In 2011, Forrester first reported on a new breed of mature and collaborative product development services (PDS) offerings coming to market, which we called “product development services 2.0.” These services are a stark contrast to traditional staff augmentation engagements. How are they different? Providers take greater responsibility for the end-to-end life cycle of the product, promise a higher level of industry and domain expertise, and offer a value-add service addressing key client business concerns. The transition has been gradual up to now, but there are finally signs of a more rapid shift.
One of the key announcements made in recent months was HCL’s launch of its “Service Line Unit” (SLU) initiative. Here are the key elements of this initiative:
•SLUs are a packaged set of PDS offerings, bringing together relevant HCL tools, partnerships, processes, and delivery competencies to address specific pain points.
•In developing these offerings, HCL systematically investigated the white space and the key business challenges in its chosen target markets. In turn, it invested in building out its own IP and domain knowledge to address these challenges.
•Ultimately, these investments and the targeting of specific business concerns will help HCL frame its service offerings in the context of key business outcomes, such as time-to-market.
What typically happens when one approaches 40? Major mid-life crisis? Life transformation? Yeah, something like that...
Well, apparently tech vendors are no different. Back in 2010 with 40 rapidly approaching, SAP undertook a broad new innovation strategy with an executive mandate for intellectual renewal. The goal was to transform the company through innovation – innovation that would reach billions of new users and humanize the brand through consumer app development. What?! SAP, a consumer app company. Yes, observing market trends of consumerization and the rise of “shadow IT” (technology purchases outside of the IT department), SAP recognized the need to expand its audience and improve its user experience.
They began with three questions:
How can we create applications that can potentially reach millions of users?
How can we design, build, and release these apps in 90 days?
How can we scale this to successfully deliver large volumes of these apps?
I attended Google’s annual atmosphere road show recently, an event aimed at presenting solutions for business customers. The main points I took away were:
Google’s “mosaic” approach to portfolio development offers tremendous potential. Google has comprehensive offerings covering communications and collaboration solutions (Gmail, Google Plus), contextualized services (Maps, Compute Engine), application development (App Engine), discovery and archiving (Search, Vault), and access tools to information and entertainment (Nexus range, Chromebook/Chromebox).
Google’s approach to innovation sets an industry benchmark. Google is going for 10x innovation, rather than the typical industry approach of pursuing 10% incremental improvements. Compared with its peers, this “moonshot” approach is unorthodox. However, moonshot innovation constitutes a cornerstone of Google’s competitive advantage. It requires Google’s team to think outside established norms. One part of its innovation drive encourages staff to spend 20% of their work time outside their day-to-day tasks. Google is a rare species of company in that it does not see failure if experiments don’t work out. Google cuts the losses, looks at the lessons learned — and employees move on to new projects.
As businesses work to differentiate their products or services, grow the bottom line, and expand globally, they need to think seriously about the important role that their employees play in helping the business achieve successful outcomes. Businesses must invest in processes and technology to recruit and onboard the best people, address performance gaps with key learning activities, provide career development plans, and align pay with performance. Activities like human resource management (HRM) deployment in the cloud and the use of mobile and social technologies for HRM processes catapult HR to the cutting edge of innovation.
Ten days ago, three of us traveled to Japan for a Fujitsu analyst day held in conjunction with the firm’s huge customer event – the Fujitsu Forum. The analyst day was a follow-on from the firm’s European event last fall. At the two events, the management team, led by Masami Yamamoto, president and representative director, and Rod Vawdrey, the president of Fujitsu’s International Business, talked about the organization’s vision and key imperatives:
Creating a common vision around “Human-Centric Intelligent Society.” Management highlighted publishing the firm’s global vision document. Speakers repeatedly pointed toward Fujitsu’s new “human-centric” vision for how information technology improves business, personal, and societal outcomes. Fujitsu is positioning itself as a provider of solutions aimed at facilitating the activities of consumers and businesses, combining elements of its hardware, software, and services portfolio.
It’s (long past) time to put the era of One Size Fits All enterprise computing behind us. Providing workers with Standard Issue™ devices and software represents an antiquated paradigm. Instead, segmenting your workforce into different classes of workers – honoring the needs of each type of worker – can help you:
Save money. Overinvesting in computing power by giving a worker “too much machine” and over-investing in software licenses for applications that won’t be used are common implications of One Size Fits All enterprise computing. You can save money by provisioning appropriate hardware and software to various classes of workers.
Preempt BYO. While IT departments are coming around to the virtues and values of BYO, managing excessively diverse BYO comes with management costs. You can preempt some types of BYO by providing the right tool to the right worker at the right time… obviating the need for them to bring their own.
Drive worker productivity and innovation. Innovations like tablets and Chromebooks can empower certain classes of workers to achieve new levels of productivity. Providing the right worker – for example, a traveling salesperson – with a tablet can enable new scenarios and create tangible returns.
The continued economic viability of software development in India, whether by independent software vendors (ISVs) or “captive” business units, depends less on pure labor arbitrage and more on delivering time-to-market advantage for clients. The pressure of meeting business expectations demands that software firms harness creative capability wherever they can find it. The increased focus on Business Technology innovation and customer experience over mere cost savings presents both a threat and an opportunity to software configuration and development business units (BUs) in India.This is the key finding from my just-published report.
Forrester developed its software innovation assessment workbook to assess software innovation capability of firms. We provided this tool to members of NASSCOM (the industry association for the IT BPO sector in India), comprising both ISVs and captive development BUs in India, and surveyed them to assess the most important process, organizational, cultural, geographical, and staffing practices that promote software innovation. We also interviewed a dozen selected respondents in greater depth to better understand how innovation capability contributes to business success in India. We found evidence of widespread adoption of the practices correlated with software innovation capability, helping to drive a rapidly changing role for Indian business in the global software supply chain.
Innovators in India that were engaged in software development and configuration received high scores for many of the practices that drive effective innovation. They demonstrated strength in:
Listening to the voice of the customer
Making the development process more iterative and responsive
Organizations in growth markets across Asia have not traditionally been heavy consumers of outsourcing services. Having lots of on-premises hardware still carries some prestige for local CIOs, particularly in China and India. The availability of relatively inexpensive IT staff in local markets has also helped them deliver acceptable service levels to the business. Until now, that is. The combination of quickly rising IT salaries, increased competition from regional and even global expansion, and growing demands among business stakeholders to more effectively engage customers has put pressure on CIOs to increase the performance of their organizations.
More and more CIOs I speak with are struggling with how best to effectively transform their IT capabilities and meet fast-changing business requirements. In particular, whether to embark on this transformation journey alone or leverage outsourcing partners. In a recent report, I profiled organizations in Asia that are leveraging external service providers to accelerate their IT maturation. One example is a manufacturer with 10,000 employees and operations across Asia that outsourced its entire IT infrastructure environment to improve and homogenize service levels. Another is a large Indian bank that outsourced its entire IT department to a service provider and improved its maturity level from a 3 (on a scale from 1 to 10) to a 6 in less than a year.
The Renaissance was possible because of dissemination of ideas from the later 15th century. The availability of paper and the subsequent invention of the printing press in 1445 forever changed the lives of people in Europe and, eventually, all over the world. Previously, bookmaking entailed copying all the words and illustrations by hand, often onto parchment or animal skin. The labor that went into creating books made each one very expensive to make and acquire. The advent of the printing press helped produce books better, faster, and cheaper and led to disruptive cultural revolution.
We are experiencing a very similar phenomenon today. We are in the midst of digital disruption. The printing press of our time is platforms such as social, mobile, cloud and analytics that help propagate value to our customers better, faster and more cheaply than previously available options. So whether you are on board or not, this disruption is taking place; the two choices you have are: become a disruptive CIO or be disrupted.
If you read my blog regularly, it should come as no surprise that I am an ardent fan of using mobile devices — whether mobile phones or tablets — for market research purposes. I have discussed how consumers are already forcing our hand into the world of mobile and that market insights professionals are not conducting mobile market research but instead are conducting market research in a mobile world.
Given this, I was both delighted and dismayed when attending this year’s ARF Re:think 2013 conference. Why was I delighted? There was a marked increase in the number of talks that focused on the role mobile plays — whether as a research technique or how it plays a significant role in consumers’ lives. Of just the talks I attended, which were a lot, almost 60% of them discussed the role of mobile. And a lot of these “mobile” talks were in the main track session. Talking with colleagues who attended last year, it’s clear that mobile has definitely moved front of mind compared with ARF Re:think 2012.
But I was dismayed that it was still just talk, talk, talk. At the conference, I was surrounded by tablets and smartphones, and people were using them all the time. And while we’re living this mobile life, we’re listening to speeches telling us how we need to start thinking about the role of mobile. Dare I say that we need to do a bit more than just thinking at this point in the game? We clearly have to get our act together soon.