Managing innovation in IT Service organizations is extremely challenging. This can be attributed to emergent complexities, diverse nature of projects, speed of obsolescence and changing expectations of global customers, amongst others. A very effective way to manage innovation in Service organizations is to split the complexity into People, Processes, and Technological dimensions.

1. 1 | P a g e
Model of Innovation for Organizations
in the IT Software Services Industry
WHITEPAPER
Managing innovation in IT Service organizations is extremely challenging.
This can be attributed to emergent complexities, diverse nature of
projects, speed of obsolescence and changing expectations of global
customers, amongst others. A very effective way to manage innovation in
Service organizations is to split the complexity into People, Processes, and
Technological dimensions.
Dr. Asim Chowdhury

2. 2 | P a g e
CONTENTS:
Conten
 Introduction................................................................................................. 2
 The innovation landscape in the Product and Services industry .................. 3
 The People, Process, Technology Triad........................................................ 4
 Innovation in People.................................................................................... 4
 Innovation in Processes ............................................................................... 6
 Innovation in Technology............................................................................. 7
 The Innovation Delivery System................................................................... 8
 Conclusion ................................................................................................... 9
INTRODUCTION
Innovation has a much broader scope in the Software service industry today. Unlike the
product industry, innovation in the software services industry is intense, continuous, and
varied in scope. Organizations offering IT services have to manage diverse industry domains,
technological obsolescence, and increased customized needs of its diverse set of customers.
Innovation in such a dynamic environment is not easy and requires the deployment of well-
defined innovation methodologies.
Over the years, the need for innovation in the information technology industry has grown in
leaps and bounds. IT Service companies now realize that their leadership is directly
proportional to their ability to handle innovation. In this whitepaper, I propose a workable
model to manage innovation, by splitting it into three distinct areas of People, Processes and
Technology (PPT). Such structured framing can help manage the complexities of innovation
and deliver effective solutions to global customers.

3. 3 | P a g e
THE INNOVATION LANDSCAPE IN THE PRODUCT AND SERVICES INDUSTRY
Over the past one decade, the discourse around innovation has been diverse. Most
technologists perceived innovation as being natural to only product companies. Service
companies, they felt, were less innovation-centered. But, in reality, it is just the reverse.
Innovation is now a cultural phenomenon in the IT industry. Its intensity varies widely
depending on the nature of the industry. In the product industry the road-map of innovation
is staggered (Figure 1), well-defined, and guided towards a definite end. Products lie at the
heart of the existence of product companies. Everything else is less significant.
On the contrary, innovation in IT service companies is continuous (Figure 2) and spreads out
across people, processes and technological dimensions. Here the innovation ecosystem lays
equal importance to people, processes and technology since their existence is dependent on
synergistic function of all three. Service companies function in an unpredictable business
environment and therefore their needs for innovation dependents on a host of factors.
Characteristics of Innovation in IT Services
Employees are more innovation-ready than in product companies
Innovation is continuous and spread across all stages of delivery
Innovation is more agile than in product companies
Figure 1 Figure 2

4. 4 | P a g e
THE PEOPLE, PROCESS, TECHNOLOGY TRIAD
In Service organizations, the triad – people, processes and
technologies (PPT) – together encompass its 3600
innovation
landscape. Therefore, a robust innovation in service
companies can only be realized if innovation is segregated
across people, processes, and technologies. Although
independent, these three dimensions are interdependent.
Every aspect of an IT Service company’s functioning is part of
one or all of these three elements of the triad.
The triad is a balanced way to scale the innovation ecosystem
because any other structure would bring undue focus on
technology and undermine people centricity and processes,
all of which are the lifeline in IT Services.
We shall now explore how innovation rolls out across each of these
dimensions, to empower the value chain of innovation.
INNOVATION IN PEOPLE
People innovation relates to all aspects of workforce management. This involves aligning
resources to organizational goals. Innovation in workforce management is an extremely
challenging enterprise because of the social nature of employees. Employees come with
diverse personality traits, mental orientation and aspirations that make it challenging for
organizations to measure and control them.
There are two distinct aspects of innovation in people management. First, organizations
should be able to measure, track and nurture a motivated workforce; and second, they need
to ensure that the workforce is made innovation-ready. Innovation readiness of the workforce
defines the bandwidth and agility of how far organizations can meet future challenges.
People management is a broad area and it can be broken down into smaller manageable
components such as Retention Strategy, Skills Assessment, Growth Charting, and Aspiration
Mapping etc. Each of these can be further broken down to even more granular elements.
Figure 3

5. 5 | P a g e
Figure 4: Some areas in which people innovation can take place
Skills Assessment, for instance, can be sub-divided into knowledge retention, speed of
knowledge assimilation, and so on and so forth.
Every area within people innovation should be dealt with meticulously. Let us take the case of
“Aspiration Mapping”. Here we can start by
mapping the aspiration of individual
employees over a period of time. This
aspiration can relate to personal and
professional goals which can provide us a
distinct understanding of how the potential
of individual employees can be harnessed
optimally. By capturing the aspiration of
people organizations can devise ways to
harness and nurture the entrepreneurial
abilities of individual employees.
On a similar note, organizations can also
measure “Employee Motivation” by tracing
everything that motivates or demotivates
individual employees. This could include
measuring diverse aspects such as their
attendance, their willingness to participate
in organizational activities, their response to cultural events, opinion on infrastructure etc.
The data on people aspects can be stored and retrieved so as to provide a wide array of
analytical data on human resource analytics. These analytics can be devised to be generative
so that the system gets enriched with every new set of data. Such people-related analytics can
be used for developing a deeper understanding of myriad aspects of the organization’s people
competency. These analytics can eventually provide real-time information on ways to manage
new projects and also cater to the dynamic changes in processes and technologies.
People Innovation is intricately linked to Process Innovation. In the next section we shall
explore how process innovation actually rolls out.

6. 6 | P a g e
Figure 5: Some areas in which process innovation can take
place
INNOVATION IN PROCESSES
Process innovation is a relatively complex
subject because every stage — right from
people management to technology
engineering — contains processes that are
intricately linked to one another. Every small
change in the services industry, technology or
customer expectations mandates that the
processes be modified.
For process innovation the first step is to
gather the experience on processes from
diverse projects. Once fed into a system the
process-related experiential knowledge can
be derived and fed back into existing
processes, so as to make them efficient. This
is a continuous activity and is ingrained into
the very character of service organizations
willing to stay ahead of the race.
Process innovation, therefore, is a continuously shifting goalpost. Organizations can devise
systems to measure efficiency of processes w.r.t. their ability to save costs, shorten delivery
cycle, and embrace new developmental changes. The structure of the process system can be
best defined by process experts so as to meet the goals of the organization.
Innovation in processes is intertwined with changes in the technological landscape. In the next
section we look at the dynamics of technological innovation.
Key Aspects of Process Innovation
Requires continuous mapping of processes
Gets enriched with experiential knowledge
Is unique to organizations and is best defined by process experts

7. 7 | P a g e
Figure 6: The technological innovation cycle
INNOVATION IN TECHNOLOGY
Technology is the third component that completes the innovation triad. In terms of
significance many experts opine that technology is the most significant element in service
companies since technological changes drives customers to offshore in the first place.
Processes and people innovation, they feel, align themselves with technological innovation.
But this is just a myopic perspective.
In product companies, technological challenges are
well-defined and known beforehand. Service
companies have no such luxury and have to deal with
a plethora of technological challenges as and when
they appear.
Speed is the fundamental cornerstone in
technological innovation. Technological leadership
therefore is vested on the speed at which
technologies are learnt, adopted, implemented and
extended. It is this speed of adoption that
distinguishes ordinary service players from
extraordinary ones.
Like people and processes, the technological roadmap and the possible innovation should be
managed through a very structured system. IT Service players should devise techniques and
systems to scan the technological landscape and prepare a readiness matrix for all current and
future technological challenges. All the collective knowledge gathered through experience and
market intelligence should then be fed into a system. This system, when fed with collective
knowledge, in turn, will help gather rich analytics on the organization’s technological
competency. It will provide ready understanding on the entire technological landscape and
empower organizations to meet emergent challenges in the IT Services space.
Some Techniques of Scanning the Technological Landscape
Map existing projects in the organization
Gather customer’s feedback and insights on competitor’s technology
Technology Seminars and Events

8. 8 | P a g e
Figure 6: How the Centralized innovation delivery system works
THE INNOVATION DELIVERY SYSTEM
All the three innovation systems related to People, Processes and Technology finally converge
into a centralized innovation delivery system. This system assimilate knowledge from all the
three systems and delivers Just-In-Time innovation-centric analytical information. This
information helps organizations for new customer projects or to meet the challenges of the
future. In doing so, the system takes into account the distinct complexities of IT services such
as hybrid offshoring and global delivery needs.
How does the innovation delivery system work? The analytics gathered on people, processes
and technologies amalgamate and forms a rich innovation repository. When customers
approach service companies for projects that carry new dimensions and contexts, the
innovation repository serves as a ready reference and provides them with rich analytics on its
innovation in the People, Process, and Technology triad.

9. 9 | P a g e
The innovation system can be an emergent artifact, which means that it constantly evolves
with time. The real-time analytical information helps to cut down on time lags and also serves
as a ready reference for sustaining the organization’s engineering excellence, quality
improvements, and swift assimilation and deployment of new knowledge.
Managing such a holistic innovation system requires organizations to invest in specialized and
dedicated teams. Such teams can guarantee the innovative-readiness of organizations and
ensure that the collective knowledge does not go waste; but contributes to the overall growth
of organizational leadership.
CONCLUSION:
Innovation is central to organizations operating in the IT Services space. In an increasingly
competitive marketplace, it is only through innovation that IT Service organizations can stay
afloat, remain significant, and future-ready. However, despite its significance, sustaining
innovation in IT Services is not an easy task. It requires more than just the will to innovate.
Service companies can ensure innovation-readiness by delineating innovation across the
People, Processes and Technology (PPT) triad. Information on each of these areas can be
gathered in respective systems. The knowledge assimilated in these three areas can be
collated in a centralized ‘Innovation Delivery System’. This centralized system can serve as an
engine and provide rich, real-time analytics, to help organizations deliver innovative solutions
to its global customers.
A structured approach to innovation can help organizations to effectively manage the
challenges of technological obsolescence and other emergent project-centric complexities.
Embracing such a holistic innovation framework is a compulsion for organizations today, if
they wish to take on the challenges of tomorrow.

10. 10 | P a g e
ABOUT THE AUTHOR:
Asim Chowdhury is the Global Head of Marketing and Communication of the R Systems Group.
He has more than 15 years of experience in marketing, communications, business strategy,
journalism, and research. Asim earned a Ph.D from the Delhi School of Economics, Delhi
University, and has also been a European Union research scholar under the Indo-European
research program.
ABOUT R SYSTEMS
R Systems is a leading OPD and IT Services company, which caters to Fortune 1000, Government, and Mid-sized organizations,
worldwide. The company is hailed as an industry leader with some of the world’s highest quality standards, including SEI CMMI Level 5,
PCMM Level 5, ISO 9001:2008, and ISO 27001:2005 certifications. With a rich legacy spread over two decades, we generate value that
helps organizations transcend to higher levels of efficiency and growth. Quite like the Oyster delivering the Pearl.
For more information, visit www.rsystems.com
© 2014 R Systems International Limited. All Rights Reserved.
All content/information present here is the exclusive property of R Systems International Ltd. The content/information contained here is correct at the time of
publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior
written permission from R Systems International Ltd. Unauthorized use of the content/information appearing here may violate copyright, trademark and other
applicable laws, and could result in criminal or civil penalties.
Email: rsi.marketing@rsystems.com | Phone (India): (+91) 120-4303500 | Phone (US): (800) 355-5159