Commented on “HBR Production”

Posted: June 9, 2010 by Ananth in Business Models

The copycat model has also worked effectively in IT services – where almost every player decided to set-up low cost bases in India, South America, Eastern Europe etc. However, the issue that I see in the IT industry is that the follower (the copycat) didn’t really do anything to innovate – he simply adopted the same model – and the only “innovation” (if you can call it that), was to scale their operations – and bring in a multiplier effect to top and bottom line revenues.

With the recession, and with cash drying up, customers are now seeking more from their IT vendor – and that means the IT vendor needs to shore up serious skill sets – in order to provide services relating to improvements in business process, optimisation of the value chain etc. And unfortunately, a host of these IT vendors are caught off-guard – as they simply haven’t planned for the future – and now there is an urgency to BUY innovation. And the issue with such an acquisition is that the organisational fabric simply does not allow for innovative flexibility, and the other problem being the lack of ability to SCALE such buy-outs.

I believe that innovation, lies in contexts. Copycats did copy – but they “contextualised” the copy into their value chains. This contextualisation led to design improvements, process improvements etc. In the end, it is “contextualisation to your and your customer’s value chain” that drives innovation – not merely copying an idea or product, and not merely inventing and idea or product.

Originally posted as a comment
by ananth999
on HBR Production using DISQUS.

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