PREPARED BY ANANG WITJAKSONO. Three critical aspects of innovation and value creation Cocreated...
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Transcript of PREPARED BY ANANG WITJAKSONO. Three critical aspects of innovation and value creation Cocreated...
INTRODUCTION
Three critical aspects of innovation and value
creation Cocreated with consumers. Access resources from multiple sources. The emerging markets an be a source of
innovation
EXAMPLE iGOOGLE is about cocreation of value &
personalization of experience- for fun and learning
The Ponds Institute- measures your skin conditions and seeks your view about how you want look and feel.
Starbucks-pick up your favourite coffee and run, stay and read newpaper, have meeting and do your homework
THE NEW HOUSE OF INNOVATION
N=1 Personalized cocreated experiences
R=G
Global access to resources and talent
Technical architecture of the firm
Social architecture of the firm
THE TRANSFORMATION OF BUSINESS, TWO BASIC PILLARS :
Value is based on unique, personalized experiences of consumers- the focus is on the centrality of the individual- N = 1 (one consumers experience at a time)
The focus is on access to resources, not ownership of resources.
EXAMPLE ING, GLOBAL FINANCING SERVICES COMPANY
Worked with Unisys, a large IT services firm
For policy processing time from 10 days to 30 seconds
To develop the combination of features that meets specific customer’s needs.
80 % of its policies are automatically generated this technical platform.
The number of policies written generated has increased by 500%.
Increase cost but revenues per agent and per call also increased (better yield to call ratio)
APPLE IS CLOSER TO THE N=1 AND R= G Individual users to personalize their experience
with their music selection one song at time. To store of thousand of songs and can listen in a
park, gym, at home, cars etc. apple controls over 80% of the $ 4 billion digital music market.
The iPod, as device, is manufactured with partners across the globe.
Disk drive are made by Toshiba, display modules by Matshusita and Toshia Japan, SDRAM by Samsung in Korea and video processors by Broadcom, US firms, final assembly y Taiwanese firm, Inventec, at its facilities in China.
THE KEY ELEMENT OF THIS TRANSFORMATION Value is shifting from products to
solutios to experiences. No Company has all resources it needs
to create unique personalize experiences – from the best source ( R=G)
Flexible systems are a prerequisite and must be developed.
Resources in the ecosystem must be continually configured.
Specific models must be developed to focus on one consumer from the millions.
DEVELOPING NEW PRINCIPLES FOR INNOVATION Principle 1, N – 1 –
the individual is at the heart of experiences.Focus on individual consumerFlexibility, example pricing base on risk
assessment for each patient say monthly Quality, cost and experience, Collaborative networks, Complexity, can be managed only through a
sophisticated systemCustomer interfaces, must be simple and
intuititive. Scability, must be matched with the sheer
scale of operation.
DEVELOPING NEW PRINCIPLES FOR INNOVATION - CONTINUED Principle 2, R = G
Resource base of large firms and learning how to access high-quality resources at low cost.
Access resources, move away from vertical integration to access specialized, global suppliers.
Outsourcing is one way to access low cost, high quality talent.
SpeedScability, continous scaling and downsizing of
operation. Innovation arbitrage, large firms better focus
on small firms as sources of innovation.
THE N = 1 AND R=G WORLD,
UNIQUE PERSONALIZED EXPERIQNCES AS THE BASI FOR
VALUE CREATION AND
EXPANDING SOURCES OF RESOURCES
THE NEW AGE OF INNOVATION
THE N = 1 AND R=G WORLD,
unique personalized experiqnces as the basi for value creation and expanding sources of resources
BUSINESS PROCESS Twin dimension of business process are :
The technical architecture. Social architecture.
Not just focus on know how but on know why and know what
The bloodstream of an organization. The link between the business strategy,
business models and day to day operation. The logical relationship among activities
within the firm ( and its network collaborators, R=G and its relationship with consumers (N=1)
EXAMPLE BUSINESS PROSESS AS SOURCE OF COMPETITIVE ADVANTAGE
Wal-Mart, to manage its global chains form China to the US and al places.
FedEx, check on the status of packages. UPS has partnered with several local PC
repair shops and contract technicians in various geographical locations to repair Toshiba PCs (R=G).
A LIST OF BANKING & FINANCIAL SERVICES INNOVATION BY ICICI IN INDIA Internet banking Microfinance portfolio. Offering in three market, US, India and
Japan. Doorstep service for home loans. Bill payment facility on ATMs Wireless local loop technology. Solar-powered ATMs. Nonperforming assets. Full-fledged statement printing on the
ATMs
ICICI’S CORE CAPABILITIES Business process flexibility. Synchronization of strategy, business
process and ICT architecture. Senior management leadership in
shaping social structure nd culture.
ANALYTICAL TOOLS PROVIDE BUSINESS INSIGHTS “Gut feel”, if you will. Foresight, not hindsight, is of value. The importance of analytics for
actionable insights, but insight must be built on a platform of clear strategic direction.
Analytics must be driven by strategy. Insight also result from consumer
concerns and comments.
GLOBAL RESOURCES ACCESS (R=G) Visible global supply chain. Dynamic real-time reconfiguration of
resources.
THE CAPACITY TO SERVE INDIVIDUAL CUSTOMERS – THAT IS, PERSONALIZATION AND COCREATION OF
VALUE – WILL DEMAND CAPABILITIES TO WORK WITH CUSTOMERS TO ANTICIPATE AND PREDICT
THEIR PREFERENCES ON A CONTINOUS BASIS
COCREATION OF VALUE: N=1
BUILDING THE ANALYTICS CAPABILITY
Structured and
unstructured
databases
Competitive
landspace : N=1, R=G
Clarity to business process
Analytics and actionable insights
Computing and
telecom network
BUSINESS SPECIFICATION FOR THE NEW ICT ARCHITECTURE Confronting reality. Compliance and change. Evolving capabilities. Enabling foundations.
CONFRONTING REALITY Capacity to link large systems and
multiple databases. Proprietary system and transparency. Legacy assets and new applications
COMPLIANCE AND CHANGE Regulatory compliance and change. Complexity and cost of change. Quality and speed of change.
EVOLVING CAPABILITIES Secutiry and privacy of data. Complexity and user-friendliness. Knowledge management anf knowledge
creation.
THE MINIMUM REQUIREMENT OF AN ICT PLATFORM CAPABILITIES FOR INNOVATION A component-based design of business
process. Ubiquitous access through a corporate
intranet and internet. Open interfaces to data and external
systems. Integrated capability for analytics.
THE EVOLUTION OF DOMINANT LOGIC
Development of a new business model
inability to see new opportunities and act on them; inability to build
new business models
Dominat logic becomes the lens
through which new data is interpreted
Recipe become dogms: dominant
logic
Behaviors, skills,
analytical tool refelct business
model
Business model embedded in organizationn
System, business
process, ict capabilities
reflect business model
Success srystallizes
business model
SOCIAL ARCHITECTURE & DOMINANT LOGIC The dominant logic becomes the lens
through that firm see the world. What is cool, children don’t pay, but
they influence. New capabilities is not just investment,
it is about the way of thingking. Partnertship with universities to
leverage raw talent (in India). The major pharmaceutical firmas are so
focused on intellectual property.
EFFICIENCY AND FLEXIBILITI: MANAGING THE TENSION Business process are flexible and can
accommodate continuous innovation. Business process is the mediating glue. Business process portfolio ; direct to
customers, to vendors etc. No firm can ignore business process
governance. Elasticity of business process. Example cable TV offers prepaid cards
and digital accounts, they pay per use, not per month.
MOBILIZING TALENT, NOT OUTSOURCING Mobilizing talent – within and outside the firm. GE, microsoft, siemens, philips, cisco, intel,
texas intruments, motorolla, have significant R & D facilities in China and India.
Philips innovation campus in India is Philips’s largest R & D center outside Holland.
The dominance of Taiwan and other Asian countries in semiconductor manufacturing.
Globalization is creating a new dynamic. Not about exporting job but importing
competitiveness.
MOBILIZING TALENT, NOT OUTSOURCING Implemented in multilocations and
around the world. Expertise is geographically distributed. Task from new and complex activities to
routine. No fixed patterns in the migration of
jobs. Talent arbitrage not just cost arbitrage. Velcro organization, come together
temporarly to perform a task a related.
THREE LEVELS FOR TALENT OF EMPLOYEE Formal hierarchical structure. Business process and analytics. Personal attitudes and skills.
THE NEW HOUSE OF INNOVATION
N=1 Personalized cocreated experiences
R=G
Global access to resources and talent
Technical architecture of the firm
Social architecture of the firm
THE APPROACH TO MIGRATION DEPEND ON : Starts with a distinct and clear point,
value creation depend on N=1 and R=G in the future,
A clear articulation of the current capabilities
Cannot get us to where we want to go Broken down into smaller milestones
and critical double steps. Can not know all the detail of the
journey. Sense of urgency and stamina.
THE APPROACH TO MIGRATION DEPEND ON : (CONTINUED) Develop detail metrics. A long term focus with short term
action. Have to perform during transformation. Capability building is an arduous
process. Capability building must focus on
technical and social infrastructure. Bound to be time lags between efforts
and results.