Driving Innovation:Hear about the current status on innovation, frameworks being utilized to groom foster and develop impact to an organization

Karthik SubburamanOct 19, 2015

“Never before in history has innovation offered promise of so much to so many in such a short time”

- Bill Gates

What is Innovation?

• Innovation can take the form of a new product or service offered to clients or a new process through which an organization develops products or delivers services.

• Innovation can also be anything that is state-of-the-art and also anything which is new to the organization.

Why Innovation?

Critically important Quite important Nice to have Not important at all

Ability/track record to deliver standard operational services

Financial stability

Ability to focus on business outcomes, as opposed to an effort-based approach, to pricing

Global presence/scale

Abiilty to transform processes Ability to provide innovation (i.e. new sources of

revenue) in the future

Brand recognition

0% 25% 50% 75% 100%

Source: Research Study by HfS

Innovation – Types & Needs

• Provides significant operating margin growth• Differentiates from rest of the pack and signifies

change• Typically a phenomenon when successful

• CEO’s ranked top of priority lists*• Drives efficiency / effectiveness in products &

services

• Focuses on delivery model innovation / new market penetration / partnerships for promotion

• Not a day-to-day innovation

“CEO’s today face mounting pressure to innovate, yet finding ways to actually enable innovation remains a challenge for many”

Product / Service / Market

Operational

Business Model

Source - Research Study by IBM

Operational Innovation – An Illustration

Frugal Innovatio

n

5,000 Dabbawalas130,000 Lunch boxes

2X Transactions0 Errors

“Workers have

40 seconds to load crates of dabbas onto trains at major stations & just 20 seconds at interim stops.

”

Delivery cost @ 7 USD / month / customer

Self-organized democracy

Simple

Codes

Buffer Capacity

AdherenceCulture - Shared Identity

Simple Mission

Generations of BPO

Source: Next Generation BPO: Are you Ready?, Accenture

Are service providers meeting innovation expectations?

Q. To what extent has your primary BPO provider met your expectations with its provision of resources (i.e. personnel and tech.) to your current engagement to help you achieve innovation?

Are BPO buyers meeting Innovation expectations?

Q. To what extent has your primary BPO client (s) met your expectations with their provision of personnel to help them achieve innovation?

Our provider has exceeded expectations 4%

Our provider has met

expectations

Our provider has somewhat disappointed to meet

expectations

Our provider has completely failed to meet expectations 1%

41%

54%

Our clients have exceeded expectations

Our clients have met

expectations

Our clients have somewhat disappointed to meet

expectations

Our clients have completely failed to meet expectations

0% 20% 40% 60% 0% 20% 40% 60%

8%

47%

41%

4%

BPO Innovation – A Perception

Source: Research Study by HfS

BPO Innovation – Challenges

Source: Research Study by HfS

BPO Innovation – Gaps / Opportunities

Source: Research Study by HfS

Lean Six Sigma for Innovation?

Quality & Efficiency

Leads to continuous improvement

Supports collaborative innovation

Leads to continuous improvement

Is this the answer?

Lean Six Sigma vs. Innovation?

Eliminate Variability & Waste

Introduce Variability when it creates preference

Minimize Cost Tolerate cost if corresponding preferences outweighs

Map Process Map customer journeys

Rely on large numbers for certainty

Explore important questions and small number to uncover possibilities

Arbiter – Process Capability

Arbiter – Customer Behaviour

Enabling Innovation

1. Build Idea

Pipeline

2. Improve

Idea Velocity

3. Increase Batting Average

1. Lay the Foundation2. Create a Challenge

Book3. Build Participation

1. Experiment Low Cost at High Speed

2. GO Fast from Prototyping to Incubation

3. Iterate Business Model

1. Build an Innovation Sandbox

2. Create a Margin of Safety

Source: 8 Steps to Innovation – Going from Jugaad to Excellence

Enabling Innovation

1. Build Idea

Pipeline

1. Lay the Foundation• Idea Management• Buzz Creation • Training and Development

2. Create a Challenge Book• Curiosity and Problem

Consciousness• Feel the pain. Sense the wave.

See the waste.3. Build Participation

• Role Model• Community of Practice• Innovation Catalysts• Rewards and Recognition

Enabling Innovation

2. Improve

Idea Velocity

1. Experiment Low Cost at High Speed

2. GO Fast from Prototyping to Incubation

3. Iterate Business Model• Who is our customer?• What do we offer them?• How do we reach them?• How do we make money?

Enabling Innovation

3. Increase Batting Average

1. Build an Innovation Sandbox

2. Create a Margin of Safety

Promote and ensure strong factual basis for implementing any creative ideas

Must incorporate creativity into the operational process excellence initiatives! – to come up with improvement opportunities

Deploy a cross-functional approach to problem resolution & guide users through sensing, understanding, deciding & acting in ways to create value

Take into account the “Business Voices” and balance them out to ensure optimal results

LSSLean Six Sigma

SIfTSystematic Innovation

for Teams+

• Optimization • Sustainable Growth

DEFINE MEASURE ANALYZEIMPROVE/CONTROL SIfT

Enabling Operational Innovation

Managing Innovation – A Structured Framework

An Innovation vision based on factual customer and market insightsLeadership committed to perpetual innovation

Alignment across the extended enterprise

Organizational capabilities that make innovation habitual

While most companies in the industry have mastered the art of efficiency, integrating innovation into the scheme of things is the challenge.Some key pointers to make the process easier…

Innovation – Key Drivers

Do you have a clear vision of where you want your company to be in two years? In five years? In ten years?

How closely tied is this vision to the needs of your current and target customers?

And is your understanding of these needs based on actual assessments or

assumed information?

Will this vision require innovations in your business model? In your products or

services? In your markets?

What will you need to do at the operational level to enable and drive these

innovations?

To support innovation, what changes will be required to your management

approach, organizational structures, metrics and skills?

Key Questions to Ask Yourself…

What are We Really Looking For…

1 2

PRIORITY???

INNOVATIONEFFICIENCY & EFFECTIVENES

S

SCENARIO 1:

YES NOEfficiency & Effectiveness

Innovation:

SCENARIO 2:

NO YESInnovation:

SCENARIO 3:

YES YESInnovation:

Undesirable & Unsustainable

E&E vs. OI – A Fairplay?

Unsustainable & Improbable

IDEAL

Efficiency & Effectiveness

Efficiency & Effectiveness

“If you do what you’ve always done, you’ll get what you always got!”

- W. Edwards Deming

Thank you!Questions?

Trends in Outsourcing

1. Pioneers and new entrants gain attraction in the robotic process automation/autonomics space.

2. More BPO movement onshore and nearshore.

3. Mature client-outsourcer relationships will lead to a gradual shift.

4. Customer contract center services reach higher levels of sophistication.

5. BPOs engage the midmarket for opportunities.

6. The mobile-app-for-business revolution is about to begin.

7. Healthcare revenue cycle management gets reinvented.

8. With another big player providing public cloud services, look for BPaaS to boom.

9. Business continuity and disaster recovery plans are closely reviewed.

10. The Request for Proposal (RFP) gets a makeover.

Trends in Outsourcing

BPO Innovation – Key Elements

Source: Achieving High Performance in BPO, Accenture