Is SVM A Barrier To Innovation?

Christopher Andrews

As many readers know, I have a strong interest in understanding the practical realities of innovation and want to help companies define what that "buzzword" means -- what it is, who manages it, and why it's important (see my just-published report on the ecosystem of innovation services providers). 

I believe Sourcing and Vendor Management (SVM) can and should play a critical role in the innovation process. However, my biggest disappointment when I speak to many technology vendors, IT professionals, and business users is when they tell me that they avoid working with SVM when purchasing (or in the cases of vendors, selling) a new technology. Fairly or unfairly, they see SVM's involvement as a bureaucratic stumbling block that will stifle their ability to move quickly or pick the technology vendor they want. For these people, SVM acts as a barrier, not an enabler, of innovation.

I’ve written before that this view is short-sighted: we know that SVM can play a pivotal role in protecting the long-term interests of the organization, SVM is a critical part of the technology purchasing process, and there are plenty of reasons to believe that the power of SVM organizations will only grow in the future.  To some of the more progressive SVM organizations, contributing to businenss innovation is an even more important priority than cutting costs.

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Unscrew Your Light Bulb!

Nigel Fenwick

Unscrew Your LightbulbRollin Ford has one of the toughest CIO jobs on the planet. He leads a global IT team in one of the world’s largest companies by revenue and employees, a company that has earned a reputation for leadership in supply chain that has allowed it to dominate its markets. Yet Wal-Mart is constantly under pressure to maintain its leadership position. In the US, Target has become a fierce competitor, while in the UK, Tesco may have overtaken Wal-Mart in supply-chain leadership, with Tesco's move into the US watched closely by Wal-Mart.

Earlier this year, Ford sat on a CIO panel discussing IT’s role in innovation. His thoughts on innovation also touched on strategy and alignment. He suggested that innovation starts with the customer, then leads into a business strategy, and then it gets enabled by technology. However, he acknowledges, “there are very few secrets out there.” Ford suggests that the only competitive advantage over time is the speed at which your organization can implement and leverage innovative ideas: “Your organization has to embrace change and new technologies, and that becomes your model. It’s about getting from A to B and doing it quicker than everybody else.”

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Understanding The Evolving Ecosystem Of Innovation Service Providers

Christopher Andrews

I recently finished the draft of my report on the ecosystem of innovation services providers.  This report, to be published in July, explores the landscape of companies that are unified by a single purpose:  they are dedicated to helping their clients unleash their own innovation potential.  These are not companies who simply use "innovation" as a marketing buzzword.  Rather, they are dedicated to the discipline of innovation – and bring unique innovation expertise to clients in wide variety of corporate roles. This report builds on much of Forrester’s previous work related to Innovation Networks and Innovation Management, but expands the "ecosystem" to consider all of the companies I interact with that have a distinct innnovation focus.  In the report, I explore the offerings of:

  • Strategy consulting organizations
  • Technology service providers
  • Product management firms
  • Outsourced product development firms
  • Idea management/solution generation companies
  • Other niche service providers (including training program, design firms, and others)

 

I argue that this ecosystem of providers will be an increasingly important part of a comprehensive innovation strategy. However, it will be up to very knowledgeable and “connected” individuals within companies to help manage the diverse players, and connect suppliers to the right role, at the right point in the innovation process.  I also argue that this is an opportunity for SVM professionals who want to play a more strategic role  in their organizations.

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SAPPHIRE NOW 2010 – The Quest For Innovation

Holger Kisker

 

 

 

The Name

This year SAPPHIRE officially changed its name and became SAPPHIRE NOW. Why? Different answers from different people. Those that should know said: "The new name stresses the urgency." Urgency for whom, SAP? And will the next SAPPHIRE be named SAPPHIRE THEN? Never change a successful brand.

The Event

Another premiere for SAPPHIRE was the simultaneous show in Orlando, US and Frankfurt, Germany. With 5,000 attendees in Frankfurt, 10,500 in Orlando and 35,000 online participants, this was the biggest SAPPHIRE event ever. I must admit I was concerned going to Frankfurt while everyone in Walldorf desperately tried to escape to Orlando. Who wants to attend a second-hand event? But now I’m a believer. SAP managed to balance the important parts of the show between Orlando and Frankfurt. Keynotes were held simultaneously in both locations via virtual video connection and speakers in both cities. In general I never had the feeling I would miss anything important in Frankfurt simply because it was the smaller event overall. It didn’t make a difference if I couldn’t attend another 400 presentations in Frankfurt or 800 in Orlando from the total of 1,200+ presentations – I had a packed agenda and got all that I expected and needed, including 1:1 meetings with SAP executives like Jim Snabe. The simultaneous, virtual set-up not only helped to save a lot of cost, it created a sense of a bigger virtual community and underlined SAP’s ambitions for more sustainability. To all that traveled intercontinental: Shame on you, next year stay in your home region!

The Stars

Like every show SAPPHIRE 2010 had its stars as well:

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Forthcoming Report On The Future Of The IT Services Market

Pascal Matzke

A combination of factors is combining to reshape and recast the IT services sector. These factors include the continued weak economic environment, the further development of a global delivery model (GDM), new uses of technology across clients’ go-to-market and supply chain ecosystems, the adoption of cloud and SaaS utility-based pricing and delivery models as well as the adoption of a selective sourcing model by buyers. Forrester asserts that these changes will have a dramatic impact on the make-up and dynamics of the IT services business just as the shift to PCs dramatically changed the minicomputer/hardware market in the late 1980s and early 1990s.

Over the past several weeks my colleague John McCarthy and I have conducted extensive research around the future of the IT services market which forms the basis of our forthcoming major research report to be published in June 2010. We talked to approximately 20 of the leading vendor strategists from both leading service provider organizations as well as other key market players like ISVs, SaaS providers and communication services firms. We now offer interested vendor strategists the unique opportunity to hear from us what the major outcome of the research was and what key implications and recommendations they draw for vendor strategists. For this we have designed a workshop format that will deal with the following key questions:

  • Will the emergence of cloud and SaaS impact the traditional IT services market?
  • When and how will that impact play out?
  • How will the economic slowdown and declining IT budgets impact users’ services spending?
  • What are the key attributes for success in the new services market?

If you are interested in such a workshop (either in person or via web conference) please let us know and we will be happy to schedule according to your needs.

To Understand Innovation, Start By Tracking Innovation Stakeholders

Christopher Andrews

In my recent report, “Contracting for Innovation With Service Providers,” I argue that many sourcing and vendor management professionals have difficulty contracting for innovation, because the term “innovation” itself is elusive and subject to interpretation.

In my research, I note that for sourcing professionals to effectively contract for innovation, they need to be able to understand the business objectives of a broad base of internal innovation stakeholders – and consider whether their service providers can align with these objectives.  In the report, I considered the needs of three primary stakeholders – IT, business, and executive-level stakeholders.

But there are far more innovation stakeholders. After writing that report, I decided to review all of Forrester’s inquiries related to innovation over the past year to see if I could identify other innovation stakeholders.  After a review of about 500 detailed client inquiries about innovation, I’ve compiled a list of categories I have seen.

This list of innovation interests is quite diverse (and this is just a preliminary summary!). But the exercise helps us see how innovation is interpreted differently by different parts of the organization.  With this information, we can identify unique innovation objectives and have a much more informed discussion about what innovation is and how it is generated (eventually leading us to conversations about specific topics like structures, metrics, and goals).  

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How Are Leading Technology Service Providers Bringing Innovation To Clients?

Christopher Andrews

Over the past few months, I had the opportunity to interview representatives from 10 leading technology service providers about how they help their clients innovate.  My recent research summarizing those interviews is available to Forrester clients on our website. For those interested in the high level points I raised, here are a few of the key findings:

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TCS Continues To Build Its Innovation Capabilities

Christopher Andrews

During a recent set of interviews with IT service providers on how they help their client’s innovate, I had the opportunity to speak with K Ananth Krishnan, CTO at Tata Consultancy Services (TCS).  Ananth described to me what I consider to be one most progressive innovation programs I encountered during these interviews – it was consistent with TCS’s capabilities, holistic in scope, and has the potential to be a important part of the company’s long-term evolution.

A few key findings from my discussion with Ananth:

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CIO Job Tenure Rises – Long-term Trend or Fleeting Phase?

Sharyn Leaver

CIO job tenure is now averaging 4.6 years, according to the Society for Information Management.  That’s up – way up -- from the 2-3 year average that we saw just a few years ago. How do you explain the lengthening time in job? Is it just because CIOs are better at their jobs than CEOs or CFOs who have higher churn rates? Probably not.

 

My guess is that the post dot-com bust and post 9/11 recession triggered CIOs to hunker down and be a bit more risk-adverse. They stayed put for a few years, then facing the more recent economic slump, stayed put even longer. They stayed busy doing what they unfortunately are known for -- helping with enterprise cost cutting. More reactive, more cost conscious, and less innovative CIOs are less likely to take risks and less likely to be fired for risk-taking.

 

But I suspect the trend towards longer tenure is rapidly coming to an end. The CIOs I speak with are eagerly waking up to tackle innovation and new investments in 2010. And we’re seeing more and more ex-consultant hot shots and business execs from elsewhere in the company recently hired on to “fix IT” join the CIO ranks. More proactive, innovative, and impactful CIOs are more likely to follow ambitious career paths – or (if your a glass-half-empty kind of guy or girl) get fired for risk-taking.

CSC Sharpens Its Innovation Focus

Christopher Andrews

In my recent interviews with IT services providers on the topic of innovation, one of the key findings was the many different ways in which innovation can be categorized.  Some companies view innovation as simply an extension of their traditional R&D capabilities, others view their innovation as a way to prove their thought leadership, still others view innovation largely as a strategic marketing imperative. Sometimes, it’s a combination of these factors.

One interview that stood out was with Lem Lasher, the Chief Innovation Officer (and Global Business Services President) at CSC, who described to me a deep and holistic approach to transforming CSC’s innovation capabilities.  Three things that stood out at me about Lem’s approach:

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