© tata consultancy services ltd.1 1 innovation in emerging markets – the case of tata consultancy...
Post on 20-Dec-2015
231 views
TRANSCRIPT
© Tata Consultancy Services Ltd. 1© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
1
Innovation in Emerging Markets – The case of Tata Consultancy Services (TCS)
D. Prasad RajuVice President & Head of US Midwest Operations
Indiana University – Kelley School of Business
2© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
2
Pioneering Indian Industries since 1868US$ 17.8+ Billion; 250,000 employees,80+ companies, committed to society
Steel
India’s Largest
Vehicles andEngineering
India’sLargest
Energy
India’sLargest
Pvt SectorPlayer
IT Servicesand Consulting
Asia’sLargest
&Global No. 12
Telecom
Top 3in India
Hotels
India’sLargest
Luxury Chain
ConsumerGoods & Retail
World’sNo 1
Tea Producer
The Tata Group
3© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
3
Business Partners to Fortune 100 Companies
(6 in top 10)
Pioneer of
Onsite /Offshore ModelFirst & Largest:- S/W R&D Center in India- S/W Exporter in India- Indian S/W company to cross the USD 2 Billion mark in revenue
Flag bearer of Indian IT Industry
2005-06 RevenueUSD 2.97 Billion
Chinese Presence since 2002
TCS-Asia’s Largest Global Software & Services Company
Beyond the obviousTM
Over 62000 ConsultantsOver 150 Offices
Across 34 + Countries
Commitment to Community
Strong Domain Focus Strategic Alliances with
leading product Vendors
First Company to get
Integrated CMMi & PCMM
Level 5 Certification
Vision: Global Top 10 by 2010
Established in India in 1968
US Presence since 1976
4© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
4
“TCS brings deep experience to its offering, since it has been supplying remote operations in India for many years.”AMR Research – November 30, 2004
Developing Solutions & Delivering Value
5© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
5
• Vision : Establish World Class Solution Delivery
capability – we already have a superb
infrastructure
• Current Strength: 415+ Consultants
• 90% Local Recruits
• First & Only Company in China to have 5
certifications: CMMI & PCMM level 5, ISO, BS7799
& BS15000
Tata Information Technology (Shanghai) Co. Ltd塔塔信息技术(上海)有限公司(中国第一家通过 CMMi 和 PCMM五级的公司)
First Indian IT company to set up its operations – set-up in June 2002
Registered Office at Shanghai Shanghai – SAP & Oracle CoEs Shanghai & Hangzhou – Delivery Centres Beijing – JV Academic Interaction Programs with leading
Universities in China
6© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
6
Future trends in Global Service Delivery
7© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
7
The Need for Global Sourcing – point of view
Context Increasing Instability Increasing Competition Acceleration of
Globalization Decreasing
Competitive Advantage Demanding Customers
Potential Benefits Business Flexibility Cost and Process
Efficiency Speed Focus Improved
Competitiveness Stakeholder Value
Outsourcing
8© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
8
Current Outsourcing Models “Transfer” Deals such as Traditional IT Outsourcing and Business Process
Outsourcing – this, can be of three types Selective – typically a single function is outsourced with objectives of reduced cost and additional
capability Strategic – major process or functions are outsourced with additional objective of implementing a
different management approach: Focus on core competencies, variable cost structure, etc. Value Based – typically large unique Strategic deals that significantly increase the suppliers and
clients market value. Also enables Clients to leverage stranded assets and share in the value created
The Emerging Model – “Transformational” Deals A relationship that is designed to put the client and service provider “in the same boat” to create
value for the client’s business through Outsourcing non-core activities Focusing on strategic capabilities Collaborating across the enterprise
These deals are structured to deliver defined business outcomes, as expressed by clients’ business – the service provider takes some risks associated with delivering against these business outcomes
9© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
9
Global Sourcing - Collaboration on the rise
‘Coopetition’ gaining acceptance in this space
India based outsourcing companies are building closer ties with Western outsourcing and consulting companies
BTO providers, BPO providers, and ITO providers are also collaborating
Products and Services companies are collaborating
Benefits include Pooling of resources and Joint Go to Market Strategies Enhanced offering portfolio and Brand Equity Increased reach in newer markets
10© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
10
Growth in Services Outsourcing – Takeaways
The stage is now global Ignore the rest of the world at your own risk!
To grow, outsourcing firms must collaborate The best opportunities demand diverse talents and shared risk
Growth will come from multiple fronts Both organic and inorganic opportunities will play an important role
Managing growth is as difficult as achieving growth We should not lose sight of where we came from, who got us there,
and who we are accountable to for our past accomplishments and future success
Our Customers shall continue to be our most important stakeholders
11© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
11
Innovation in TCS
12© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
12
Background and Motivation – Innovation in TCS
1. A Vision for Innovation Initiative2. An Innovation Architecture
across the organization elements
3. A distinction between sustaining and disruptive innovation
4. An Innovation Process5. An Innovation Network across
key stakeholders
We established… 1. Create measurable competitive
advantage and business impact2. Create a Technology Brand that is
visible to our stakeholders3. Leverage the Technology
Ecosystem around us4. Attract, build and Retain great
Technology People5. Position Technology Innovation
with a ‘vertical’ focus
We will..
We need to Institutionalize and Scale up Innovation in TCS
Key learning Stretch Goals
13© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
13
Scope of Innovation Extends across the Enterprise
Internal IT Systems
People Processes
Knowledge Processes
Supplier / Partner
Processes
Innovation in Our Enabling Processes
Internal IT Systems
People Processes
Knowledge Processes
Supplier / Partner
Processes
Innovation in Our Enabling Processes
Customer and Market models
Strategy Processes
Leadership systems
Innovation in Our Business ModelsBusiness Models
Customer and Market models
Strategy Processes
Leadership systems
Innovation in Our Business ModelsBusiness Models
Delivery Processes
Innovations in our DeliveryDelivery Models
Delivery TechnologyDelivery Infrastructure
Delivery Processes
Innovations in our DeliveryDelivery Models
Delivery TechnologyDelivery Infrastructure
Technology Offerings
Service offerings
Innovations in our Offerings
Domain Offerings
Product / IP Offerings
Technology Offerings
Service offerings
Innovations in our Offerings
Domain Offerings
Product / IP Offerings
14© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
14
Sample: Establish the Innovation Network
TCS
Corporate Customers
Customer’s Customers
Alliance PartnersPartner’s Partners
Academic Institutions
StudentsIndustry Bodies
Members of bodies
Startup Companies
Venture Capitalists
Research Institutions
Governments
TCS is establishing an Innovation Network – and we believe that this ecosystem will be of great benefit to TCS and to all the participants
15© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
15
TCS’ Focus on Software Research and Development
Products, tools and assets
Released commercial products
MasterCraft – Model based software development
Assent – Code inspection and standards checker
Consult – Experiential knowledge management
Infrex – Business rules management
Proven tools and assets
Testify – Test automation
Revine – Reverse engineering
KDD Toolkit – Library of data mining / statistical processing
In Design / Pilot Stages
Terese – Intelligent text search
Inx – Information extractor
16© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
16
Decision Support Systems
Decision Systems Initiative
Knowledge management
Case-based reasoning
Rule based reasoning
Natural language processing
Information extraction
Information retrieval
Business analytics
Analysis
Modeling
Prediction / Forecasting
Knowledge discovery
Decision tree induction
Statistical classifiers
Support vector machines
Sequence mining
Clustering
TCS’ Innovative Research on Decision Support Systems
19© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
19
Some Applications may not be simple conversion, may require reengineering – new functionalities can be added in the process
TCS’ – Tool Based Methodology for Legacy Reengineering
Legacy System
Current Business and Technology Drivers
System AssessmentSystem
Assessment
ReverseEngineeringReverse
Engineering
TCS’ Reverse Engineering Tools
(CasePac & Revine)
Desired Businessand Technology Requirements
ArchitectureDefinition (Business
and Technical)
ArchitectureDefinition (Business
and Technical)
ImplementationImplementatio
n
ForwardEngineeringForward
Engineering
TCS’ Forward Engineering Tools
(MasterCraft, Infrex, @Test)*
TCS’ Data Migration Tool
(DMT)
Current System Documentation
Stand-alone Projects for Legacy Systems Documentation carried out
Reengineered System
20© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
20
Reverse engineering using TCS
Tools – CasePac and Revine to
document as is business processes
TCS business experts helped in the
optimization of the business processes.
Joint workshops to define requirements
for target application
Web-based 3 Tier Architecture
adopted. Business components
developed using TCS Modelling and
Code Generation Tool – MasterCraft
Program executed in a phased manner
and solution rolled out in 108 locations.
Technology – Java, DB2, CICS
Reverse engineering using TCS
Tools – CasePac and Revine to
document as is business processes
TCS business experts helped in the
optimization of the business processes.
Joint workshops to define requirements
for target application
Web-based 3 Tier Architecture
adopted. Business components
developed using TCS Modelling and
Code Generation Tool – MasterCraft
Program executed in a phased manner
and solution rolled out in 108 locations.
Technology – Java, DB2, CICS
50% reduction in maintenance
effort – flexible, modular system
with externalization of rules from
application code (INFREX)
About 10% efficiency gain for
service representatives in
completing business transactions,
leading to reduced operational costs
Rated as “Better than the best” in
customer satisfaction by J D
Edwards
Detailed system and operations
documentation delivered to aid
ongoing support
50% reduction in maintenance
effort – flexible, modular system
with externalization of rules from
application code (INFREX)
About 10% efficiency gain for
service representatives in
completing business transactions,
leading to reduced operational costs
Rated as “Better than the best” in
customer satisfaction by J D
Edwards
Detailed system and operations
documentation delivered to aid
ongoing support
6 million lines of legacy code in a 30
year old core system with very little
system documentation and few
subject matter experts with knowledge
of the existing business functionality
System inflexible to introduce new
insurance products and regulatory
changes
High operational cost. Several manual
interventions in overall business
processes leading to complicated
implementations
Non availability of skills to support
legacy systems and several failures to
re-create a new application in-house
6 million lines of legacy code in a 30
year old core system with very little
system documentation and few
subject matter experts with knowledge
of the existing business functionality
System inflexible to introduce new
insurance products and regulatory
changes
High operational cost. Several manual
interventions in overall business
processes leading to complicated
implementations
Non availability of skills to support
legacy systems and several failures to
re-create a new application in-house
Fortune 200 Insurance Company. Multi-site (108) implementation. Phased Rollout. 600 PY effort over multiple releases
Business Issue TCS Solution Customer Benefits
Case: Tool Based Re-engineering of a large system
Legacy Application Size 6 Million LOC, Reengineered Application Size - 120 Use Cases, 17 Business Components, 2.7 MLOC of Master Craft generated Code
21© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
21
Sample: Organization Models for Sustaining Vs Disruptive Innovation
Sustaining Innovations or ‘Incremental’ innovations
owned and executed by current organization elements
Use standard measures – immediate impact on Balanced Scorecard Parameters
This runs in ‘Horizon 1’ Today's’ business Focus on efficiency, scale, costs Zero or Low tolerance of failure
‘Horizon 2’ is the bridge between disruptive or
longer-term innovation and the core business
Some failure is expected
Disruptive Innovations – targeting markets and concepts which do not exist today. These are ‘Horizon 3’
Define the Current or Anticipated Market Need being addressed
Identify target customers who will ‘mentor’ the innovation
Fund innovation engines inside and outside to fill the gap
High degree of risk and higher failure rates
Execute, measure effectiveness, scale up, cannibalize for the next cycle
Two distinct Organization Models and Structures are needed – and it is hard to overlay one on the other. The Planning and Execution processes need to be different – but running in parallel.
22© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
22
Sample: Use the Innovation Register as the baseline
1. Improvements to our current offerings and processes
2. Targeted at our current customers3. Across all our current businesses (‘six
bubbles’), executed by Practices
Sustaining Innovation - Derivative 1. Next Generation Development, Maintenance, Product Deployment processes e.g. Model Driven Development, Collaboration and Distributed Development
2. Service Oriented Architectures3. Open Source Computing Models4. Wireless, hand-held, mobile technologies5. Grid Computing, Utility Computing and
Infrastructure Management6. Next Generation Security and Privacy7. Next Generation Reuse - Mighty
1. Radical, breakthrough offerings 2. Targeted at new markets3. Competes against non-consumption4. Could create new businesses5. R&D and the Ecosystem drive this
Disruptive /Breakthrough Innovation
1. Next Generation Internet and Collaboration Technologies including Web 2.0, SaaS models
2. Next Generation Domain Technologies – telecom, life sciences, media / entertainment
3. Next Generation Embedded Technologies4. Next Generation Interfaces including
Voice, Human-Computer Interfaces, Personalization
The Innovation Register is used for resource allocation for innovation. The current business will continue to own the ‘Derivative’ innovation category. The Corporate Technology Office, governs innovation across the ‘platform’ and ‘disruptive’ categories.
1. Next generation offerings and processes2. Targeted at our current markets3. Across all our current businesses (‘six
bubbles’) – Practices and R&D, with the new Ecosystem initiative
Sustaining Innovation - Platform
23© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
23
Summary We have a a framework for innovation and it can help in creating value for
an organizations' ecosystem including clients, partners, employees and shareholders.
The framework has two distinct aspects relating to an organization's business model, processes and market offerings
Innovation which results in incremental and evolutionary changes - sometimes called 'sustaining innovation',
Innovation which results in potentially radical changes - sometimes called 'disruptive' innovation'
The framework has a lifecycle - enabling innovation, evaluating the early results, scaling up and 'productionizing' and finally retiring and replacing.
Organizational mindsets need to be receptive, and necessary support structures are needed - although innovation and process seem like antitheses, one cannot live without the other
24© Tata Consultancy Services Ltd.© Tata Consultancy Services Ltd.
24
Thank You
Q&A...