Driving Innovation through Co-creation

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1 Driving Innovation through Co-creation A Whitepaper on Co-creation as an approach for MNC Centres to influence the future of IT Infrastructure service delivery in their enterprises

2 1 MNC centres are an important segment in the Indian IT Landscape Over the last two decades the Global Inhouse Centres (GICs) or MNC Centres, have become an integral part of the globalization strategy of the enterprises they support and are currently a significant contributor to the Indian IT industry. 2 Expectations of the parent businesses from MNC centres is evolving The expectations of the businesses from the MNC centres have grown multi-fold. The parent organizations expect high quality, innovative service delivery at steady state levels within 2 years of inception of a new service area Some of the critical dimensions of world class service delivery are 1. Building Proof of Concept 2. Spotting the emerging trends 3. Building capabilities for the future 4. Providing flexible operating models 5. Taking an innovative, consultative and Cocreation approach MNC centres have grown significantly over the last two years GICs have grown in expertise and maturity resulting in improved stakeholder satisfaction. There are tremendous opportunities for GICs to add value beyond the traditional focus on cost & productivity. There is significant momentum on building highskill capabilities. Business leaders across sectors and verticals are working on initiatives that will help GICs contribute not just to the bottom line but to the top line as well. Also, the new age business leaders in contrast to those of industrial era have strong opinion on technologies they are suggested to adopt, the benefits they are likely to reap and importantly the big bucks they have to shell out. CIOs and hence the MNC centres are under constant pressure to provide world class service whilst being innovative at the same time. Onshore Client Satisfaction of MNC centres (%) Source: McKinsey-Unlocking Full Potential of GICs

3 3 Technology Trends are Impacting the Way MNC centres Operate Since the last two years, there has been a tectonic shift in enterprise IT. The enterprise IT is now mobile, virtual and cloud enabled. Invasion of consumer technology on the enterprise environment is compelling the CIO s to relook at the way their IT is designed and consumed. With increased adoption of telecommuting by the global workforce, the manner in which enterprises managed the technology usage by its workforce has undergone a paradigm shift. Farms of physical servers are making way for smart virtual environments. Cloud computing has altered the user and enterprise behaviour with regards to deployment and consumption of IT resources be it hardware, platforms or application software. If the first generation of computer technologies helped businesses to drive up efficiencies and productivity, the emerging technologies have come to be the competitive edge for businesses. With such disruptive trends and convergence in information and communication technology (ICT), MNC centres have to find new ways to monitor, provision and manage their enterprise IT in an innovative, effective and secure manner for their parent businesses. 4 Opportunities & Challenges at MNC centres The CIOs are traversing the traditional IT cycle and are rebuilding their IT using emerging technologies and innovative service delivery models, whilst maintaining the business as usual status on traditional IT assets. To accomplish this, the CIOs are looking up to their MNC centres to keep the lights on and deliver innovative solutions in infrastructure services. Traditional IT Cycle This provides opportunity for MNC centres to proactively grow their foot print within their enterprises and drive tangible and noticeable transformation. Also, it helps the GICs to evolve into a multi-function centre and even derive benefits of economies of scale. Currently the GICs delivering on R&D, IT and Business and Knowledge services have reached a level of optimal maturity. The infrastructure management service is still a green field area with significant scope for optimization and innovation. MNC centres need to shed their hyperspecialization approach and explore newer service avenues.

4 However, MNC centres face challenges 5 Near Zero Bench Budget cuts, Lack of accruals or funding to invest proactively Lack of specialist talent in IT infrastructure services IMS: New growth frontier for MNC centres prise IT infrastructure will continue to be heterogeneous with a combination of physical, virtual, cloud and mobile environments 2. It is not possible deliver single handedly on two fronts simultaneously i.e. Keeping lights on and innovate. The MNC centres have been delivering successfully on the keeping lights on aspect of the business either by themselves or driving it through third party service providers. However, though the they consider innovation as a very important aspect of service delivery in IMS, the challenges that they face become a major impediment. Importance of Innovation at MNC centres In spite of the challenges, MNC centres have started playing a crucial role in delivering the IT infrastructure services to their parent businesses. The GICs deliver two broad services. Traditional IT Infrastructure Management services Information Security services These services were considered as test beds to check on the viability of RIM model at MNC centres. The India based GICs have graduated with flying colours and are now exploring further options. It is now time for MNC centres to move up to the next level where they influence the future of infrastructure service delivery in their respective enterprises. To accomplish this, they need to realize two critical aspects. Source: Zinnov Innovation Survey Among 50 MNC centres in India Across Verticals 6 MNC centres have to get innovative Innovation is no more considered a value- add; it is now a service delivery imperative As compared to other services (R&D, IT, BPO/ KPO) the impact of emerging technologies is profound and complicated as far as infrastructure services is concerned. 1. At least for the foreseeable future, enter-

5 MNC centres cannot be a provider of point solutions anymore; instead, they should be able to deliver integrated services across the complex spectrum of physical, virtual, mobile and cloud enabled IT infrastructure. In addition to continuous / service improvements that offer incremental and nominal benefit, the MNC centres need to collaborate and co-create with the eco -system to deliver radical and significant business benefit. Co-creation: A trend that s hard to ignore Co-creation offers a highly promising and more holistic, approach to value creation. Despite the fact that some of the theoretical and empirical foundations of Cocreation still have to be developed, Cocreation cannot be ignored by GICs who want to succeed in accomplishing their twin objectives of keeping the lights on and being innovative simultaneously MNC centres need to proactively invest and innovate in devising IT infrastructure solutions to deliver on the changing business and technology demands. 7 Co-creation is an innovative approach for MNC centres Co-creation Benefits Source: Zinnov Innovation Survey Among 50 MNC centres in India Across Verticals Service providers can make upfront investments in return for long term 8 Co-creation has worked wonders for businesses relationships The service providers open up all their systems, processes, tools and top talent for the benefit of the customer Some of the best practices that service providers have accrued over years from different customers could be leveraged Nike: In 2006, Nike launched a program called Nike+ that involved runners in testing and designing new shoes, and provided retailers with tools to customize employee training programs. Nike increased its share of the US$ 3.6 billion running shoe market from 47 per cent in 2007 to 61 per cent in 2009.

6 9 Co-creation at Microland: A success story Trust: Microland, has the capability of large scale service providers and the flexibility & agility of a niche service provider. Infrastructure operations are typically missioncritical and 24/7 services. There is no possibility of operating in an off-line or test mode and every incident or ticket is critical. One is only as good as the last ticket. This calls for extra-ordinary service delivery capabilities and collaboration with the client and the ecosystem of technology partners. As a specialist IT infrastructure Management Services company, Microland has been collaborating with its customers since its first engagement. The core DNA of the organization is geared towards collaboration. This has also ensured an average client retention tenure of more than 10 years. Microland works on all the three enablers of Cocreation and creates a condition of mutual trust as the first step. Three key enablers of Co-creation A Fortune 10 conglomerate leverages Microland s capabilities to enable its entire network backbone comprising of 18,000+ devices 80 + global telecom operators 22,000+ circuits 100,000+ voice ports Across multiple time zones & continents Access: For instance, Microland provides unparallel access its customers with a IT Lab that can be used 24x7 to, 1. Enable Poof of Concepts 2. Simulate environments for testing This lab is a multi-technology, multi-device lab and it resides on a private cloud with a self service portal for provisioning the facility. The fact that Microland Labs are used by their customers for over 1000 person days per month and that at least certifications are enabled Transparency: Microland s strong focus on transparency engenders an environment of trust amongst its clients. The Global Collaboration Cockpit a real-time dashboard that Microland created for one of its clients, a diversified global conglomerate is a great case study for Cocreation at Microland. This collaboration cockpit provides an integrated view of infrastructure availability & operations performance as well as individual views by geography & business units of its customer.

7 Also, it enables automation and end-to-end integration of monitoring tools. The business heads, IT heads and operations managers of the different business units required different granularity of views and access to information based on their roles within the organization. Moreover, there was a requirement for customized reporting and metrics related to each business. None of the existing solutions could meet this requirement. Microland worked with the client to develop the real-time dashboard with different granular views by providing the functional specifications and integration architecture for the dashboard. The dashboard has gone through several iterations since based on the operations related inputs provided by Microland to make it more effective. Governance framework Microland collaborates with its clients in each of its engagements by putting in place a joint governance framework. The twin objectives of the governance structure is to ensure that operational initiatives are reviewed regularly and to jointly develop the partnership roadmap and discuss strategic initiatives. 10 Co-creation approach is high touch & collaborative In the Co-creation approach, both the service provider and the GIC need to take a strategic view of the initiatives. The GICs should endeavour to provide the service provider with as much access as possible to its environment, stakeholders and problem statement. Further, the processes for approvals, SLAs, costs and objectives should be made transparent to the service provider so that they can develop the trust required to make investments in the relationship. The same applies to service providers as well. Microland s approach to Co-creation, especially with the GICs is one of the most mature and well developed process tool kits available in the market as of date. Microland s Co-creation Approach Co-creation is the next step of collaboration. It is about working with the client and partner ecosystem to jointly charter unchartered territory. It is about building or creating business solutions in the context of the new paradigm. Microland s Cloud services CoE is another example of how it helps its clients in adoption of cloud within the context of its organizations needs.

8 It s time for action at MNC centres Given that IMS is the next growth frontier for MNC centres to expand their foot print, and that Co-creation as an approach is the best suited to deliver on innovation, it is time that MNC centres started taking steps in this direction. To start with, Zinnov recommends the following approach. 1 2 Engage in a dialogue with a specialist service provider in the infrastructure management space Explore Co-creation opportunities with the service provider to provision IT infrastructure services within your centres in the IT as a Service model 3 Create world class self-service and automation environment at your captive centre for all your in house IT infrastructure needs 4 5 Re-design your current infrastructure or adopt a cloud based, virtual and mobile approach whilst building out new facilities Create avenues to showcase and deploy the learning from such internal Co-creation initiatives

9 Microland Value Proposition Microland s Co-creation Model goes beyond the role of a conventional service providers. The Co-creation Approach of Microland focuses on partnering with the customer, to jointly define business challenges, identify business opportunities and design and implement solution that create the successful enterprise of tomorrow. Value Delivered to GICs Lower TCOs Cost Optimization through transformation, consolidation and outsourcing Better IT Business Alignment Direct Linkage to Outcomes Agility and Flexibility Higher Performance Superior Performance IT Operations Maturity Metrics Driven Processes Six Sigma Based Improvement Microland Engagement Models Co-creation for Innovation and Transformation End to End Service Ownership of Global Operations Infrastructure Operations COE Operations Automation and Real Time Dashboard Project Management New Technology Deployments/Technology Refresh Critical Skills Augmentation