business growth

Business Growth – Led by Innovation, Enabled by Technology

Pranay MitalDirector, SMB OperationsSAP Asia Pacific

SAP APA 2004, / PRANAY MITAL / 2

How Organizations Exist

The key to successful competing is differentiation

All products & services are a me too, but differentiation is the mee tooo

The reason why our customers buy our products & services vs. competitors’

It is the value of the firm vs. the value of another firm

The only profit one makes is through differentiation

…it is the competitive advantage one firm has over another firm!

Differentiate

& Exist…grow!


Enterprise Advantages normalize with time

Competitive Advantage normalizes over a period of time i.e. Differentiation withers away

Therefore, the need to constantly ‚Innovate‘ to build differentiation


What is Innovation?

Business innovation is the creation of incremental, substantial or radical new value for customers and the firm by changing one or more dimensions of the existing business system, or by creating entirely new business systems.

Key points Value created: Incremental, Substantial or Radical

Constant, Fast & Generally simple i.e. more incremental & repeatable than substantial or radical

Business system: changing one or more dimensions of the business system

May be disruptive to core business, though not necessarily so


Thus, for Innovation to be successful it must be..

Constant

Repeatable

Generally Simple


Adaptability, Repeatability & Flexibility enables Growth

What a circus!



What a circus!


Creating Innovative Value & Advantage for Growth

Creating Innovative

Value

Reduce

What factors should be reduced that the customer may not perceive

value in?

Raise

What factors should be raised

beyond the average industry

standard?

Repeat

What factors should be

repeatable for ongoing revenue

flows?

Create

What factors should be created that the industry

has never offered?


Innovation Mapped to the Business System

Only two common factors that touch all the business system components:

People Technology Applications


Innovation Mapped to the Business System: Circus

Only two common factors that touch all the business system components: People: Customer Experience, Actors, Customers Technology: Effects, Venue, Logistics, Promotion, Sale, The Act itself


Example: Dell Computers

Technology driven business model that radically changed the industry: Technology enabled constantly enriching, fast & simpler customer

experience Technology that constantly evaulated & improve channel efficiency


Example: Starbucks Coffee

People driven business model that radically changed the industry: Focus on customer experience drove the business model Technology supported the change through store location review, process

efficiencies, supply chain efficiencies, and customer relationships.


Advantages of Technology Enabled Innovation

Clayton Christensen (1997) introduces a dichotomy between sustaining innovationand disruptive innovation.

Sustaining innovations are technologies that make a product or service work better in ways that mainstream customers already value. Sustaining innovations are almost always developed and introduced by incumbents.

Disruptive innovations create entirely new markets by the introduction of new kinds of products and services that are judged, at least initially, to be worse based on the performance metrics that mainstream customers value.

Incumbents have a hard time introducing or coping with disruptive innovations. Disruptive innovations are difficult to deal with, because they not only require new

resources, but they conflict with the organization’s processesand values, which are deeply

embedded.

Back to our basics: To succeed daily, innovation must be Constant Repeatable Generally Simple


Technology Applications enable Enterprise Adaptability

Technology Application Investment as a must:

Profitable GrowthProductivity Competitive advantageOperational excellence

+ People

Observations: Necessity to adjust Realise opportunities Technology new levers Build into a differentiation

Competitive Advantage Key business scenarios Workforce efficiency Business transparency Flexibility to integrate Scalability to grow Enable Innovation Adaptability Low TCO

Creating Sustaining Innovative

Value


Innovation enables Real-time Enterprise Adaptability

Needs: Necessity to adjust in almost real

time to fast changing industry normalization

Midsize companies realise opportunities of global markets (eg workforce optimization, global process architecture)

Technology Evolution offers new levers (CRM, RFID, e-.., ...)

Ultimately work as a real time enterprise that can leverage all the levers together into a differentiation

Growth Strategies that are both survival & leadership strategies!

Business Applications Enable

Culture: Business Transparency Processes: Clarity on dependancies Strategy: Scalability to grow Culture: Adaptability to changing

conditions Structure & Culture: Enable Process &

Product Innovation Culture & Processes: Workforce

effectiveness & efficiency Strategy & Structure: Products,

Processes, Customers & Channels are an ‚integrated view‘

Funding: Today‘s investment is protected by tomorrow‘s survival

People: Employee Confidence & Value

= Growth & Profit

= Industry Leadership


Summary

Differntiate > Innovate > Grow & Profit or Survive

Incremental Innovation is common & sustainable: It must be Constant, Repeatable, Simple

Innovation means change: Raise, Repeat, Create or Reduce product, process, channel or customer offering that does not add current customer value.

Must impact the business system of the firm

Enabled through People & Technology Applications

Technology Applications enable sustaining innovation by providing business transparency & real-time enterprise adaptability

Business Growth – Led by Innovation, Enabled by Technology

Pranay MitalDirector, SMB OperationsSAP Asia Pacific

business growth – led by innovation, enabled by technology pranay mital director, smb operations...

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