Innovation - IBM · "Often, in common parlance, the words creativity and innovation used...

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Innovation

Gary BarnettResearch Director, Ovum

gab@ovum.com

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AgendaHello

Innovation

What is it?

Different types of innovation

Innovation is all about the outcome

What does the business want?

Testing a vendor’s Innovation Quotient

How can you challenge vendor claims?

Establishing Innovation as a deliverable.,..

Can you measure innovation?

Three things...

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What is innovation?

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Some definitionsLuecke and Katz (2003):

"Innovation . . . is generally understood as the introduction of a new thing or method . . . Innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services. (p. 2)"

Davila et al (2006) comment:

"Often, in common parlance, the words creativity and innovation used interchangeably. They shouldn't be, because while creativity implies coming up with ideas, it's the "bringing ideas to life" . . . that makes innovation the distinct undertaking it is."

Ovum (2006):

“Innovation is applied creativity; that brings about tangible improvements in service, process or product”

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It’s a marketeer’s dream“Innovation” rhymes with lots of things

Situation, Realisation, optimisation

The word can be re-cast in “innovative” ways

SynovationEDS has taken this one already

Innogration

Collabovation

Innovation is a marvelously woolly concept

It can be interpreted in many different ways

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Incremental vs Radical InnovationIncremental

Evolutionary change

Low risk

Incremental reward

Radical

Revolutionary change

High risk

Potential for high reward

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Is Innovation a good thing?

Consider the following...

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At the doctor’s you’re told...

… I would like to try out an innovative new procedure with you...

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Which house would you buy...

Both very similar in terms of location, size, layout etc

Except:

House “A” has boring “old fashioned foundations”

House “B” has foundations that are “exciting” and innovative

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You accountant tells you

… we’re going to calculate your tax using an innovative new

approach...

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Your mortgage agreement states

… we will apply an innovativenew formula to calculate

the interest you pay...

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Different approaches for different circumstances

Enterprise Infrastructure(SOA)

Utility Assembly Delivery

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It’s all about the Outcome

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If there’s no business outcome, it’s not innovationAll the business wants is -

Price competitiveness

Supply chain efficiency

Removal of cost from the business

Value competitiveness

Time to market

‘Surprise and delight’

A market of ‘one’

Reach

To new customers

To new channels

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Testing a vendor’s IQ

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Innovation Quotient : Basic PrinciplesIf there isn’t a client in the room, it isn’t innovation

Research is ok, but unless there’s a client that benefits then it’s just research

You can’t claim to be a global innovator if all your innovation happens in one country

There’s not much point in announcing the opening of a global innovation center that’s based in Texas

No vendor is big enough to deliver consistent innovation without involving partners

The most effective vendors will engage partners in the innovation process

If there isn’t an “outcome” it isn’t innovation

Your shareholders don’t want “innovation” they want “profits”

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Be Cynical: Ask for evidenceFrom your geography

Some vendors will have lots of US examples, but will be able to provide very little evidence that shows that their innovation capabilities “travel”

From your sector

You need to know that the vendor understands your business, and the drivers that affect it

Don’t regard a case study based on a small gold mining company in Saskatchewan as

evidence that the vendor will deliver innovation to you

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Can the vendor strike a balance between incremental and radical innovation

The smartest vendors will know when to aim for incremental and when to aim for radical innovation

Radical innovation isn’t always going to be the right approach

Smart vendors will be able to do both

Essential because you will want to do both

Smart vendors wont try to sell you “Innovation” but the outcomesthat it brings

We’re very pleased to see IBM using the phrase “Innovation that Matters”

Smart vendors will consider innovation in every aspect of what they do

Innovation in terms of technology, delivery, relationship

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Establishing Innovation as a deliverable

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Delivering innovation

Clear goals

Your shareholders don’t want “Innovation” they want results

Cost reduction, process improvement, agility, reach

And agree a way to measure success

Distinguish between different components of your IT portfolio

With some you want steady, reliable, incremental innovation

With others you may want to take a more radical approach

Don’t just innovate in terms of technology

Innovate in terms of the relationship

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Delivering innovation

Think about intellectual property / trade secrets

What contribution have YOU made to the innovation?

How does your agreement apportion the ownership of intellectual property that is generated?

What resources will the vendor bring to bear to deliver innovation

Experts, lab access, engineers, development teams?

What resources will the vendor expect you to bring to bear?

Key managers, business experts, architects

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Three things

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Three key thingsInnovation is the differentiator du Jour

Remember it is all about your businessCarefully check each vendor’s IQMake sure they can repeat their past successes with your business

Innovation isn’t innovation without a clear (measurable) outcome

Be clear about the outcome that you wantBe clear about the type of innovation you’re after

If “Innovation” is part of the value, it should form part of thecontract

Make sure that innovation doesn’t just form part of the conversation, but part of the contract as wellBe clear about your responsibilitiesMake sure the agreement covers intellectual property that is created jointly

Level 3Questions?

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Thank-youGary BarnettResearch Director, Ovum

gab@ovum.com