoo.

I personally was very curious on whats going to happen to this deal. But it all concluded the way I felt. The deal, if materialized, could have seriously damaged the way the software industry's future...making it more proprietary oriented. Anyway, Google is now very happy, and I assume so is the Yahoo! board.

Now that this has come to an end, whats going to be the next buzz in the world of M&A?