'Innovation Should Add Value At The End Of Process'

Innovation has become the keyword for organisations to survive during the current times of recession. Oscar D’Souza, professor, Information Management, S P Jain Institute, gives an entirely different view on what innovation can mean to an organisation and how organisations can explore it.

What does innovation mean during recession?

Innovation comes from the Latin word ‘innovatus’, which means to renew. This renewal at the end of the process must involve value creation. If it does not involve value creation then it is just an invention. The more value one gets at the end of the process, the better is the innovation. Indian companies in the past have leveraged cost and cost arbitrage. There was little innovation involved. Later, they started to leverage quality.

Presently, we have reached a stage where the annual revenue per employee, especially in IT/ ITeS and BPO is flattening out. In order for us to go the next level, we need to look at areas where we have not looked before. RIM (Remote Infrastructure Management) is a huge opportunity for Indian companies as we are good at that. Also, we have the potential to ramp up and scale up the opportunities available.

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The other area where a mark can be made is media, where there are really few players. Another area is Enterprise Systems Implementation. Indian organisations can also leverage delivery, which is one of their major strengths.

Should companies innovate the process or the structure?

There are two ways of doing it. One way is to change the organisation internally and innovate the working environment. For a smaller company, that is the better way to adopt. There is also a discipline, which has to be incorporated in the innovation process. The work environment should let creative ideas proliferate but one cannot let these ideas run rampant. Therefore, very early in the game, we need to know which of those creative ideas can be converted into cash. Innovation comes early in smaller organisations as people are free to think and not bound by too many constraints. They have an extremely critical role to play in the whole ecosystem.

How can organisations go in for effective innovation?

One way is to have a lot of discipline in executing innovation. At every stage, there should be checks and balances so that bad ideas are cut off. The critical difference between innovation and invention is value. An invention can be very creative but may not have any commercial value. The process of converting creative idea into cash is really innovation.

Which technologies are going to drive innovation in 2009?

Disruptive technologies are going to be a great driving force in 2009. One of these is SOA (service oriented architecture) and the other is SaaS (Software-as-a-Service). Any new technology starts at a very low level and then starts moving up very rapidly. There are several companies, which now have entire business models built around SaaS. SOA is a framework wherein you can inter-work different components of different companies together.

Also, innovation can be at various levels. One could be at the technology level and the other could be at the business model level. We also need to see more vendors supporting rather than resisting new technologies as more often than not vendors like the customer to operate in only one environment, which is their environment.