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BriefingNotes

MindtreeFusesDesignThinkingviaIts“DigitalPumpkin”1920PGIAugust25,2016AshishChaturvediJanErikAase

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August 25, 2016 Ashish Chaturvedi

Jan Erik Aase

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Briefing Notes – Mindtree Fuses DesignThinking via Its “Digital Pumpkin”Summary

Recently, ISG analysts spent a day in Bangalore with senior leaders from Mindtree. The main purpose of the

meeting was to take a closer look at Mindtree’s “Digital Pumpkin” innovation team and operations, which

Mindtree believes is a key differentiator in its pursuit of digital innovation for enterprise clients. Mindtree has

instilled a “design thinking” approach in the minds of its employees and seeks to extend that to include

enterprise clients, including the desire to collaborate with clients and leverage what they bring to the table.

Key Takeaways: ISG believes that Mindtree’s overall strategy and focus provides a strong position in client

engagements on digital transformation. The Digital Pumpkin can be a Mindtree advantage for now, but

competitors are pursuing similar models.

Briefing Notes

Mindtree’s Digital Pumpkin is an innovation workspace inside the company’s Bangalore facility. The name

symbolizes the shape of the workspace itself, the shape of the building, and exemplifies the concept of working

collaboratively and in new ways inside a unique type of space to make digital real. It is the execution of the

concept that Mindtree is hoping will enable some impressive collaboration among the “pumpkin people,” i.e., the

digital innovation team, vertical and horizontal thought leaders, the account management teams, and their

clients.

The core of the concept is enabling and building from digital innovation and resulting disruption in clients’

enterprise business. Digital business has been the cornerstone of Mindtree’s positioning and offerings,

beginning with Assortment Planning Excellence, a sales analytics platform and Decision Moments, a data

analytics platform. As of this writing, 38% of Mindtree’s $715M annual revenue comes from digital projects,

with more than 5,600 employees (one-third of their total strength) engaged in Mindtree’s digital go-to-market

work. The largest portion of this work to date has been in packaged development specific to digital solutions;

only a fraction of its revenue coming from legacy software integration. Mindtree leaders refer to this as the

“digitally born” nature and heritage of the firm.

Mindtree’s approach is comprised of six steps, as follows:

Separate the business solution from the technology. We see this approach gaining favor with our1.

enterprise and services provider clients very rapidly. It helps to eliminate the inefficiencies and costs of

developing “solutions in search of problems.” It also helps to re-use or repurpose elements of solutions

from one market or process to another, leveraging and extending the value of multiple solutions at less

cost to Mindtree and to its clients. However, it does require more investment in dedicated business

systems/process expertise.

Base the approach and the solution on how the client is defining its business problems. While there2.

will be substantial potential for re-use of previously engineered solutions, there will also be

opportunities to look at business problems in different contexts from different perspectives.

Foster “limitless ideation” in order to produce ‘n’ possible solutions. In other words, don’t initially look3.

for A solution or THE Approach the problem or the need from as many angles as is possible and

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pragmatic. The results can then more readily include solutions for other needs (possibly in other markets)

as well.

The client is the key, through their active participation and prioritization of the best idea(s). It seems4.

that having the client help to determine what will work for their needs should be part of every

engagement, especially one as strategic as digital transformation. Yet, we find too many traditional firms

still limiting direct client input. That being said, in our experience, the “customer is always right”

approach only works when guided and facilitated by experienced SMEs. As with “limitless ideation,” there

do need to be some limits – with flex It is expensive to chase a dozen ideas.

Leverage prototyping of the selected idea(s). This is another part of the process that seems like a “no5.

brainer,” and yet is still ignored by too many services providers and consulting firms. We do of course see

PoCs and limited trials everywhere, but relatively few begin with an idea that is built around direct client

input, vetted with client involvement, and then leveraged across multiple areas of the enterprise.

Determine and then utilize the most effective technologies to execute and test the prototype. In6.

short, a “one size fits all” or “we always do it this way” approach is not what Mindtree promotes. Of

course, this might require re-engineering efforts to make the solution efficiently workable.

ISG believes that these six steps align very closely with the principles of Design Thinking, which we see as a key

enabler for digital innovation and business transformation. Additional aspects of Mindtree’s overall Digital

Pumpkin approach include the following:

Leveraging solution prototypes across industries. Digital Pumpkin is promoted as a collaboration

center where industry vertical teams within Mindtree identify solutions developed for one industry that

can be leveraged across others. One example discussed was that of a mobile customer service solution

developed for a global car rental agency, which was leveraged to help eliminate queue hassles for a retail

client’s billing desk.

Putting skin in the game. Mindtree has made significant internal investments to develop workable

prototype models that are in turn capable of solving complex digital business problems of key

Proactive approach to problem solving. Mindtree sales staff and senior leaders are an active source for

reporting industry challenges back to the Digital Pumpkin team, which then comes up with prototypes.

The prototypes are then shared with enterprise clients.

Further insight on Mindtree’s efforts was provided by Harvey Gluckman, Partner and Head of the Retail vertical

at ISG, who frequently sees Mindtree within client organizations: “[Mindtree] clearly demonstrate Design

Thinking approaches through use-cases and other examples; we see them using this to bring business value to

their clients.” US-based ISG Director Bill Shoemaker notes from additional client experiences that “The

Mindtree team [has been] passionate” regarding service delivery, including “leveraging innovative ways to

improve on the delivery of services to their clients.”

Net Impact

We believe that Mindtree’s Digital Pumpkin concept and approach are very workable, very useful, and likely a

very large investment for Mindtree. At this point in the IT industry, what Mindtree is doing with the Digital

Pumpkin is a differentiator. They are by no means the only firm pursuing such an approach or utilizing such

tactics, but the coordinated and coalesced manner in which it is managed and delivered is compelling, and could

act as a model for other firms. What is keeping all competitive firms from pursuing similar approaches are

culture, money, business models, and time. As businesses change and the provider side of the industry

accelerates, each of these inhibitors will fade more rapidly, and Mindtree will find more direct competition.

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Meanwhile, as noted above, not every Mindtree client is taking advantage of the Digital Pumpkin approach.

Most are likely not aware of the business improvements available, or are concerned about the costs of, digital

transformation. Clients working with Mindtree should be aware of what other clients have accomplished, and

look for applicability to their own business needs.

Mindtree has to also demonstrate (and generate) additional trust and belief in the Digital Pumpkin. That begins

by getting more visible with its efforts to increase the reach of the proposition to global clients, and tying

engagement results to Mindtree’s compensation for those engagements. The company is making progress on the

latter. Mindtree shared with ISG that in more and more cases, they have linking engagement compensation with

Business Level Agreements (BLAs), which utilize a variety of metrics to evaluate their digital efforts. ISG sees

business-outcome-based pricing mechanisms becoming the de facto approach for digital projects very quickly.

Summary Facts

Mindtree Limited is headquartered in Bangalore, India

Company annual revenue for FY 2015-16 was $715 million and employees around 17,000 employees

globally

Core portfolio includes e-commerce, marketing, cloud computing, digital transformation services, data

analytics, application development

Core markets include the US and Europe contributing 65% and 25% in revenue respectively. It has 42

offices in 17 countries.

Key competitors include Infosys, Wipro, HCL, Capgemini, Atos, Accenture, IBM

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