Next Wave Strategy for Indian IT Industry

I felt honoured to be a part of the panel discussions on Indian IT Industry at Communique 12 organized by Symbiosis in Pune. http://www.sitm.ac.in/International_tele_seminar_Communique.asp

The viewpoints put forth by me covered how Indian IT can move towards a product based model as opposed to a people based revenue model, challenges to Innovation and opportunities for diversification.

Moving towards a Product oriented model

• We can take some lessons from what made the services model such a huge success for Indian IT Industry
• It was no doubt a perfect example of private initiative backed by government policy which made IT in India a priority sector
• IT in India is engaged in the services model by design since the IT policy in the mid-1980s stressed on Electronics and Software as a solution for unemployment
• That policy definitely succeeded as we see the number of people in India today employed in this sector with education institutes churning out almost 400k candidates in the market every year
• There are indeed IT companies in US one example which comes to mind which generate $700 mn revenues with less than 50 people
• This model may not be suitable for India. It may be great for one or two companies but in the larger national interest of serving the lowest of the low, the utility of this model in really helping India raises more questions than it answers.
• Putting the social aspects aside, let us see how do we make this model work for moving to a product based model
• There are several challenges which have prevented this model from being adopted so far
• We are often found lacking in India in terms of facilities and infrastructure required to encourage product based model
• It is indeed easier for me, sitting here in India, to register a company in Delaware US and get a server procured and installed in a US data center rather than India
• Existing product expertise is sitting on foreign shores. Indian IT has excelled in the routine, but when it comes to core product architecture issues we need to depend on outside expertise
• No doubt Indian IT has resourceful manpower. This manpower is dedicated and career oriented and has a focus on self development.
• But this mindset may not augur well for innovation and product creation. To innovate you need a maverick and not a career climber
• From a policy point of view, we need to encourage this product expertise to come and reside in India. Existing product innovators among organizations should feel encouraged to set up India based Product Innovation and Development Centers. Mind you, not just Offshore Development Centers where you hire code jockeys while retaining the architecture skill set in home country but Product Innovation and Development Centers where product is created from the ground up in India
• In order to get the government think tank on the job of how to make India a home for Product Innovation and Development, they must be made to see what is in it for India. Industry need to go back with the answer on how does becoming a product development center instead of a services based industry which generates employment for millions, really favor India?
• This thinking about Indian interests has to become foremost for Indian IT industry which can then result in directional changes in policy to make product based model a success as the services based model has done.

Innovation

• We touched upon the manpower resourcefulness and mindsets required for innovation.
• For innovation to succeed there has to be a tolerance for failure (1/3000 ideas are successful)
• India is a nation in a hurry. We are playing catch up with the rest of the world. We feel that 40 years of socialism has left us behind. What we are seeing happening in society today is an acknowledgement of the existence of a better way of life and an awakening and a revolution of the masses towards the need for a better life.
• In this social milieu of speed and change, we have to see where innovation fits in. Innovation cannot exist by itself. Innovation has to fulfill a need. Innovation is made successful not by the innovator but by the users.
• For organization be innovative, we have to realize that innovative organizations are made up of innovative individuals. While the organization can provide a platform for individuals to innovate, it can also result in shackles for innovation.
• Organizational innovation programs are often linked to corporate imperatives plans, markets for growth. There is limited scope for a philanthropic approach to innovation within organizations.
• Individuals can also be organized. Individuals can be agile. Individuals can be innovative. Most innovation comes out of garages rather than corporate R&D labs.
• What organizations can do is provide a platform for innovation. They cannot attempt to control innovation and can perhaps channelize innovation by setting up the right environment, posing the right questions, encouraging risk taking thus empowering the innovators.
• Organizations can ENABLE while leaving it to individuals to ENACT
• Organizations also need to think in terms of what are the right measures for innovation - investment and resources spent or ideas nurtured, patents filed.

Diversification and geographical growth

• I will acknowledge the work of Prof Rupa Chanda from IIM-B for the next section where I pick up three themes for diversification, very roundly covered in her article - US protectionism - An opportunity in disguise? http://www.iimb.ernet.in/newsletter/issues/97
• The need for diversification comes from saturation of existing markets, economic slowdown and protectionist measures adopted by countries. The situation described for the US applies as well for any other countries adopting such measures
• Market diversification
• Indian IT industry is largely an exports based country and there is a definite need for diversification, competitiveness and exploring new areas of growth.
• Indian domestic market is largely ignored, even though Indian economy is seeing comfortable levels of growth as compared to other markets.
• Foreign investment in India is on the rise because of the opportunities here in India. What about Indian IT investment in India? The investment here has to be for market creation and market growth. Margins similar to those earned for exports cannot be a key focus in Indian markets.
• Local presence in target markets
• Local employment creation in the markets that IT industry operates in should be made a key priority. For sure, countries where Indian IT industry is seeking to create a market would welcome them if they are seen to be solving unemployment problems of those markets.
• As contributors to the local economy, the industry will also gain in lobbying strength
• Government support in foreign policy
• Government can help in creating a safe environment for Indian IT industry and Indian professionals in the markets they operate in.
• There is a need for engaging with these countries at diplomatic levels to ease the entry of Indian IT industry and preempt any protectionist views.
• Just like in the success of services model, private and government initiative and partnership can go a long way in influencing and investing in bi-lateral and multi-lateral commercial agreements
• Lastly the focus of industry can be turned towards Nation Building within India - there are indeed opportunities in e-governance, e-auctions, e-learning which can be explored towards achieving the goals of sustenance, growth and national benefit.

What does the customer do?

Outward looking organizations
Implementation of processes including completely internal facing process are ultimately to serve our customer. To achieve this end goal of serving end customers, the process has to in some way enhance efficiency or result in productivity, which would enable the organization to serve the customer better. Today the customer also expects a quicker turn around time on services. There is a pressure on prices and margins in almost every competitive industry, hence these efficiency and productivity gains are also expected to result in better pricing points for the customer. Faster, better, cheaper anyone?

Is this enough?
So, organizations have traditionally been 'outward looking' in setting themselves up in terms of people, process and system. However, is it sufficient to be termed outward looking? Should we not also be concerned about what kind of outside view are we tuned towards? The direction of this outward looking view or the fine-tuning of how well acquainted we are with our customers needs should be of prime interest.

What we are saying here is that while we did have an outside-in view in the organization's activities, we had been designing these processes, systems and structures thinking 'what do we want to do for our customer' rather than 'what does the customer want to do (period)'.

Not 'what the customer wants us to do'. Not 'what the customer wants to do with our products and services'. Not even 'what the cutomer wants to do on our e-biz site'. No No and yet again an emphatic No.

Just plain and simple 'what does the customer want to do (period)'.

In order to discover what the customer wants to do, we have to, of course, study - what does the customer do? It has to become our business to know the customer's business. And I am talking both B2B as well as B2C here.
As an airline I have to think, as a individual or corporate customer, when planning to go from point A to point B, what would be the expectation in terms of safety, comfort and convenience. What experiences would I value  most? This goes beyond the ease of ticketing and check-ins.
As an electronics retailer, I would need to think beyond how do I serve the individual and corporate customer better in terms of ordering, delivery, billing. I need to go into the territory of why the customer is buying what he is buying. What will she do with this device? Am I helping the customer make the right choice best suited for his needs?

Any examples or comments that spring to mind?

Futility of consensus

Trying to achieve consensus in corporate decision making is often somewhat like Waiting for Godot. Consensus by default means a group has together decided to take certain actions. This often gets translated as 'organization policy' or 'management decision' and thus it is difficult to find an owner responsible for the same. Often people seem to seek consensus when they are not confident enough to take decisions on their own. It is also an effective tool for delaying certain decisions.

Building consensus takes huge efforts, time and patience. There are conflicting interests to navigate and people's knowledge levels and skills are sometimes questionable to take a call on the issue at hand. If you are in a competitive, cut-throat industry and need quick go-to-market timelines to survive, forget about achieving this by consensus. In such a scenario it is always better to have a firm owner who is empowered enough to take decisions and assume responsibility of such decisions.

Instances abound in the corporate world where organizations have tried dual leadership models, possibly to reduce risks. What gets reduced is the speed and agility with which organizations can respond to change. A recent example which comes to mind is Wipro - http://news.in.msn.com/business/article.aspx?cp-documentid=4825457, where this model failed. Infosys on the other hand shows a different approach where joint founders got a shot at the top position in turns, with varying degrees of success and acceptance.

In my view looking for consensus becomes futile in these situations -

• Conflicting or Vested Interests
• Missing Big Picture
• Lack of Clarity of Vision across Organization
• Seeking Opportunity to Negotiate Self-Interest (you scratch my back I will scratch yours)
• Multiple Strong Dictatorial Views
• No Party Willing to Give Ground
• Attitude of 'Not My Turf'
• Oppose for the Sake of Opposition

When looking for approaches and methods of building consensus, I found several articles propagating the advantages of consensus and how to make consensus work. So here's a view from my side to say there is no consensus on the utility of consensus. :)

Project Management Approach to Nation Building

This week in Bangalore at the PMI National Conference 2011, I had the pleasure of hearing India's former President Dr APJ Abdul Kalam on the topic of Project Management Approach to Nation Building. A truly inspirational speech which exhorted the audience of mostly project managers to be leaders and create leaders in the task of nation building. Dr Kalam recounted his experiences in ISRO and DRDO around project management.

The question I had formulated to ask the eminent speaker and which was expressed in most of the questions from the rest of the audience was to solicit his views on tackling corruption - one of the big obstacles to nation building which has been brought under the spotlight  very harshly in recent times.
In his replies, Dr Kalam beseeched parents and teachers to instill in their children a value system which prevents the very thought of corruption as a normal way of life. This would lead to a revolution of truth with the youth brigade leading the charge and which questions their elders and seniors when and where they see a wrong practice - be it in their homes itself.

He also pointed to the initiatives in e-governance which he had started while he was President of India, and pointed out the transparency and accountability this inherently brings in public dealings.
Another very powerful concept that Dr Kalam elaborated was creating a Brand of Integrity around oneself which then permeates to the environment around one and starts increasing the Circle of Integrity. He explained how due to this brand of integrity which he himself followed and promoted, in his 40 years of experience in dealing with public funds as well as dealings with government officials and people's representatives, no one ever asked him to do anything wrong. That is the value which his Brand of Integrity confers on him and his work.

Dr Kalam asked us to take a pledge to work with integrity and suceed with integrity. He also pointed out the importance of managing failures better than managing success.

A few key take-aways from his speech on project management for nation building -
- What worked yesteday is not going to work in today's changing, tumultous and volatile times. The focus has indeed shifted from

• availability of resources to availability of knowledge,
• hierarchy to synergy,
• command to facilitation,
• order to empower and
• seniority or authority to creativity

My earlier blog postings on a similar topic is listed here for relevance. The redundancy of hierarchies

You Are The Traffic

There is a sign on a busy stretch of highway in Luton which says "You are not stuck in traffic. You are the traffic." Really makes one think. Many have been the times when we have been wistful about ideal scenarios and how we wish things were better around us. What we probably do not realise is how much we contribute to the problem itself.

If we are not engaged in working towards making things better, then definitely we are making things worse. If we do not provide the solution we are a part of the problem. My exhortation to you today is -

STOP WHINING! START WINNING!!

Look around you in your work environment and I am sure you will be able to make a list of 10 processes which hinder your work in some way or the other, making you inefficient or making you spend family time at work or making you put in heroic efforts. And as I have noted earlier in my trilogy on The Elusive Business Process, heroic efforts are a sure shot indication that things are being run in an ad hoc manner.

Here are a few tips on how to identify what is not working in your organisation -

1. Hours spent in escalation calls and on e-mail - If your employees are spending most of their time handling e-mail, it is a sure shot indication of processes which do not work. Any transaction which cannot be handled by the process, lands up in the inbox. The amount of time your team spends on e-mail will be directly proportional to the time you as a manager will spend on handling escalation calls and mails.

If you are encouraging completion of transactions on e-mail, you are contributing to the problem. A transaction handled on the e-mail, while resulting in temporary instant gratification, does not solve the problem permanently. Primarily the information and the solution remains confined to the few people involved in the mail. And reply-all does not solve the problem either.

2. Innovation in routine transactions - Innovation is good. But we do not want all our employees to start innovating in their daily routine chores. That is supposed to be run blind-folded and only taken up for process improvement or SLA impprovements. Routine can even be questioned as to whether it is indeed adding any value to the company. But once established as a required value-add task, it should not have to be perforce improvised upon to get anything done around here.

3. Personal interactions and rapport get things done - Another clear indication that process is not working. All good behaviours in themselves but as tools to get work done, it indicates your organisation will not survive the next round of exodus. This also leads to processes which get enforced for few people and get bypassed for few others who have a good rapport.

4. Lack of workflows and automation - Lack of software or existence of software which does not have workflows is another factor leading to things that do not work. Basically this leads to a breakdown of information flow across functions that are supposed to deliver the goods or the as a whole to the customer. Either it does not work fast enough or it does not send the right information to the right functions at the right time. The key requirements to make the organisation work as one unit are integration, communication and empowerment.

5. Process for the sake of process - If anybody ever tells you that you need to do particular steps because a) managements says so b) SOX says so c) we have always done it this way, be assured that 9 times out of 10, you have come across a non-value add process. Question Why and question it five times before blindly following such processes.

Processes exist to enable business and not to hinder it.

World Telecommunications and Information Society Day 2011

We will be celebrating World Telecommunications and Information Society Day on 17th May 2011. At this point, let us look at the history of Telecommunications and look at some trends as to what the future portends.

That technology would tend towards obsolescence was pretty clear even in the 18th century. Soon after the semaphore towers went live, there emerged electrical telegraphy, which was over-shadowed by wireless telegraphy. All in a span of 40 years from 1792 onwards. Less than a century from this date, a wireless telephone call was demonstrated. Albeit, the scientific concept of this wireless call via modulated lightbeams was later used in fiber optic networks.

Thus the 19th century was a century of the telephone and telegraph. Of course there were doubting thomases and all these experiments were sometimes dismissed as new fangled thoughts and impractical inventions. There is an apocryphal story of President Rutherford praising the telephone as an amazing invention but doubting who would want to use one anyway!

Further work in the early part of the 20th century saw voices being transmitted from one corner of the globe to the other. There was also the curious matter of pictures being beamed into people's homes which saw the birth of the modern entertainment industry. The two wars in the first half of this century gave an impetus to communications research. Most of the technology we use today finds a seed of an idea in the military research done at this time.

From the 1940s onward we see the rise of computing power and the introduction of networking within twenty years. The latter part of the twentieth century upto the 80s sees a consolidation and growth in computing and networking. From this point on every decade has seen us taking several steps forward  in technological advancements.

The '80s belonged to the popularisation of computing power while the 90s saw widespread adoption of the the internet. While the technological heart skipped a beat at the turn of the century, fearing the apocalypse of Y2K, it quickly recovered to see the first decade of the 21st century lead to an almost endemic growth of mobile and social networking.

What next?
Now that we have moved eons beyond the initial incredulity of voices and pictures being transmitted from one place to another, and have succeeded in making the internet mobile, it does beg the question - what next?

Let us look at some of the trends we see taking hold in this second decade. The mobile workplace is definitely here to stay and e-mail has been pretty tough to dislodge so far despite the various waves of alternate communications. Digital means of doing business can still be said to be emerging and could be the next big thing. Cloud is definitely the toast of the town at the moment. History shows us that successful inventions need to catch the popular imagination to survive. History also tells us that new technology is more often than not built from innovations on top of previous technology. The Internet became widespread by using the old telephone and television networks.

Hence, I dare to predict that this decade will belong to networked business communication in pretty much the same way social networking took the first decade by storm. Organisations will become more and more virtual and we should soon see the establishment of an entire office infrastructure on the cloud. Especially as the digital generation starts entering the workforce, every bit of paper and physical transaction will be questioned for efficiency and productivity.

What would be interesting to watch is the socio-economic impact of these new developments. Would the big corporations be early movers and monopolize the virtual space or would this lead to the emergence of challenger organisations who would be much more nimble and open to such an idea? Would rural business take a lead over urban given that the economies of distance and opportunity would make it far more advantageous for them to be ravenous adapters to new technology?

The New Wave Business Process - Part III : The Elusive Business Process

Wiki defines the term 'business process' as a set of related, structured activities which lead to a service or a product being produced and delivered to customers. What this implies is that if you can define your business goals and list down the activities in various functions needed to achieve these goals, you should then be able to set a sequence to this list, which becomes your business process.

Business is definitely run 100% on process. What matters is what is the maturity level of the business process in your organization. After all even ad-hoc collaboration leads to following a process which delivers products and services. However, ad-hoc process will not be scalable or repeatable. If we want to deliver consistent reliable service to customers, then business process maturity has to be ensured.

In order to take steps forward in the right direction, we need to first realize where we are. In your organisation, if  you see great customer appreciation for individual efforts, personal interactions help save the day, and your team is motivated to ensure no problem is insurmountable in meeting deadlines, then you are in trouble as far as process maturity is concerned. These are all symptoms of an ad-hoc process organization.

What you need to do at this stage is take a hard look at the structures in your organization, study process documentation (in all likelihood - none), and embark on a study of process frameworks best suited to your business environment and industry sector. Such an entity is likely to go through organizational re-structuring, documentation of existing ad-hoc process, adoption of frameworks and trying to super-impose ad-hoc processes to standard frameworks.

In order to reach Managed processes, such an entity would be well advised to set up a central process analysis team comprising of a cross functional selection of senior managers. This forum should be empowered with top management sponsorship and review. Individual heroism should take a second seat to the goal of creating a managed process entity.

This forum should strive to build / modify the organization structure aligned to processes. This will lead to internal service units being created which so far as possible are the owners of specific deliverables within the entire process and which in turn defining TAT and SLA for each other. This would also result in providing role clarity to employees on what exactly they are supposed to deliver to the organization.

The hallmark of a managed process entity would be existence of disciplined organizational units which own and deliver specific tasks with desired quality and within specified timelines. At this stage the organization should see repeatable practices, customer appreciation for consistency and reliability of the organization as opposed to appreciation for individual heroism earlier.

By now the organization would be demonstrating process definition in every work unit. Each work unit is now stabilizing their process. It is possible to get data out of every process step to measure and improve on bottlenecks. The next step would be to standardize the processes across work units and ensure seamless interaction among various functions. Only at this stage would BPR or Six Sigma programs yield benefits for the organization. If such exercises are attempted on an immature organization, the programs will not be well appreciated and by the time we reach this stage a fatigue would have set in amongst the resoruces which will make it all the more difficult to progress beyond this stage.

Thus it is very important to calibrate the process maturity journey of the organization to avoid mis-steps and over-reaching one's goals. While we are moving processes to managed and stabilized stages, it is also important to realize the potential of automation in bringing about productivity gains. Automation will help little in ad-hoc processes and will in fact be counter productive as one goes on spending endlessly on automating new ad hoc processes continuously. Once work units agree upon standardized processes, automation can be brought in to define, perform, monitor, measure and report on processes which can be then taken up for further improvement based on observations.

These further improvements are most likely to come in the form of end to end integration projects being taken up within the organization. By this time, industry best practices would have been instituitionalized and functions will even start improvising on industry best practices. This should neither be surprising or disturbing. After all industry best practice is defined as those practices which work best for us.

Beyond this, each organization will need to find its own unique path to reach repeatable and innovating stages of process maturity. At repeatable stage the aim will be to reduce process output variances, empowered functions will take corrective action or improvement steps on their process area, since they know the larger model and are in sync with the larger picture of the organization. Organizational capability measures will be more in focus rather than function wise capabilities.

For an organization to be recognized as an innovative process organization, there should be demonstrated sponsorship of innovation projects, proactive improvement programs for achieving organizational goals. Often what is seen is that leadership teams attempt to execute projects at innovation maturity levels which may be in keeping with their thought process maturity, but fails to recognise the maturity levels of the organizations that they head. This is a major pitfall to be avoided. Leaders need to ensure that they nurture the maturity level of their organizations, rather than operate at innovating levels and assuming their organization will play catch up.