Disruptive Value Innovation

Venkateswar Reddy Melachervu
Head of Technology and Solutions
Apollo Hospitals Group
Date: 25th Oct 2011

Disruptive Value Innovation
Ushering in the power of technology to the bottom of businesses pyramid
ringing in real IT returns

Tags
Disruptive Value Innovation, The IT Leverage Drivers, The Big Enterprise IT Puzzle,
Cloud Technologies, Reality Check, Cost Effective Technology Innovations for Bottom of
The Business Pyramid, Integrated IT, Wireless Broadband, No-frills Turn-key Solutions,
True Technology RoIs, Leveraging IT

Disclaimer
The views, concepts, notions expressed in this column are personal and may not
represent the views of the employer or publisher of the column writer.

Prologue
Information Technology has been available largely for the last 5 to 6 decades for the
businesses. Most of western and many of rest of the world businesses have been
leveraging the IT to be competitive and achieve scales of business economies across
various layers of their organizations – operations, offerings, supply chain, business
partnerships, workforce productivity, sales etc.

However, leveraging IT cost-effectively and seamlessly in an integrated way catering to
360 degrees of constituents an organization remains an unsolved jigsaw puzzle for most
of the organizations in emerging economies (e.g. BRIC1 Nations) and sizable companies
in developed nations in today’s globalized economy.

The following chart is a representation of where various industries stand in adapting
and leveraging IT for achieving scales of economy, efficiency, winning, retaining their
customers and staying as leaders in their respective businesses for longer periods, un-
beaten. As you can see very few organization are above the lower threshold of adaption
and leveraging IT – which is a minimal point of true technology RoIs2.

©”…dare to dream; care to win…”

1 BRIC – Brazil, Russia, India and China
2 RoI – Return on Investment

Email: vmelachervu@gmail.com | website: www.linkedin.com/in/vmelachervu

© Venkateswar Reddy Melachervu 2009-2011. All rights reserved.


Figure 1: IT Adaption and Leverage Across Businesses

IT Leverage Drivers
Some of the key factors that influence espousing and leveraging IT by the organizations
across industries are:
 Type of business – new age businesses or traditional businesses
 Average education level of the organizations
 Minimal IT usage skill level of the organization
 Complexity of IT solution(s)
 Cohesiveness of multiple IT sub-systems
 Multitude of IT vendors
 IT investment (upfront and operating)
 Operational efficiency goals
 Global business opportunities and competition
 Seamless and sufficient data connectivity – wired, wireless, urban, remote etc.
 State promotion and subsidies on IT usage

The Big Enterprise IT Puzzle ©”…dare to dream; care to win…”
When we look deep into the challenges faced by the businesses in the bottom of the
graph above, we can deduce that these challenges are nothing but various
manifestations of the key factors addressed in IT Leverage Drivers above which looks
like a big jigsaw puzzle - The Big Enterprise IT Jigsaw.




3
Figure 2: The Big Enterprise IT Jigsaw

These jigsaw puzzle pieces are applicable across the industries, verticals and business
sizes. These pieces are more visible and tangible especially in SMEs4, traditionally
conservative sectors like healthcare, construction, manufacturing etc.

With the proliferation and innovations in technologies like – virtualization, cloud
computing, 3G data, wireless broadband, web 2.0, power-in-the-palm (smart phones),
convergence of web, PSTN5 and PLMN6, throw-away bandwidth charges - companies
across all cross-sections have better and opportune environment now in adapting and
leveraging IT than in ever.

Just imagine the power and reach a small business in the nook and corner of a country
can get with the potent combination of Wireless Broadband (4G7) and an integrated
business IT applications offered in Cloud and accessed through simply a browser!

Disruptive Value Innovation
Like innovations that changed the world – electricity, automobile, telephone, computer,
internet etc., emerging innovations – cloud computing, power-in-the-palm (smart phone
and tab) combination stand on a firm and potent ground that will change the landscape
of leveraging IT enabling organizations in rapidly and instantaneously responding to
dynamically changing markets and customers in this globalized competitive world –
forever.
While we have been witnessing SaaS8, PaaS9, IaaS10 for some time now, the critically
missing things are:

3 TOC – Total Cost of Ownership
4 SMEs – Small and Medium Enterprises
5 PSTN – Public Switched Telephony Network
6 PLMN – Public land Mobile Network
7 4G – 4th Generation Network
8 SaaS – Software as a Service
9 PaaS – Platform as a Service




 The true integration of SaaS, PaaS, IaaS flexibly catering to 360 degrees IT needs
of the organizations of different sizes – especially those at the bottom left
quadrant of the graph
 Lack or absence of associated innovative business models in offering cost-
effective, truly integrated, wholistic, platform-centric, core business-focused
services-driven, turn-key IT offerings for the organizations especially at the
bottom of the graph ushering in true returns of the IT

To create a conceptual model that addresses the above lacunae, let us examine two
powerful contemporary conceptual frameworks that are well respected and accepted
globally.
 Disruptive Innovation - helps create a new market and value network and
eventually goes on to disrupt an existing market and value network - principally
driven by technological innovations
 Value Innovation - the simultaneous pursuit of differentiation and low cost that
creates new demand in an uncontested market space or a Blue Ocean amongst
Red Oceans – principally driven by innovations in business models that create
value to the consumers
 Integrated Platform-centric Approach - It is also important to understand the
evolutionary approaches that some of the IT industry leaders like Raman Roy
are envisioning in emerging economies for the next leapfrog

Figure 3: The Next Leapfrog for IT Companies11
Now imagine an innovative value-driven integrated technology platform-centric model
combining a disruptive integrated services-based business model. It is not a silver bullet
framework nor a magical new notion, but an evolutionary fusion approach of
contemporary notions emphasizing the integrated technology platform, turnkey
integrated services and flexible framework - the combine of which will create value
innovatively ushering in true returns on technology investments for the businesses of all
sizes and across the industries – Disruptive Value Innovation.

10 IaaS – Infrastructure as a Service
11 Source : Raman Roy, Quatrro, presentation to NASSCOM 2010




Figure 4: Disruptive Value Innovation™

Some of the expected outcomes of Disruptive Value Innovation framework are outlined
in the below diagram.

Figure 5: Characteristics of Disruptive Value Innovation™

I plan to detail and unravel how Disruptive Value Innovation framework can solve The
Big Enterprise IT Jigsaw and benefit in multi-dimensions across cross-section of
businesses and industries with case studies – especially for those business where the
technology adaption and leveraging IT is beneath the threshold and the technology RoIs
are not clear and real, in the coming weeks through this guest column series – Disruptive
Value Innovation.



Disruptive Value Innovation

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