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Model of Innovation for Organizations

in the IT Software Services Industry

WHITEPAPER

Managing innovation in IT Service organizations is extremely challenging.

This can be attributed to emergent complexities, diverse nature of

projects, speed of obsolescence and changing expectations of global

customers, amongst others. A very effective way to manage innovation in

Service organizations is to split the complexity into People, Processes, and

Technological dimensions.

Dr. Asim Chowdhury

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CONTENTS:

Conten

Introduction ................................................................................................. 2

The innovation landscape in the Product and Services industry .................. 3

The People, Process, Technology Triad ........................................................ 4

Innovation in People .................................................................................... 4

Innovation in Processes ............................................................................... 6

Innovation in Technology ............................................................................. 7

The Innovation Delivery System ................................................................... 8

Conclusion ................................................................................................... 9

INTRODUCTION

Innovation has a much broader scope in the Software service industry today. Unlike the

product industry, innovation in the software services industry is intense, continuous, and

varied in scope. Organizations offering IT services have to manage diverse industry domains,

technological obsolescence, and increased customized needs of its diverse set of customers.

Innovation in such a dynamic environment is not easy and requires the deployment of well-

defined innovation methodologies.

Over the years, the need for innovation in the information technology industry has grown in

leaps and bounds. IT Service companies now realize that their leadership is directly

proportional to their ability to handle innovation. In this whitepaper, I propose a workable

model to manage innovation, by splitting it into three distinct areas of People, Processes and

Technology (PPT). Such structured framing can help manage the complexities of innovation

and deliver effective solutions to global customers.

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THE INNOVATION LANDSCAPE IN THE PRODUCT AND SERVICES INDUSTRY

Over the past one decade, the discourse around innovation has been diverse. Most

technologists perceived innovation as being natural to only product companies. Service

companies, they felt, were less innovation-centered. But, in reality, it is just the reverse.

Innovation is now a cultural phenomenon in the IT industry. Its intensity varies widely

depending on the nature of the industry. In the product industry the road-map of innovation

is staggered (Figure 1), well-defined, and guided towards a definite end. Products lie at the

heart of the existence of product companies. Everything else is less significant.

On the contrary, innovation in IT service companies is continuous (Figure 2) and spreads out

across people, processes and technological dimensions. Here the innovation ecosystem lays

equal importance to people, processes and technology since their existence is dependent on

synergistic function of all three. Service companies function in an unpredictable business

environment and therefore their needs for innovation dependents on a host of factors.

Characteristics of Innovation in IT Services

Employees are more innovation-ready than in product companies

Innovation is continuous and spread across all stages of delivery

Innovation is more agile than in product companies

Figure 1 Figure 2

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THE PEOPLE, PROCESS, TECHNOLOGY TRIAD

In Service organizations, the triad – people, processes and

technologies (PPT) – together encompass its 3600 innovation

landscape. Therefore, a robust innovation in service

companies can only be realized if innovation is segregated

across people, processes, and technologies. Although

independent, these three dimensions are interdependent.

Every aspect of an IT Service company’s functioning is part of

one or all of these three elements of the triad.

The triad is a balanced way to scale the innovation ecosystem

because any other structure would bring undue focus on

technology and undermine people centricity and processes,

all of which are the lifeline in IT Services.

We shall now explore how innovation rolls out across each of these

dimensions, to empower the value chain of innovation.

INNOVATION IN PEOPLE

People innovation relates to all aspects of workforce management. This involves aligning

resources to organizational goals. Innovation in workforce management is an extremely

challenging enterprise because of the social nature of employees. Employees come with

diverse personality traits, mental orientation and aspirations that make it challenging for

organizations to measure and control them.

There are two distinct aspects of innovation in people management. First, organizations

should be able to measure, track and nurture a motivated workforce; and second, they need

to ensure that the workforce is made innovation-ready. Innovation readiness of the workforce

defines the bandwidth and agility of how far organizations can meet future challenges.

People management is a broad area and it can be broken down into smaller manageable

components such as Retention Strategy, Skills Assessment, Growth Charting, and Aspiration

Mapping etc. Each of these can be further broken down to even more granular elements.

Figure 3

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Figure 4: Some areas in which people innovation can take place

Skills Assessment, for instance, can be sub-divided into knowledge retention, speed of

knowledge assimilation, and so on and so forth.

Every area within people innovation should be dealt with meticulously. Let us take the case of

“Aspiration Mapping”. Here we can start by

mapping the aspiration of individual

employees over a period of time. This

aspiration can relate to personal and

professional goals which can provide us a

distinct understanding of how the potential

of individual employees can be harnessed

optimally. By capturing the aspiration of

people organizations can devise ways to

harness and nurture the entrepreneurial

abilities of individual employees.

On a similar note, organizations can also

measure “Employee Motivation” by tracing

everything that motivates or demotivates

individual employees. This could include

measuring diverse aspects such as their

attendance, their willingness to participate

in organizational activities, their response to cultural events, opinion on infrastructure etc.

The data on people aspects can be stored and retrieved so as to provide a wide array of

analytical data on human resource analytics. These analytics can be devised to be generative

so that the system gets enriched with every new set of data. Such people-related analytics can

be used for developing a deeper understanding of myriad aspects of the organization’s people

competency. These analytics can eventually provide real-time information on ways to manage

new projects and also cater to the dynamic changes in processes and technologies.

People Innovation is intricately linked to Process Innovation. In the next section we shall

explore how process innovation actually rolls out.

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Figure 5: Some areas in which process innovation can take

place

INNOVATION IN PROCESSES

Process innovation is a relatively complex

subject because every stage — right from

people management to technology

engineering — contains processes that are

intricately linked to one another. Every small

change in the services industry, technology or

customer expectations mandates that the

processes be modified.

For process innovation the first step is to

gather the experience on processes from

diverse projects. Once fed into a system the

process-related experiential knowledge can

be derived and fed back into existing

processes, so as to make them efficient. This

is a continuous activity and is ingrained into

the very character of service organizations

willing to stay ahead of the race.

Process innovation, therefore, is a continuously shifting goalpost. Organizations can devise

systems to measure efficiency of processes w.r.t. their ability to save costs, shorten delivery

cycle, and embrace new developmental changes. The structure of the process system can be

best defined by process experts so as to meet the goals of the organization.

Innovation in processes is intertwined with changes in the technological landscape. In the next

section we look at the dynamics of technological innovation.

Key Aspects of Process Innovation

Requires continuous mapping of processes

Gets enriched with experiential knowledge

Is unique to organizations and is best defined by process experts

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Figure 6: The technological innovation cycle

INNOVATION IN TECHNOLOGY

Technology is the third component that completes the innovation triad. In terms of

significance many experts opine that technology is the most significant element in service

companies since technological changes drives customers to offshore in the first place.

Processes and people innovation, they feel, align themselves with technological innovation.

But this is just a myopic perspective.

In product companies, technological challenges are

well-defined and known beforehand. Service

companies have no such luxury and have to deal with

a plethora of technological challenges as and when

they appear.

Speed is the fundamental cornerstone in

technological innovation. Technological leadership

therefore is vested on the speed at which

technologies are learnt, adopted, implemented and

extended. It is this speed of adoption that

distinguishes ordinary service players from

extraordinary ones.

Like people and processes, the technological roadmap and the possible innovation should be

managed through a very structured system. IT Service players should devise techniques and

systems to scan the technological landscape and prepare a readiness matrix for all current and

future technological challenges. All the collective knowledge gathered through experience and

market intelligence should then be fed into a system. This system, when fed with collective

knowledge, in turn, will help gather rich analytics on the organization’s technological

competency. It will provide ready understanding on the entire technological landscape and

empower organizations to meet emergent challenges in the IT Services space.

Some Techniques of Scanning the Technological Landscape

Map existing projects in the organization

Gather customer’s feedback and insights on competitor’s technology

Technology Seminars and Events

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Figure 6: How the Centralized innovation delivery system works

THE INNOVATION DELIVERY SYSTEM

All the three innovation systems related to People, Processes and Technology finally converge

into a centralized innovation delivery system. This system assimilate knowledge from all the

three systems and delivers Just-In-Time innovation-centric analytical information. This

information helps organizations for new customer projects or to meet the challenges of the

future. In doing so, the system takes into account the distinct complexities of IT services such

as hybrid offshoring and global delivery needs.

How does the innovation delivery system work? The analytics gathered on people, processes

and technologies amalgamate and forms a rich innovation repository. When customers

approach service companies for projects that carry new dimensions and contexts, the

innovation repository serves as a ready reference and provides them with rich analytics on its

innovation in the People, Process, and Technology triad.

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The innovation system can be an emergent artifact, which means that it constantly evolves

with time. The real-time analytical information helps to cut down on time lags and also serves

as a ready reference for sustaining the organization’s engineering excellence, quality

improvements, and swift assimilation and deployment of new knowledge.

Managing such a holistic innovation system requires organizations to invest in specialized and

dedicated teams. Such teams can guarantee the innovative-readiness of organizations and

ensure that the collective knowledge does not go waste; but contributes to the overall growth

of organizational leadership.

CONCLUSION:

Innovation is central to organizations operating in the IT Services space. In an increasingly

competitive marketplace, it is only through innovation that IT Service organizations can stay

afloat, remain significant, and future-ready. However, despite its significance, sustaining

innovation in IT Services is not an easy task. It requires more than just the will to innovate.

Service companies can ensure innovation-readiness by delineating innovation across the

People, Processes and Technology (PPT) triad. Information on each of these areas can be

gathered in respective systems. The knowledge assimilated in these three areas can be

collated in a centralized ‘Innovation Delivery System’. This centralized system can serve as an

engine and provide rich, real-time analytics, to help organizations deliver innovative solutions

to its global customers.

A structured approach to innovation can help organizations to effectively manage the

challenges of technological obsolescence and other emergent project-centric complexities.

Embracing such a holistic innovation framework is a compulsion for organizations today, if

they wish to take on the challenges of tomorrow.

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ABOUT THE AUTHOR:

Asim Chowdhury is the Global Head of Marketing and Communication of the R Systems Group. He has more than 15 years of experience in marketing, communications, business strategy, journalism, and research. Asim earned a Ph.D from the Delhi School of Economics, Delhi University, and has also been a European Union research scholar under the Indo-European research program.

ABOUT R SYSTEMS

R Systems is a leading OPD and IT Services company, which caters to Fortune 1000, Government, and Mid-sized organizations,

worldwide. The company is hailed as an industry leader with some of the world’s highest quality standards, including SEI CMMI Level 5,

PCMM Level 5, ISO 9001:2008, and ISO 27001:2005 certifications. With a rich legacy spread over two decades, we generate value that

helps organizations transcend to higher levels of efficiency and growth. Quite like the Oyster delivering the Pearl.

For more information, visit www.rsystems.com

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