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 BUSINESS
INNOVATION
AND ICT
STRATEGIES
SRIRAM BIRUDAVOLU AND BISWAJIT NAG
Business Innovation and ICT Strategies
 Sriram Birudavolu • Biswajit Nag

Business Innovation
and ICT Strategies
Sriram Birudavolu Biswajit Nag
Sr. Vice President - Information Indian Institute of Foreign Trade
Sciences New Delhi, India
T-Hub Foundation
Hyderabad, India

ISBN 978-981-13-1674-6    ISBN 978-981-13-1675-3 (eBook)

https://doi.org/10.1007/978-981-13-1675-3

Library of Congress Control Number: 2018953332

© The Editor(s) (if applicable) and The Author(s) 2019

This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights of
translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and retrieval,
electronic adaptation, computer software, or by similar or dissimilar methodology now
known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information
in this book are believed to be true and accurate at the date of publication. Neither the
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publisher remains neutral with regard to jurisdictional claims in published maps and
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Cover credit © kynny/iStock / Getty Images Plus

This Palgrave Macmillan imprint is published by the registered company Springer Nature
Singapore Pte Ltd.
The registered company address is: 152 Beach Road, #21-­01/04 Gateway East, Singapore
189721, Singapore
 Preface

Yat Bhavo Tat Bhavati (You Become What You Believe In)
Hence your reality is shaped by your beliefs and understanding.
—Sanskrit Saying

Consider a typical current day scenario.

A mid-sized information technology services company has dozens of
small- and mid-sized enterprises as clients, spanning many sectors—
finance, health, logistics, academia, government departments, non-profit
organizations, media, and so on. The IT company finds itself in the eye of
the proverbial storm of the Information Age.
Each client has unique and changing requirements, owing to new excit-
ing business models launched every month which solve interesting prob-
lems in the industry. Being deep into the Information Age, everything
from entertainment and fun to customer support, consulting, and busi-
ness seem to lean 100% on information and communications technology.
Data pours in 24/7 for every source, from websites, mobile applications,
desktop applications, bank ATMs, and IoT (Internet of Things) devices.
Putting it mildly, the IT company and its clients are finding it rather dicey
to keep pace with the changes in technology and business.
The design and software changes are taxing them to the hilt. Data secu-
rity is a constant nightmare. There are threats, round the clock, of hack-
ing, malware and exploits, and a few actual incidents as well. The underlying
technologies in the server software and hardware are getting more com-
plex by the day. And the demands for high performance, 24/7 availability,
and instant access to every kind of data seem to be rising incessantly.

v
vi PREFACE

Technical expertise seems to be in constant shortfall. Budgets are very

tight. There just aren’t enough technical people to send to clients’ places
to understand and resolve the network (firewalls, core and secondary
switches, Wi-Fi networks), hardware, and software problems. Regulatory
compliance demands that each client meet architectural standards, main-
tain records, and meet data and transactions security and privacy standards
for its end-customers.
How can an IT company not only crack these problems but also ride
the changes and profit from them?
The IT company strategically attacks the problems with the following
solutions:

• Get the clients to move their data to the cloud, that is, the IT com-
pany’s data centers, thereby managing in one place, security, scalabil-
ity, redundancy, and 24/7 availability.
• Remotely manage the clients’ websites, portals, and mobile apps from
an NOC (network operations center) and the security through an
SOC (security operations center).
• With remote access to the clients’ infrastructure (networks and serv-
ers), manage them remotely over a secure VPN connection, thus cut-
ting 99% of the travel costs.
• The IT company’s data centers reside in several cities, and they’re all
interconnected. So, the experts from any of the centers can connect
to any of the clients all over the country and resolve problems. The
problem of shortage of experts is solved, and their utilization improves.

With these in place, the next innovative steps through which the IT
company can offer superior services are:

• Predicting IT problems intelligently from the trends and typical pat-

terns, automating the model building, and taking preventive steps,
and using data to validate and improve the models.
• Helping clients improve their services with their end-customers, with
big data analytics, machine learning, and AI. For example, if the
transaction traffic peaks in certain months, then add server capacity
or catch fraud when the machine learning catches outliers.
• Mining the web-traffic data or mobile download patterns, AI tools
can detect which type of visitors visit a client’s website, how often,
and from where (as IP addresses can reveal geography). The company
 PREFACE vii

can suggest to the clients to serve up different content based on these

variables, thereby improving the accuracy of targeting and reach.
• Build a repository of patterns for each area, from cyber-security to
every client sector, develop a center of expertise, and recommend
best practices and policy to the industry and regulatory bodies.
Develop a high-end consulting practice and move up the value chain.
• Deploy state-of-art IT infra products to manage the bulk of the
operations autonomously, including monitoring, optimizing, trou-
bleshooting, auto-correction, and self-healing but also fault detec-
tion and resolving issues instantaneously.

Note that each of these innovative steps doesn’t just solve problems,
but they increase value and brand name, decrease costs and manpower,
and lead to future growth for the IT company and its clients.
What is innovation? Let’s start with a simple notion that you often
know innovation when you see one. You can perceive innovation in
uniqueness, whether manifest or subtle, in an element or in the blend, in
the display or in the force, in the arrangement or in the essence, in the
action or in the effect, in the grandeur or in the simplicity, in brilliance or
in repose, in puissance or in stillness, in isolation or in association.
The myriad examples of outstanding innovation at work show that it is
indeed possible, and this book will share with you the secrets of using ICT
to create innovations. Yet, they are uncommon, and failures are many.
There are great obstacles. The general disquiet that pervades the milieu
stems from the confusing mix of elements, vigorously at play. The effects
of ICT are all-pervading, and while the boons are many and mostly evi-
dent, jeopardy lurks at every corner. The triumphant organizations have
crossed many difficult passes and have undertaken incalculable risks to
achieve remarkable levels of success. It need not be so galling.
Opportunities abound everywhere, and creativity knows no bounds.
ICT can and is being applied in eliminating labor, in communication
(“geography is history”), in entertainment and the arts, in imbuing sys-
tems with intelligence and diligence, in multiplying power and efficiency,
and in fine-grained analysis and synthesis. Why does it seem so difficult to
realize value, then? For each success story, there seem several that have
failed.
ICT has become astoundingly powerful and staggeringly complex at
the same time. Enterprise investments in ICT are a leap of faith, in terms
of the known and unknown risks undertaken. Both enterprise providers
viii PREFACE

and enterprise consumers of ICT are caught in a tsunami of change that

has swept away many businesses, both old and new. It is essential now to
future-proof an organization’s vision, strategy, and implementation for
using ICT as an enabler, catalyst, and differentiator. The symbiotic process
between the development of IT systems and the requirement of a modern-­
day organization has motivated us to think through to unfold this rela-
tionship and hence writing this book.
This book is devoted to the real process of unleashing the power of ICT
and harnessing it for all future. It is intended to be a practical guide that is
used on a daily basis. The book will cover all important aspects of ICT in
a nutshell and show the path to the future through innovation.
What is the key to leveraging ICT for success in business for individuals,
leaders, and organizations? Many answers come to mind, particularly
ICT’s amplified ability to serve customers by providing outstanding prod-
ucts and services and creating high value and doing it in ways that are
effective, efficient, profitable, competitive, and valued.
How does one establish a business focus with ICT in mind? This is a
key precursor to establishing an ICT strategy and is covered well in this
book.
This book presents a lean and coherent framework distilled from years
of research and experience in the ICT industry and business strategy
development which captures the essence of some of the best practices used
in the business, founded on a contemporary theoretical basis. What unites
the different elements of the framework is their proven power and potency.
Not only are they insightful and useful, but they have worked, often bril-
liantly and despite great adversity. The framework is built around these
ideas and is based on Sriram’s PhD thesis and key principles laid down in
other industry-proven standards. The framework is enriched with Biswajit’s
long experience in research in the areas of economics of firms and business
strategy development, especially his expertise in analyzing firms’ behav-
ioral change in a dynamic world. Open innovation, the quadruple helix
model of innovation, enterprise architecture, ICT industry standards, reg-
ulatory environment, and the relevant firm theories are the cornerstones
of the book. The process that runs the framework is driven by the themes
of focus, integration, competition, regulation, change, and innovation.
The quadruple helix model involves collaboration with four different
players—partner firms, research institutes, government agencies, and the
users. Open innovation is about using external ideas that originated outside
the boundaries of the firm as well as letting other organizations use some of
 PREFACE ix

the firm’s ideas. External and internal economies of scale drive the firm in a
competitive dynamic business environment. For the purposes of this book,
the related concepts of open innovation, co-creation, network innovation,
and collaboration have been clubbed into the term open innovation.
The first chapter, the Introduction: Unfolding ICT, lays the ground-
work for the book. It also dispels any illusions that ICT is just another
sector and the recent advances, a temporary development. ICT is the zeit-
geist. The increasing bond between ICT and innovation has practically led
to their fusion in many forms.
The second chapter, The ICT Tsunami and Your Future, while being
cautionary, brings out the essence of the sweeping waves of changes pre-
cipitated by ICT and the innovations in its wake, some of them transform-
ing ICT itself. The third chapter, Every Organization Is a Complex ICT
System, is a continuation of the second and shows how every organization
is ICT driven and why we need an “ICT lens” for looking at the modern
and future landscapes of industry and society.
The fourth chapter, The Enterprise Technology Landscape, delves a little
deeper into ICT itself, to get a clear understanding of the components and
forces, and of how organizations and people are using it. Taming the wild
forces of ICT needs strong governance, and this is also discussed.
It is easy to lose oneself in the immense complexity and the ever-­shifting
mess. The fifth chapter, Finding Business Focus with ICT, emphasizes the
value of Focus for survival and growth, in this unbelievably turbulent eco-
system. It also shows a clear path to achieving and sustaining focus.
The sixth chapter, The Innovation Strategy, prescribes the essential
ingredients required for formulating an effective ICT-based innovation
strategy. This is based on vast research, industry experience, and evalua-
tion of business trends.
Without the right people and culture in an organization, strategy is
practically useless. The seventh chapter, Social Capital: The Innovation
Culture, deals with the very important subject of developing the right
culture in an organization to foster and turbocharge innovation.
Strategies and culture differ from region to region. The eighth chapter,
Regional Factors Influencing Innovation, describes how an organization
should factor in regional issues for developing a strategy for a region.
The ninth and tenth chapters focus on India. The ninth chapter talks
about the current state of the ICT sector in India, a bit of regulatory envi-
ronment, and some of the emerging issues India is facing internationally.
The tenth one describes the evolving regulatory scene.
x PREFACE

The eleventh chapter comprehensively sums up the ways in which to

Win the Competition with Innovation.
The book drives home the concepts through apt mini-stories and anec-
dotes from the industry and attempts to develop an action plan on how to
apply the relevant part of the framework. The framework and process
emphasize Peter Drucker’s point that great ideas and decisions are a blend
of intuition and rigorous analysis.
The genesis of the book goes back to the days when both the authors
had animated discussions regarding the ultimate use of a doctoral thesis for
the people at large who wanted to know the dynamics of ICT and how it
was useful for strategizing the business. The intense discussion on the
brewing idea finally moved us to take the plunge in writing this book. The
head of ICRIER, Rajat Kathuria, prompted Sriram also to convert the
content of the PhD thesis into a book. Finally, it has become a joint prod-
uct bringing the wisdom of two authors: experience of the ICT industry
and research on business dynamics and strategy. The discussions with vari-
ous experts and colleagues in India and abroad were extremely useful. It is
difficult to thank all of them for their valuable insights on the topic.
Nonetheless, the rich contribution is acknowledged with profound thanks.
We would like to especially thank the faculty at the Indian Institute of
Foreign Trade. Their support and inspiration have pushed us towards the
early completion of this book. Professor O. P. Wali has been of tremendous
help in being both a source and a sounding board for several ideas. Sriram
would like to thank the management and colleagues (too many to name
here) at Oracle Corporation and its customers and partners, for their valu-
able expertise and help during the time he was working with Oracle
(2008–2017) in the Global Communications Business Unit. He gained
much experience and many insights into the ICT and innovation during
this period. Sriram is grateful to the colleagues and the management team
at T-Hub foundation and the Director General of RICH, Ajit Rangnekar,
for the valuable knowledge that they shared about startups, accelerators,
startup ecosystems, and research forums and for the permission to use
materials from T-Hub and RICH in this book. The market research ana-
lysts at T-Hub, Sandhya Kanukollu and Abhineeta Raghunath, have con-
tributed significantly to the chapter on T-Hub, and Dr. Maneesh Kunte
provided material on RICH. Sriram is also indebted to his family, particularly
his wife Sivani, for putting up with his research and book writing for hours
and days on end. Biswajit is also appreciative of his executive students who
 PREFACE xi

brought up lively discussions in the classroom on ICT and international

business. Many of them are with startups or MNCs and trying to grapple
with the speed of technology and its impact on business. The inputs helped
us put the issues together, frame the chapters from the users’ point of view,
and identify the “Key Take Away” from each chapter. Biswajit is also
thankful to his wife Bansari for her intelligent comments on some chapters
and her ideas on the overall theme. We are also especially thankful to
reviewers and our publisher for encouraging us to take this book project
forward. We are indebted to many scholarly works and referred them
wherever possible. As we submit our manuscript, we remain solely respon-
sible for errors and omissions.

Hyderabad, India Sriram Birudavolu

1st July 2018
New Delhi, India Biswajit Nag
 Praise for Business Innovation and ICT Strategies

“If you don’t have a good innovation process, you have an idea graveyard. Business
Innovation and ICT Strategies is a practitioner’s handbook that reveals the secret
behind the new idea economy.”
—Vish Nandlall, Head of Emerging Technology and Ecosystem
Development at Dell EMC, Ottawa, Canada

“Excellent congruence of ideas and practical methodology to harness the power of

ICT to compete in a hyperconnected world. Highly recommend this book by Dr.
Sriram Birudavolu and Dr. Biswajit Nag for organizations that struggle with inter-
nal lack of grasp in how the ecosystem is shaping up.”
—Pavan Malladi, Head of Governance, Strategy and Execution Excellence,
Philips, Netherlands

“Happy to announce that Dr. Sriram Birudavolu has just released his new book
Business Innovation and ICT Strategies showing that the key to survival and growth
for organizations is focus, innovation and creating value-webs at every level—from
service delivery to building new business models.”
—Tony Poulos, Managing Editor, Disruptive Asia

“I am confident this book will be incredibly useful not only for the MNCs but also
for organizations in the informal sector who seek to thoroughly modernize and
revamp their business, such as managing supply chain, improving quality and re-
vitalizing human resources.”
—Pawan Agrawal, CEO of Mumbai Dabbawalas

“Just finished a book titled Business Innovation and ICT Strategies by Sriram
Birudavolu and Biswajit Nag. The authors used very simple, easy to understand
stories and anecdotes to explain complex issues like Innovation, Enterprise
Architecture from the prism of Business Value. A must read for professionals who
wish to innovate in ICT while understanding the nuances of theories of econom-
ics. Happy reading!”
—Bharat Anand, Chief of Technology, Ministry of Home Affairs,
Government of India

xiii
xiv PRAISE FOR BUSINESS INNOVATION AND ICT STRATEGIES

“The dramatic advances in technology have created huge and untapped opportu-
nities to improve almost every facet of life and society. The barrier to capturing
these opportunities is no longer the cost or availability of technology, but people
and organizations. Business Innovation and ICT Strategies provides a practical set
of ideas and frameworks for both enhancing innovation to identify value from
technology and stimulating adoption by organizations. The book also recognizes
the reality that adoption is increasing a multi-party ecosystem across companies,
partners, and others.”
—Eric Simonson, Managing Partner of Research, Everest Group

“Business Innovation and ICT Strategies is a very timely and relevant book which
will help enterprise leaders as they embark upon the journey of Digital
Transformation. The book provides very practical and easy to implement ideas and
strategies to use Information and Communication Technologies (ICT) to digitize
all aspects of the working and operations of an organization. The suggested frame-
works are based on years of solid research by the author and backed by theoretical
concepts. It demonstrates how to use Open Innovation and Quadruple Helix
model to drive and implement ICT for deriving desired Business Outcomes.”
—Vinod Sood, Managing Director, Hughes Systique Corporation

“A book which completely encapsulates the expertise and experience which the
authors possess—an absolute amalgamation of industry and academia … a must
read for all those who desire a comprehensive framework and a strategy for orga-
nizations and individuals related to ICT and Innovation.”
—Yajulu Medury, Director, Mahindra Ecole Centrale

“Business Innovation and ICT Strategies by Sriram Birudavolu and Biswajit Nag is
a rare piece of distilled practical ICT knowledge embedded in the open innovation
framework that blends well with Agile principles. Agile breaks down organiza-
tional silos, Open Innovation (OI) takes this further by breaking down cross orga-
nization silos itself and promoting collaboration between organisation and
customer and not the least also include the academia sector. The book however
does not stop with the easier, less painful ‘inbound’ innovation stream, who would
not like new ideas flowing into his organisation, but makes a real effort addressing
the need to have a consistent outbound innovation stream in order to address the
need to fertilize the ground for innovation. The authors exhibit a clear vision that
could become one of the cornerstone pieces in the disruptive world especially in
combination with distributed ledger (blockchain) incentive models that might be
the missing piece to address the problem of IP/Knowledge ownership.”
—Roland Pfeiffer, Former Head of New Technology and Service Flows,
Celcom Axiata Berhard
 PRAISE FOR BUSINESS INNOVATION AND ICT STRATEGIES xv

“With the digital transformation in full swing, Birudavolu and Nag’s book clearly
describes why and how to harness ICT to increase competitiveness and innovative-
ness. His findings are seminal and practical, and a must read for leaders on their
journey to create and capture value in innovation ecosystems.”
—Dr. Daniel Fasnacht, Founder/CEO, EcosystemPartners Ltd.,
author of the book Open Innovation Ecosystems, Former CEO/Managing
Director of Swiss Banks and Financial Institutes—Julius Baer,
Kaiser Partner, Tom Capital, VP in Credit Suisse

“ICT emphasizes the importance of the media in the use of information technol-
ogy, that should be considered through a social, behavioral and environmental
approaches. Being in the forefront of meeting technology disruption, on a daily
basis, in many countries worldwide, I find Dr. Sriram Birudavolu’s book to be of
value and importance to for doers, customers and decision makers, to get up close
and personal with ICT impact and its effects through open innovation and other
practical means. Enjoy.”
—Tal Catran, Accelerators Guru & International Keynote Speaker,
Start-Up Ecosystem Builder, TEDx Speaker, Israel

“Business Innovation and ICT Strategies is an enlightening book written by Dr.

Sriram Birudavolu & Biswajit Nag. The book focusses on the real process of
unleashing the power of ICT and harnessing it for future and the best part is that
it can be referred daily to further your strategic and tactical actions around busi-
ness innovation using ICT’s disruptive power. The frameworks in the book are
backed by rich research which is visible when you are able to create an action plan
after every chapter using those frameworks. It is definitely a must read for business
leaders and ICT professionals.”
—Puneesh Lamba, Group CIO, CK Birla Group, India

“Innovation and Digital Transformation propelled by new developments in ICT

will determine the survivors and winners in the coming decade. Dr. Sriram
Birudavolu’s experience driving innovation ground-up and his methodology for
companies to adopt this is an essential read for the future industry leaders”
—Vijay Pullur, Co-Founder, Pramati Group, and Serial Entrepreneur
 Contents

1 Introduction: Unfolding ICT    1

2 The ICT Tsunami and Your Future   13

3 Every Organization Is a Complex ICT System   39

4 The Enterprise Technology Landscape   63

5 Finding Business Focus with ICT  117

6 The Innovation Strategy  141

7 Social Capital: The Innovation Culture  185

8 Regional Factors Influencing Innovation  211

9 The State of the Indian ICT Sector  239

10 India’s Regulatory Environment and Response to

International Trade Issues  275

xvii
xviii Contents

11 Winning the Competition  313

12 Fostering Innovation Culture and Exploiting Social

Capital: The Cases of T-Hub and RICH  339

Glossary  351

Index  355
 About the Authors

Sriram Birudavolu is Senior Vice President and Head of Information

Sciences at T-Hub Foundation, India’s largest hub for technology start-
ups. He also runs the market research program at T-Hub. With over 24 years
of experience in the ICT/telecom industry, he is a C-Level advisor and has
worked on four continents in over a dozen countries, with reputed orga-
nizations, such as Oracle, Hewlett-Packard, Verisign, and Siemens. His
areas of interest are business and technology innovation, ICT, IT, and
telecom and enterprise architecture. He holds a PhD in international busi-
ness from the Indian Institute of Foreign Trade (specializing in open inno-
vation in ICT), a master’s in computer science, and a bachelor’s degree in
electrical engineering. He is a TOGAF certified enterprise architect and a
certified PMP (project management professional). He has also published
and presented papers in international journals and conferences and has
delivered guest lectures in academic institutes and companies. Currently,
he is an academic advisor to Mahindra Ecole Centrale Engineering
College, Hyderabad, Indian Institute of Foreign Trade, Delhi and
University College of Engineering, Osmania University, Hyderabad.
Biswajit Nag is Professor of Economics at the Indian Institute of Foreign
Trade (IIFT), New Delhi. Involved in empirical economic research for
close to two decades, he also has teaching experience in India and abroad.
Earlier, he served the Poverty and Development Division of UN-ESCAP,
Bangkok. Dr. Nag has completed a number of projects for the Government
of India and international agencies such as the UN, World Bank, Asian
Development Bank, WTO, DFID, and the EU. His current research

xix
xx ABOUT THE AUTHORS

interests are trade and technology, international production network,

global value chain, trade in services (including IT-enabled services), and
so on. Dr. Nag is one of the advisors on global value chains at the Asia-
Pacific Research and Training Network (ARTNet), UN-ESCAP. He is an
active member of GERPISA, a Europe-based international automobile
research network. Dr. Nag teaches international economics, global busi-
ness environment, and econometrics at IIFT and provides his consultancy
and advices to firms and government agencies on international market
access and strategic issues.
 List of Figures

Fig. 1.1 ICT and innovation (Note: The above diagram is modified from
the innovation structure described by Afuah 2003) 7
Fig. 1.2 Structure of the book 10
Fig. 2.1 ICT strategy: opportunities and challenges 33
Fig. 3.1 Technological change and sustainability with new products
(Source: Authors’ own creation based on various sources and
ideas discussed in Roberts Edward B (2002). Innovation:
Driving Product, Process, and Market Change, MIT Sloan
Management Review, published by Jossey-Bass, San Francisco,
and Afuah Allan (2009), Strategic Innovation: New Game
Strategies for Competitive Advantage, Routledge, New York) 45
Fig. 6.1 Familiarity of technology and market: driver for open
innovation (Source: Modified from Fig. 2.8, in Innovation
Management: Strategies, Implementation and Profits by Afuah
2003)145
Fig. 6.2 Pattern of strategic shift (Source: Modified from Exploring
Corporate Strategy: Text and Cases by Gerry Johnson and
Kevan Scholes; Sixth Edition, Prentice Hall of India, 2002) 146
Fig. 6.3 Business fit and innovation strategy (Authors’ own creation
based on the Exhibit 6.11 from Exploring Corporate Strategy:
Text and Cases by Gerry Johnson and Kevan Scholes; Sixth
Edition, Prentice Hall of India, 2002) 147
Fig. 6.4 Analytic value escalator (Source: Intelligencia Limited,
Intelligencia (2018)) 151
Fig. 6.5 Open innovation depiction (Source: Chesbrough 2003) 154
Fig. 6.6 Summary of the basic model (Source: Birudavolu 2015) 173

xxi
xxii List of Figures

Fig. 6.7 Depiction of the extended model (From the author’s PhD
research, Birudavolu (2015)) 178
Fig. 8.1 The “flying geese” pattern in Asian economies (Adapted from
Kojima, K. (2000): The “flying geese” model of Asian
economic development: origin, theoretical extensions, and
regional policy implications; published in Journal of Asian
Economics, Volume 11, Issue 4, Autumn 2000, pp. 375–401) 214
Fig. 8.2 Innovation and global strategy: role of ICT (Source: Adapted
from Afuah 2003) 216
Fig. 8.3 Downstream movement of innovation process,
internationalization, and open innovation (Source: Modified
and Adapted from Gerybadze 2006) 218
Fig. 11.1 The alliances framework (Source: adapted from Roberts 2002) 328
 List of Tables

Table 2.1 The major shifts summarized 18

Table 2.2 Global crisis list since the year 2000 (major ones only included) 20
Table 3.1 Promising fields for careers 53
Table 4.1 Applications and technology for IoT/M2M based on
geographical spread vs. mobility 64
Table 5.1 The process of building the business focus 119
Table 6.1 Three pillars of strategic management 144
Table 6.2 Details of the kinds of analytics 151
Table 6.3 The dimensions of ICT innovation strategy 153
Table 6.4 The dimensions of ICT strategy: classified based on the size
of collaborators 166
Table 6.5 Classified based on investors 167
Table 6.6 Classified on a geographical basis 167
Table 6.7 Classified based on commercial/non-commercial interests 167
Table 6.8 Classified based on Telco and non-Telco organizations 167
Table 6.9 Parameters to rate the open innovation ICT forums 168
Table 6.10 Innovation matrix 169
Table 8.1 Economic, technology, and livelihood indices to understand
regional differences 221
Table 8.2 How regional factors power innovation 234
Table 10.1 List of agents, activities, and policies to promote innovation
culture278
Table 10.2 Demand and supply side of regulatory structure of
innovation and technology products 278
Table 10.3 Product coverage under ITA-I in general terms 306
Table 11.1 Alliances checklist 329
Table 11.2 Telco’s transformation journeys mapped 335

xxiii
 CHAPTER 1

Introduction: Unfolding ICT

Sahase Srih Vasati (Luck dwells in the best of one’s endeavor).

—Sanskrit Saying

1.1   The ICT Phenomenon

Information and communications technology (ICT) is permeating and
transforming every sphere of life, including commerce, education, health-
care, governance, agriculture, manufacturing, banking, defense, media
and entertainment, logistics, travel, tourism, and so on. Organizations
such as the World Bank and the Asian Development Bank have noted that
telecommunications is now essential to a country’s economic develop-
ment and competitiveness. As per a World Bank Report, a 10% increase in
the speed of high-speed Internet connection has been found to increase
economic growth by 1.3% (Minges 2016).
Attractive as all this may seem, the forces unleashed by ICT are in fact
so powerfully disruptive and rapid that organizations not only struggle to
harness the potential of ICT but are also getting run over by the change,
complexity, and competition. Complex regulatory structures in various
countries and the trade dimension (such as service and manufacturing
interdependence through equipment and software interface) have added
their own obstacles in the path of harnessing ICT’s potential benefits.
Where does one start? Not surprisingly, with the psyche.

© The Author(s) 2019 1

S. Birudavolu, B. Nag, Business Innovation and ICT Strategies,
https://doi.org/10.1007/978-981-13-1675-3_1
2 S. BIRUDAVOLU AND B. NAG

A shift in mindset is crucial not only to deal with these disruptions but
also to exploit them and thrive towards greater successes. The shift in
mindset is all about moving away from security and stability towards resil-
ience. In contrast to the former approach which is more risk-averse, the
latter indicates an acceptance of the inevitable reality that there will be
shocks and disruptions and prepares for them, and hence actively engages
in experimentation and risk-taking. It is a far more opportunistic and
entrepreneurial outlook.
The opportunities and disruptions are equally immense. It is imperative
to take a closer look at both.
The global mobile devices and connections worldwide today exceed the
world population (7.25 billion). The mobile phone penetration is more
than 90% and several people own multiple subscriptions.1 In comparison,
the PC penetration stands much lower at 20%. The total cost of comput-
ing processor power, bandwidth, and storage continues to drop (roughly
halving each year), and newer, more efficient standards of network tech-
nology are continually being implemented.
All these have effected radical changes in the ICT landscape. Read care-
fully through the sweeping list. Each of these represents opportunity as
well as disruption, depending on your point of view.

1. In Services and Business Models: immersive user experience including

AR/VR/XR, digital services, digital marketing, analytics, big data,
automation, enterprise architecture, microservices, open innova-
tion, crowdsourcing, social media, e-commerce, and so on
2. In Mobile Networks: mobile broadband, 3G, 4G/LTE, 5G, end-user
mobility (e.g. location-based services and mobile banking), enter-
prise mobility (e.g. field personnel enablement and logistics man-
agement), Telco mobility (e.g. smartphones and smart applications),
and so on
3. In Infrastructure and Data Centers: cloud computing, virtualiza-
tion, containers, and services, for example, SaaS, IaaS, PaaS, KaaS,
which mean software/infrastructure/process/knowledge as a ser-
vice, and so on
4. In Core Networks: IP networks, SIP Trunking, SDN (software-­
defined networking) and NFV (network function virtualization),
convergence (VoIP, triple/quad play), and so on

1
Ericsson Mobility Report, 2016, www.ericsson.com.
 INTRODUCTION: UNFOLDING ICT 3

5. Regulations: de-regulation, Net Neutrality, spectrum auctions, laws

related to competition and monopoly, security of data, and so on
6. Technology: platform, smart machines, 3D printing, IoT (Internet of
Things), Artificial Intelligence, Machine Learning, AR/VR/XR/
MR, and so on

Upon adopting a new mindset of resilience, the next step then is to

look at things through the lens of ICT. Every organization is a complex
information engine and hence an ICT organization. Having established
this, it is crucial to understand technology and enterprise architecture
well. The key industry trends and the technologies of interest must be
understood by everyone who plays any significant role in the organization.
Technology is really an ecosystem enabler, and it will be beneficial for
everyone to grasp this fact.

1.2   What Is ICT?

An OECD (the Organisation for Economic Co-operation and
Development) paper (Inaba and Squicciarini 2017) defines ICT as any
product or service that stores, retrieves, manipulates, processes, transmits,
or receives information electronically in a digital form. It is the conver-
gence of unified communications, telecommunication, computing, and
broadcasting industries. The older Information Technology (IT) is a nar-
rower term which usually excludes telecommunications (voice) technol-
ogy while including data networks (although almost all networks today are
digital), as a reference to the systems that support information processing.
The term Information Technology is used in a narrower sense, typically
excluding telecommunications (voice) technology while including data
networks (although almost all networks today are digital), as a reference to
the systems that support information processing.
Processing (computing power), network, and storage capacities are ris-
ing exponentially, and knowledge is becoming accessible to more people
than ever before in human history. Network effects trigger an ever-­
increasing number of people (and hence devices) to use and create
information.
We’re now into the Fourth Industrial Revolution (Schwab 2017) which
will bring a thorough and exponential transformation in the industry. To
clarify:
4 S. BIRUDAVOLU AND B. NAG

• The First Industrial Revolution was powered by steam-powered

machines to drive production.
• The Second Industrial Revolution was powered by electrical machines
in the industry.
• The Third Industrial Revolution brought in digital transformation in
the industry.
• The present one, Fourth Industrial Revolution, is about integration
and fusion of the physical, digital, and biological technologies.

Each of these industrial transformations was built on top of the previ-

ous one. Thus, the systems of the Fourth Industrial Revolution leverage
the third, digital revolution, that is, global, digital communications, high-­
speed and low-cost processing, and high-density data storage, and a vast,
digitally connected global population of people and devices.
Of the ten key emerging technologies that are among the most promis-
ing and potentially most disruptive and that carry significant risks outlined
in the OECD science, technology, and innovation outlook (Inaba and
Squicciarini 2017), four directly come under ICT (viz. Internet of Things,
Artificial Intelligence, big data analytics, and blockchain), and the remain-
ing rely heavily on ICT for their research/design/production/use (micro/
nano satellites, additive manufacturing, neurotechnologies, advanced
energy storage technologies, nano materials and synthetic biology).
Similarly, PricewaterhouseCoopers has identified eight essential technolo-
gies for the future (PwC 2016).
Artificial Intelligence, IoT (Internet of Things), VR (Virtual Reality),
AR (Augmented Reality), blockchain, robots, 3D printing, and drones.
All of these are ICT technologies.
In short, the disruptions and innovations in and driven by ICT are set
to drastically change the way firms, industries, and economies work.
The future holds tremendously high potential for the development of
individuals and organizations, due to the synergies among these technolo-
gies and also other upcoming technologies such as quantum computing,
LiFi (Light Wi-Fi), nanotechnology, bio-engineering, and so on.
The present day’s unified communications technologies such as SMAC
(social media, mobility, analytics, and cloud computing) catalyzed by
underlying technologies such as virtualization, container management,
and microservices architecture are accelerating the velocity of business by
the day, that is, speed as regards what firms can do, how they can do it, and
how quickly they can deliver.
 INTRODUCTION: UNFOLDING ICT 5

Fundamentally, ICT has magnifying power. ICT bestows on us the

capability to gather and use intelligence at a rate and level unprecedented
in history, as follows:
Collect big data from various sources, such as IoT-enabled devices, analyze
this data as rapidly as needed by using analytics, mining, AI (Artificial
Intelligence), and Machine Learning. The deep insights drawn by using these
technologies to collect, analyze, and understand data give a huge opportunity
to understand retail and enterprise customers, to fine-tune processes, cut inef-
ficiencies, redundancies and wastage, enable e-­ governance, and conduct
research and development. This entire process can happen in real-time too.
Gartner vice president Steve Prentice says that “At a minimum, the IT
organization needs to be able to design the ‘big picture’ of all the new
information and technology capabilities required to support digital busi-
ness. … Fueled by data, analytics and AI, algorithmic business will con-
tinue to grow and disrupt your business” (Gartner 2016).

1.3   ICT and Innovation

ICT spurs innovation at every stage of the lifecycle of a product or service.
For research in the academia and industry, ICT tools facilitate both fine-­
grained accuracy in analysis and massive modeling and crunching capabil-
ity to design, build, and validate complex theoretical models, by using big
data, small data, or even imperfect data. It also enables geographically
disperse teams (even crowds) to collaborate (Birudavolu 2015).
ICT helps in market research, ideation, and creation of new products
and services. During the sales process, the customer requirements can be
mapped and matched exactly to help craft solutions and proposals. With
the richness of data (even if disperse/distributed) and the network of peo-
ple and devices available to organizations, entirely fresh business models
can be conceived. Existing business models can be made sharper and com-
petitive through re-engineering.
In development and production, ICT enables seamless and agile pro-
cesses, DevOps, smooth delivery, and operations of products and services.
Exceptional quality, cost, customer experience, and other competitive
advantages are obtained.
Talent development and learning/training are made vastly easier
through guided learning with online courseware and simulations. Even
systems are imbued with artificial intelligence so that they can learn in a
supervised or unsupervised manner. This multiplies the power of automa-
tion and execution, so that the systems can function in a variety of differ-
6 S. BIRUDAVOLU AND B. NAG

ent complex environments, not merely the kind of routine scenarios that
conventional automation can handle.
In both direct and indirect ways, digital technology drives innovation
by incentivizing all players to innovate. Without even having to invent
new technologies, the markets become competitive on innovation. As per
the World Bank’s Global Information Technology Report, 2016, technol-
ogy can impact the market in the following ways (Ballar et al. 2016):

1. Increasing Market Size: Technology integrates markets through

superior, frictionless, instant, and fine-grained communication. This
makes the markets competitive. For example, online platforms on
which firms can reach a global customer base at a minimal cost.
2. Reducing Entry Barriers: Online and cloud services enable startups
and SMEs (small- and medium-sized enterprises) to launch their
businesses online at a very low cost. This reduces entry barriers and
allows scaling, thus creating a level playing field. It is essential there-
fore to retain Net Neutrality through regulations.
Mettler and Williams (2011) identify six such types of business
platforms: crowd-financing, digital utilities, professional services
marketplaces, micro-manufacturing, innovation marketplaces, and
e-commerce platforms.
Gartner (2016) identifies five major platforms of digital business
as information systems, customer experience, data and analytics, IoT
(Internet of Things), and ecosystems.
3. Acquiring and Leveraging Knowledge of Consumer Preferences: ICT
enables matching opportunities to the products/solutions, by using
big data to unearth customer needs and preferences. With customer
centricity comes a greater customer experience and higher value
delivered at a lower cost.

The importance of understanding, leveraging, and managing these disrup-

tions is hence becoming ever significant for the success of each economy,
industry, and organization.
Following Afuah (2003) innovation can be explained through a new
product or services which comprises of either new technological knowledge
or new market knowledge or both. This depends on competencies and assets
an organization possesses. A company’s ICT infrastructure, its skilled person-
nel, and tendency to develop strategies based on information available
through ICT framework and so on build up its competencies and intangible
assets which are essential for developing new product and services (Fig. 1.1).
 INTRODUCTION: UNFOLDING ICT 7

ICT
New New Market
Infrastructure
Technological Knowledge
and tools help
Knowledge
an organization
to develop
intangible assets
which can be
New Product or Services based on used for product
low cost, improved attributes and and market
new attributes exploration and
design new
Competencies and Assets possessed by an Org products
accordingly

Fig. 1.1 ICT and innovation (Note: The above diagram is modified from the
innovation structure described by Afuah 2003)

Innovation can be described in various ways with different structural

differences. The following are some examples:
Incremental vs. Radical: The experience of new firms and old incum-
bent firms adopting incremental or radical innovation is mixed. Companies
like GE an incumbent in medical diagnostic equipment industry did fairly
well in adopting radical change in technology and moved successfully
from x-rays to CAT scan to MRI. On the other hand, Intel struggled to
move from one generation to next in the chip industry. Hence, we require
more information to understand when incumbent embraces radical or
incremental technologies.
Market vs. Technical Capabilities: The literature in such cases argues
that even when a firm is not able to cope with technological capabilities, it
can still remain at the top if it has more market knowledge and capabilities
to reach customer. It may be able to remain ahead of any technologically
superior firm if it possesses better market information. This provides a
direction to understand why some firms with regular pace of innovation
are still ahead of others who have niche or radical technologies. ICT tools
are powerful to get more market information and consumer insights. This
model is popularly known as Abernathy and Clark model.
Architectural Innovation vs. Component Knowledge: A successful inno-
vation requires the knowledge of the components and the architecture of
8 S. BIRUDAVOLU AND B. NAG

linking them efficiently. An innovation can impact either of the two or

both. If the innovation brings newness in both component and architec-
ture, it is radical in nature. If more focus is on the newness of components
and bit of change in architecture, it is called modular innovation. It could
with complete focus on architectural innovation where focus is on new-
ness in architecture. Sometimes, companies take a up a gradual/incremen-
tal approach where both component and architectural knowledge is
extended. Historically, it is observed that firms may have possessed good
architectural knowledge but lack of component knowledge has inhibited
them from success in innovation. ICT or digital technology provides a
wonderful opportunity to firms to both working on architecture especially
in developing design and components as per the need of the market. We
can provide the example of Apple products in this context.
Innovation to Streamline Value Chain: Apart from product and process
upgrading, ICT tools can be effectively used for functional and inter-chain
upgrading which are an essential part of value chain streamlining. In case of
functional upgrading, companies reduce the value chain, and there may be
specialized suppliers who are ready to take charge of some parts of the value
chain, and thereby do some agglomeration. For example, a product can be
divided into different modules, and different companies manage those
modules. In case of inter-chain upgrading, two or more different value
chains are linked for new value chain. For example, value chain of basic
electronic industries can be linked with toy industry to develop a new value
chain for electronic toys. The role of ICTs in managing or streamlining
value chain is immense. Walmart or Amazon’s supply chain management
could be good examples of how ICT can help in supply chain innovation.

The Takeaway Box: ICT and Innovation Are Keys to Your Future!

• Take ICT very seriously, regardless of the business you are in.
• Innovation is a huge driver for all businesses. You cannot con-
tinue to rely on past, static models and successes.
• In the constantly changing world, the paradigm of customer cen-
tricity is a given.
Re-engineer and design all business processes around your cus-
tomer needs.
• Turn to the different chapters in this book again and again to help
clarify your thinking and address different parts of the puzzle, for
your organization and your career.
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