Mahindra Satyam to grow through “Innovation” by Rajesh Korani

In a recent interview, Mr Anand Mahindra stated that Mahindra Satyam would grow basis “Innovation”. I would strongly endorse this statement, at least for M&M Group, because in the recent past the brand has truly lived up to the brand promise of “Rise”. The recent blockbuster product, Mahindra XUV 500, from Mahindra auto division really raises the expectation levels from M&M Group and I’m sure the brand is working hard to bring innovation in every ‘product, service and possibilities’ (reference www.mahindra.com).

In most of the cases, the companies use the word ‘innovation’ as the key differentiator or strategy for the growth. I’m hesitant if most of the companies (barring few) have the bandwidth and resources to drive innovation. I’ve huge dissonance as in most of the cases the word is used loosely. In this article I’d evince the difference in four key strategic pillars i.e. Invention, Innovation, first movers advantage and fast market response through some examples.

Let us loot at the dictionary definition of these four key pillars

Invention: An invention is a unique or novel device, method, composition or process. It may also be an improvement upon a machine or product, or alternate means of achieving a process

Innovation: Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are readily available to markets, governments, and society

First mover’s advantage: Well, there is no dictionary definition for First Movers Advantage. I’m sure all of us would know that it is a first move, method, composition or process in the existing category.

Faster market response:  As the terminology defines, it is how quickly you react to the market

Innovation differs from invention .Innovation refers to the use of a better and, as a result, novel idea or method, whereas invention refers more directly to the creation of the idea or method itself. Innovation refers to the notion of doing something different (Latin. Innovare: "to change") rather than doing the same thing better. The above example from Mahindra is a perfect fit as Mahindra Satyam would grow through innovation by improving the processes and services.

We all know some of the world’s greatest inventions and don’t need many examples to manifest the terminology. E.g. Telephone (there were several inventors who did pioneering experimental work on voice transmission over a wire and improved on each other's ideas. Innocenzo Manzetti, Antonio Meucci, Johann Philipp Reis, Elisha Gray, Alexander Graham Bell, and Thomas Edison, among others, have all been credited with pioneering work on the telephone. An undisputed fact is that Alexander Graham Bell was the first to be awarded a patent for the electric telephone) or similarly, invention of Mobile Phone was by Dr. Martin Cooper (Lead researcher at Motorola, CEO & founder of ArrayComm and Chairman & co-founder of Dyna LLC)

It is interesting to know that invention of mobile phone led a convenient and distant communication and now innovation (multiple innovations) has made this small device as part of our daily lives. Imagine a single day without mobile phone…phew!  

Being an inventor, Motorola lost the opportunity to encash the mobile invention. However, Nokia with technology leverage and strong marketing strategies got the first mover advantage in the mobile phone business with dominant market share and volumes.

The smart move was by Apple and Samsung through smart phones. The faster market response from these two brands led them control the penetration of smart phones thus replacing market leader Nokia and others.

There is a thin line between Invention, innovation, First mover advantage and faster market response because all these strategies demands different approach developed through existing elements.

It would be very interesting to see what strategy Mahindra Satyam is going to adopt to fuel the growth on their IT business. Eagerly waiting for an “Innovation”

 

Indian IT Industry to “Cruise in the higher orbit” by Rajesh Korani

A recent article in The Times of India by Mr Mohandas Pai (Chairman of Aarin Capital Partners & Manipal Universal Learning & former director and head of Human Resources at Infosys Ltd) about shrinking profitability of Indian IT companies and an option of going up in the value chain triggers an alarming bell for the industry.  Among Indian IT companies, Infosys enjoys highest per employee net profitability i.e. US $ 11400 per employee and stands at second position (IBM enjoys highest per employee net profitability i.e. US $ 36586). But the current situation definitely invites proactive   call-for-action if the desire is to incessantly enjoy the similar growth & profitability. 

In India, IT industry is considered as one of the most aspirational industry amongst youngsters for career option. However, companies in USA, UK and Europe those who are outsourcing Technology implementation jobs to India, ponders it as a hub of talented manpower at low cost. I’m not refuting the fact that Indian IT companies journeyed a long way in the last two decades to emerge as technology partners from low cost IT vendor. But the perception has still not changed in the source countries. Global IT & Consulting companies like Accenture have already established full-fledged development centres in India and are in the league to execute technology implementation jobs from here. This surely upsurges the problem for Indian IT companies to revisit their business strategy, because Accenture’s strong positioning of business consultant gives them an edge vis-à-vis Indian IT companies. They have the bandwidth, expertise and proven legacy of taking up high level consulting & technology projects and now with Indian offshore office it brings low cost implementation capability and strengths as well. 

So what it means when Mr Pai says “Going up in the value chain”?

What I derive from this statement is that Indian IT companies should elevate their brand perception to get into the territory of ‘CEOs’ i.e. become "Strategic partner for business growth". They should continue maintaining the relationship with the CIOs, but the brand perception and recommendation should flow from top-to-bottom and not vice-versa. It is obvious that elevation towards the customers’ business solution will provide an edge to Indian IT companies. In fact it’ll be a value addition for better image and better earning. The technology implementation jobs will continue to follow once Indian IT companies are comfortable in CEOs territory. It’ll also enable clients to be highly dependable on these companies and look at them as single stop solution and sole advisory partner for business growth through business consulting and technology implementation.

If this is the objective then the task for Indian IT companies become little challenging. They need to work hard to bring in-depth understanding of client’s industry, business growth drivers, challenges and anticipate the future trends which would help the customers to think and act ahead of time.  Indian IT companies need to invest in highly talented and diverse human capital, build the global team from diverse culture & multiple ethnicities which can bring large years of industry’s strategic & operational experience and can collaborate with the technology expertise to develop industry specific and customised solutions for the clients’ business growth. They need to share and implement best practices across the globe to create global image with local implementation capabilities.

What role Branding has to play here? Brand custodians will have a challenging job to position the brand on a “Thought Leadership” platform. They have to create a marketing story on the global experience and industry expertise. They need to align the brand with the culture and professional context of every country, wherever the brand has presence. They need to develop strategic communication plan that is coherent, contemporary, culturally aligned along with industry specific insights and business cues. Accenture has mastered the communication in this sector. Their brand positioning “High Performance. Delivered” is manifested not only in the communication (Refer Image) but at each & every touch point of the brand. 

Indian IT companies must wake-up to the situation, if not already. They have grown excellently in the demand led market, now it’s the time to create a strong business delivery expertise and brand excellence “To cruise in the Higher Orbit”