Indian innovation is for the CFO; not for the

customer
 
TK Arun, Editor, Economic Times, Opinion, raised a question at the recent edition of Epicentre,
the seminar on growth opportunities for India Inc, organized by Times Grey Cell. Arun cited the
example of Apple Inc, which engages itself in path breaking software development and design,
out-sources the manufacture of beautiful products to Taiwanese and Malaysia . companies and
then splurges on branding and marketing worldwide for its latest product.

The monetary value created from this exercise is added to the bottomline of Apple Inc and in a
small way to the companies manufacturing the product in Taiwan and Malaysia. Arun's question
was: does this have a parallel in India? Has a single Indian company achieved something
similar? Is there innovation in India, which matches this standard?

Well, Arun was of the opinion that there wasn't. However, Richard Rekhy from KPMG replied
that innovation was rife in India industry and the best example was that of Airtel asking vendors
and suppliers to share costs till the money rolled in from users. "The argument may exist," he
further explained, "that if the business model had not been successful, Airtel would not have
taken off the ground." However, Rekhy clearly felt that this was the best example of innovation
in India that he could offer.

This precisely is the sad state of affairs in Indian industry. The tragedy is not that there is no
innovation, the tragedy really lies with the fact that Indian industry thinks ways of making more
money and adding to the kitty is what innovation is all about.

If an employee had come up with a plan to create a path breaking design and software code
which would have resulted, 10 years of software development and $300 million later, come up
with something as good as the Gillette shaver, the Intel chip, the iPad, the digital camera, the
digital thermometer etc, he would have been dismissed by Indian industry as a guy who is intent
on spending the company's reserves, which have otherwise been kept safe to buy either plant and
machinery or the chairman's new car.

The sadness emanates from lack of understanding of innovation by senior people in Indian
industry who still feel that cost cutting is another name for innovation .

Credit goes to the guy who has come up with a way to jackknife his colleagues' demand for a
new chair, rejected requests for a new laptop, cut down in-house budgets for offsite get-togethers
by employees and forced people to use old and outdated software. That man is worth keeping as
he innovates to add to the topline.

In Genpact, an employee had been rewarded for reducing a page off the reporting sheet which
saved tones of paper but an employee's request for time off to develop a software to track
versions of MS word documents to reduce confusion was rejected as it would not result in
immediate savings.

India's business chambers which are the voice of industry to the policy makers still use the MS
Excel spreadsheet to take care of data. Their mailers are sent individually and manually and the
bounced mails are tracked one by one and reported.

In these areas, innovation would not be welcome unless one can show a pie-chart of per rupee
spent against per rupee gained at the lowest level of operations.

Intel spends extensively into its academic programmes where they fund laboratories for students
of Indian technical elite universities . These students cut their teeth on Intel technology and
recommend the same when they aspire to become chief technology officers in top rung
companies.

Intel and AMD does not need to create cutting edge technology in the market as their old tech
products sell as well as the new ones. However, they still spend time, energy and money on
innovation not just to butter up the CFO's interests but also to create path breaking technology
for the customer.

In the Indian scenario, the CFO's interests are the centre of attention while in global companies it
is the customer who takes centre stage.

One instance of putting the customer centre stage has definitely come from a company, which
surprisingly services CFOs and their teams. It is Tally, the product and the company, which has
always taken feedback from its customers to develop new models.

The latest product Tally ERP 9.0i is an online product where a CFO can maintain his global data
on his wap enabled mobile phone. This company had no need to develop this product
considering its wild fan following in the accountant's world. However, it went ahead and
launched the ERP scoring one up on Oracle accountancy module and the SAP finance module.

Incidentally, Tally has also never conducted raids with NASSCOM's help in combating piracy of
Tally's earlier versions. Bharat Goenka, the chairman cum managing director of Tally considers
the users of the pirated software using the unofficial trial version of his company's software who
are bound to later convert to the official version.

Jack Philby (on headline) invented the integrated circuit which ultimately led to reduced costs for
electronic circuits. When asked why he could achieve it when no one had even thought about it,
he replied, “I could invent it maybe because I was not an electronic engineer.”
--
Regards