Innovation management is critical to long term success

In today's rapidly changing business environment, managing innovation effectively has become an essential requirement for staying competitive. Long term sustainability for a business may be determined by a company's ability to competently direct innovation resources to address a constantly changing market and economic environment.

What is innovation management?

Innovation management describes the decisions, activities, and practices that move an idea to realization for the purpose of generating business value. It is managing the investment in creating new opportunities for generating customer value that are needed to sustain and grow the business or company.

Generally, innovation investment focuses on the development of new products, services, or technologies. However, the types of innovation that can enhance business results go well beyond these, including changes to a company's business model. Identifying and making these investments successfully and repeatedly constitutes the key objective of innovation management.

Decisions critical to successful innovation

Those involved with innovating will generally tell you that generating ideas is not the difficult part of being successful with creation and change. Numerous decisions will be made that impact the progression and ultimate success of good ideas. These good ideas need to be related to solving a real business problem or growing an opportunity. Questions that hint at these decisions include:

Is the potential innovation aligned with the business strategy?

How does the proposed change generate value for the customer?

What investment is required? Will the needed investment generate an acceptable return?

What would be the impact of the innovation on the current business? Could it disrupt existing profits?

How long will it take for the new concept to be realized and impact the business?

How might the innovation change or disrupt current markets?

Will the new concept generate new revenue or reduce costs?

How will the innovation enhance existing or create new barriers to competition?

Is there easy access to the competencies needed to realize the new concept?

Many of the decisions associated with innovation management are common to the choices associated with a new venture start-up. Conflicts created by some of these choices points to some of the dilemmas associated with disruptive innovation.

Requirements for managing innovation

Having an innovation framework can be a key component to continuous effective change that increases the capability of the business to generate customer value. A critical part of this framework will be the decision making process that is used to funnel the potentially long list of ideas down to the critical few that will deserve investment. For large organizations, this is typically accomplished as part of a stage gate process, but multiple innovation models exist. Often these investments are considered as part of an overall business investment portfolio decision.

Innovation promotes the need for constant change and renewal, potentially impacting all areas of a business. Change is often resisted, necessitating appropriate incentives and rewards to promote needed innovation. Many of the most enduring innovations have required long term investment and staying power. This must be addressed as part of the organizational decision making approach if an innovative environment is to be sustained.

The desire to create long term competitive advantage will often lead to intellectual property and innovation being closely connected. As a result, innovation processes will often have requirements for generation of intellectual property that can protect advantages created by an innovation investment.

Benefits that come from managing innovation

Innovation management is quickly becoming a critical requirement for enabling a sustainable business. Some of the benefits for doing it well include:

Improved timing for market introduction Ability to maintain or improve business margins Enabling access to new customers and markets Increased market share Improved and longer lasting competitive advantage Increased employee engagement and initiative Improved customer satisfaction Sustainable increase in shareholder returns

Managing change and innovation - Getting the most from the

innovation funnelAs complexity increases, managing change and innovation becomes increasingly difficult. Despite (or because of) easy availability of information, the ability to project future outcomes has moved from an environment of manageable risk to rising degrees of uncertainty. The speed at which information is transformed into actionable knowledge is not keeping pace with changes in the business environment.

Manageable risk implies that there is sufficient knowledge to at least quantify the probabilities of specific outcomes. Uncertainty, as characterized by Frank Knight (1921), suggests that the level of risk becomes unknowable. In this type of environment the time to learn becomes the fundamental restriction to effective innovation. New knowledge must be created to determine the changes (or improvements) that will provide benefit and meet goals.

Managing change and innovation to accelerate critical learning

Innovation inherently requires some level of change. Change requires learning. However, humans and organizations tend to learn as a reaction to events. Business incentives provide additional motivation to exploit existing knowledge. What change triggers will motivate the investment in new learning needed to innovate?

Triggers come from both internal and external sources and include:

External triggers

Customer needs, desires or expectations Competitive offers New technology Changing demographics Economic cycle Geo-political events Environmental change Societal change Industry structural changes Regulation change

Internal triggers

Decisions Problems in operations Company growth or decline Leadership and personnel change Changes to inter-organization alliances

Innovation provides a response to these change triggers. Types of innovation help characterize these responses, suggesting innovation that could provide a more effective response to a specific change environment or trigger. With high uncertainty and possibility, managing change and innovation effectively requires that learning investments be focused on the areas of change that represent the highest risk and/or opportunity for continued sustainability and growth of the business.

Of this long list of change triggers, only decisions come fully under control of the firm. Innovation processes typically include external and internal scanning to provide early identification of change triggers, moving company responses into the strategic decision and innovation funnel.

Manage decision making to reduce resistance

Resistance and challenges to change develop in response to factors that increase emotions in decision making. These include:

Self-Interest and fear of personal loss Lack of trust and understanding, particularly with regard

to intentions and purpose Uncertainty and lack of information that makes it difficult

to project likely future events Different goals and assessments by people who will be

impacted by a change

Decisions need to be made at every level to support desired change. This implies that people with different decision making styles must get the information, communication and motivation needed to decide to align and respond positively.

Managing change and innovation should also address questions important to business sustainability and growth.

How much will innovation cost? How will it be measured? What is the return on innovation? Is the cost of failure predictable and acceptable? How many of the decisions fundamental to the current

business model will need to change? What are the likely consequences of a failure to change?

In high uncertainty, the learning investment needed to address these questions becomes difficult to predict, and managing change will need to focus on learning that verifies potential. Stage gates, when used as learning milestones can help manage the learning investment.

Are gated processes still relevant?

When used appropriately, gated processes can provide an effective framework for managing change and innovation. However, gate review boards must represent true decision making bodies. For innovation, they must encourage accelerated, validated learning that reduces uncertainty with minimum investment. Decisions completed at each gate should inherently

support the change process needed for the organization to encourage the success of an innovation.

Consider the following innovation gate decisions:

1. Idea identification - Ideas are evaluated for further resourcing. Criteria will often demonstrate the ability to be accommodated in the current business model, although spinoffs may be supported. Balance must be developed that will promote promising ideas while preventing being overwhelmed by evaluation of too many ideas.

2. Concept validation - The concept is developed enough to determine the investment needed to validate key elements of viability such as value proposition, competitive advantage, and likely returns.

3. Demonstration development plan - A plan is developed to provide a proof of concept demonstration to customers. For startups, this could be a product that might be used with non-paying customers. This plan will seek to minimize investment needed to validate key hypotheses with targeted customers. A demonstration vehicle that can accommodate quick and low cost requirements changes will accelerate the learning process.

4. Customer value validation - The value to the customer is established through their interactions with the demonstration product. Metrics that show causality will provide the learning that will continue to reduce uncertainty.

5. Growth plan - commitment to commercialize - For businesses with an established business model, the plan for full commercialization is developed. This may be the entry business gate to the more predictable (knowable risks) development process. For newer businesses, investment is made to develop a product that can scale as business grows.

Each successive gate in the innovation funnel reduces uncertainty that would prevent additional investment. The decisions made provide evidence of meeting established factors needed for success. Factors that facilitate change are increased while factors that work to resist change are reduced. Needed communication and education are built into the process.

Managing change in the product innovation process

Adapting to uncertain environments with rapid change has encouraged adoption of agile methods in software development. Acceptance of this approach recognizes that cycle times for large scale development have not been able to meet the needs of the current change environment. Learning and adapting to changing priorities has been a key factor in choosing these methods.

Similarly, the effectiveness of managing change and innovation will ultimately be constrained by the limits of an organization's learning and decision making processes. These processes should return more than they cost and facilitate the knowledge creation needed for decision making in uncertain environments.

Types of innovation - Choosing where to innovate

A number of frameworks have been used to look at types of innovation. Generally these approaches for categorizing innovation consider the sources of innovation from past successes or attempt to identify where to look for new innovation in the future. The variety of innovation types demonstrates that the benefits of innovation are not limited to new product development.

Categorization also helps in the measurement of innovation, allowing for performance comparison and evidence based choices that can guide where improvements or advances might generate the most return for a given investment. This is sometimes referred to as the "Return On Innovation."

Different classification models used for discussing innovation types

Alternative frameworks for innovation lead to differing types of innovation based on the objectives and approach inherent in the framework. Here are some well known examples that can be helpful with managing innovation.

In Geoffrey A. Moore's book, "Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution", innovation is considered in the context of the category life cycle, with category being the product or service term used by customers that distinguish what it is they are buying. In this context, Moore defines innovation types consisting of:

o Disruptive;o Application;o Product;o Platform;o Line-

extension;o Enhancement;o Marketing;o Experiential;o Value-engineering;o Integration;o Process;o Value-migration;o Organic; ando Acquisition.

Doblin (a member of the Monitor Group) suggests types from industry patterns. These include innovation in:

o Business model ;o Networking;o Enabling process;o Core process;o Product performance;o Product system;o Service;o Channel;o Brand; ando Customer experience.

In a approach that considers change impact or scope, common types are:

o Incremental innovation ;o Radical (or breakthrough) innovation; ando Transformational ( or disruptive) innovation.

In a similar manner, an alternative approach considers impact to current business, leading to categorization of innovation into:

o Cannibalization;o Market creation; ando Competitor disruption.

Types of innovation can be determined by innovation source. Familiar examples are:

o Manufacturer innovation; ando End-user ( or open-market) innovation.

Where to focus leads to internal versus external innovation. This can sometimes be helpful in managing the level of investment needed.

The Oslo Manual, developed jointly by Eurostat and the Organization for Economic Co-operation and Development (OECD) provides a framework to enable innovation measurement. The manual proposes innovation types of:

o Product (good or service);o Process;o Marketing methods; ando New organizational method in business practices,

workplace organization or external relations.

Using business decisions as an innovation framework

At Decision Innovation, we advocate using the business decision network as the framework for innovation. The business decision network exposes all the decisions creating value for the business, making it easy to see where innovation might create or enhance value for the business. Types of innovation are identified by the type of decision being made. For example, a target market decision would be the source of market innovation opportunities. Similarly, a brand strategy decision would lead to brand innovation opportunities.

The innovation frameworks above focus on different elements already included in the decision framework.

Category lifecycle points toward which decisions in the business strategy are likely to generate value for a product or service category.

Industry patterns suggests decision groups that might generate new value in a given industry.

Impact or scope suggests the potential change impact innovative decisions can have on the business. Innovation in strategic decisions will have greater impact, while changes lower in the network are more likely to generate incremental value. In either case, the decision framework enables an evaluation of potential impact, including positive or negative changes to current markets, profits, or competition.

Internal or external focus is a consequence of which strategic decisions are considered when innovating. For instance, choice of a strategic partner would imply an external focus.

Innovation measurement is enabled by the decision network where outcomes can be traced to the sources of innovation, the decisions that created new or sustained value.

When using a decision network as an innovation framework, each decision provides the basis for creating ideas focused on a real business problem, making each idea a potential innovation.

Choosing where to innovate

Finding new opportunities to innovate and create value is often a routine expectation of research and development. However, the types of innovation exposed in the frameworks above suggest multiple sources for innovation across the business, function, organization, or industry.

Ultimately, value is created in the decisions made for the business. A decision framework provides the complete environment for innovation. It simultaneously identifies the type of innovation, along with the context to evaluate the potential value, impact and scope needed to make an effective investment choice.

Choosing an innovation modelWhat creates the need for an innovation model? For most businesses, it is the need for growth. The long term expectation for mature companies is organic growth of 4 to 6 percent, generated by the need to provide a reasonable return to shareholders. For smaller companies, growth demands can be significantly higher.

Effective innovation provides the solution to meeting this growth demand. An innovation model provides the conceptual framework for identifying and advancing the change ideas most likely to generate the value needed to create sustained growth.

The familiar Linear Innovation Model

A paper by Benoit Godin (Godin, 2005) provides a historical discussion of the Linear Innovation Model. He suggests that the source remains unclear, but he offers an initial early reference from 1945. The model is ultimately summarized with the following steps:Basic research → Applied research → Development → (Production and) Diffusion.Godin also presents a time-based taxonomy, suggesting how this model has developed over time.

The Linear model emphasizes scientific advance over contributions that come from players later in the process, leading to a key source of criticism. The continuity of use for this model, despite much opposition, is partially attributed to its simplicity. More importantly, the statistics available based on the linear model, or lack of statistics for alternative models, may be delaying change to other innovation framework options.

Characteristics to look for in an innovation model

A model attempts to provide a representation that can help us understand how things work. Some attributes to consider for a model of innovation include:

Simplicity - Is the model easy to understand and use? Descriptive - Is there sufficient detail to enable

explanation, comparison, and/or imitation (use)? Assessable - Does the model enable measurement and

provide a vehicle for evaluating alternatives? Predictive - When model assumptions are true, does the

model provide probabilities for described outcomes? Timely - Does the model provide assessments,

measurements, and insights that enable innovation opportunities in a timeframe that will lead to success?

The timeliness element for an innovation model can be particularly challenging. Innovation requires decisions for change which are often resisted, particularly when changes may cannibalize current business. A good model will provide the information, insight, and needed motivation for internal change before external changes can disrupt the company.

Premature change can also be ineffective if environmental conditions are not ready to support the change being promoted. An effective model will detect environmental readiness for change adoption, enabling acceptable returns for innovation investments.

Other innovation models

Innovation research has generated additional models that attempt to address deficiencies seen in the linear model. Sources of ideas that can generate value have been broadened, recognizing that some highly successful innovations have not been the direct result of application of scientific or technology advances.

Variations of the linear model have been developed that include:

Technology push - This has a small change from the linear model where marketing and sales is added after production.

Market pull - This variant suggests that research and development is responding to a market need, resulting in this modification to the earlier model: Market Need → Development → Production → Sales.

The Phase Gate Model - This modifies the linear model by recognizing that there are feedback loops and time variations between steps, and establishes readiness criteria for moving between major phases of innovation development. Phase Gate approaches are often represented by a funnel.

In the 1980's, Proctor and Gamble developed the "Connect and Develop" model to address the increasing costs of keeping all research and development within the company, representing an example of open innovation. In this model, parts of research and development come from outside the company as a result of networking and partnerships.

Recent models, such as those by promoted by Everett Rogers and Geoffrey Moore, have tended to focus on elements of adoption. The "Diffusion of Innovations" from Rogers focuses on psychological profiles that characterize adopters at various stages of an innovation adoption cycle, enabling a focus on market innovation. Moore's focus on the technology adoption lifecycle points to where innovation is more likely to be effective given the current state of a specific product or service level of acceptance.

Approaches coming from innovation research, such as Actor-Network theory and Social Shaping of Technology, have led to a broader picture of how innovation works. This has led to new types of innovation such as user innovation. Models are attempting to address change discontinuities that can disrupt companies and create paradigm shifts. This innovation research can become quite complex, entering areas of philosophy, such as epistemology, the theory of knowledge.

Advantages of finding the right innovation model

Detecting the need for change, or finding new places to generate growth can present significant challenges for any company or organization. Having an innovation model that facilitates and promotes understanding of how things change could make the difference for the long term survival of the business. An effective model:

Provides a conceptual framework and promotes innovation thought

Aids faster identification of new sources of innovation Facilitates better timing for market introduction

Helps find innovation opportunities aligned with timeframes needed for the business

Reduces likelihood of competitive disruption Increases return on innovation investment Improves ability to anticipate needed innovation Sustains competitive advantage and enables long term

growth

In summary, an innovation model could be a key element for creating competitive advantage and is critical for sustained growth in today's business environment.

Using business model innovation to create new paths to growth

Business model innovation is probably the most challenging of the innovation types as it will likely present an organization with major requirements for change. Often, the very capabilities or processes that have been optimized to make a company successful and profitable will become the targets for transformation. In some cases, these changes can threaten elements of the company identity and come into conflict with brand expectations or promises.

What is business model innovation?

A business model is a simplified representation of how the business makes money. Using our decision making model, it is the fundamental set of decisions that form the business and allow for its continued existence and profitability. For a starting business, business model generation will include choices for the following strategic decisions:

1. Identity - This decision will include choices for mission, vision, core values and brand identity. It establishes how the business wants to be known to its customers.

2. Core resources - This will include choices for core competencies, processes and strategic partners that allow realization of the opportunity value proposition.

3. Target customers (or markets) - Decisions are made for focusing offers to specific customers or segments that will best respond to the offers from the business.

4. Channel strategy - The channel for reaching the customer is identified along with choices for managing the customer relationship.

5. Customer offers - Choices for products and services are identified that will create value for the customer by solving problems and meeting specific needs or desires. This will also include choices for the customer experience.

6. Supply chain strategy - Choices are made for how the product and services will be created and delivered to the customers and at what cost.

A start-up's business plan essentially documents these key decisions, adding information that supports the alternatives chosen and demonstrating a viable business model. Viability is established when the revenues gathered from the customer offers exceed the costs to provide the products and/or services.

After viability the business must identify how it will be sustained in the face of competition. Choosing a competitive advantage strategy [7 on decision network] typically identifies the areas where the company will focus its innovation efforts (or investments) to maintain or increase the value provided to its customers over time.

Business model innovation looks for change opportunity in these foundational decisions. For long running businesses, these fundamental decisions may have become embedded in the culture, creating significant resistance to change.

How is business model innovation different from other types of innovation?

Unlike other types of innovation, changes to the business model require changes to the foundational decisions upon which the business operates. Therefore, business model innovation will likely be radical, and in many cases, transformational. Most innovation is incremental, such as product innovation, where technology enhancements are routinely included in product updates as a way of increasing performance or reducing costs.

Changing the business model design brings much higher risk due to the potential for disruption to the current business. For large businesses, recognizing and managing this kind of transition can be critical to long term survival. Start-up businesses have the advantage since they can iterate and adapt their business model as they are in the process of an initial business model design. This suggests why many disruptive innovations may come from start-up businesses or small isolated teams in established businesses.

Some business model innovation examples

Many past business model innovations have come as a result of taking advantage of new technologies to make fundamental changes to one or more of the key strategic decisions under which the company operates. This has been particularly true for manufacturing based businesses where choices for core resources have evolved significantly as a result of

improvements in transportation and communication technology. Examples of some large company business model transformations include:

IBM that has managed changes in customer offers from mainframes to personal computers to technology services

Apple that has evolved its customer offers of personal computers to music delivery devices and service that ultimately included cellular phones

Dell's innovation of a new distribution model by allowing online customization that capitalized on improving internet technology

Walmart's fundamental changes to a networked enterprise structure and value chain

When is it time for business model change?

Changing a business model can look very attractive because of the numerous cases cited in business books and literature. Significant successes are attributed to business model innovation, and we all want to emulate that success. An IBM Global CEO Study from 2006 provides data that shows a strong correlation between higher operating margin growth and business model innovation (versus operations or "product, service, markets" innovation).

While business model change seems appealing, this type of innovation challenges the foundational decisions underlying the current business, disrupting the very structure that is currently paying the bills. This suggests that finding the right time for a business model change is fundamental to success. Some timing indicators include:

Evidence of commoditization or declining industry margins Indications of over served customers Inability to keep pace with changes in your industry Base industry technology being used in outside industry

products Opportunities coming from the current product/service

portfolio to serve customers in outside industries Degradation in innovation metrics such as sales

attributed to new products

Industry evolution can be unforgiving, and change can go much faster than expected, requiring diligence in the timing of a new business model design.

Don't forget the soft decisions that are part of the business model

As identified previously, decisions on identity are often an important part of the company's business model. Core resources and competencies reflect choices for values. The company's brand represents promises delivered in its value propositions. There is a point at which proposed business model changes can remove the foundation that sustains the brand, and perhaps more importantly, the business identity. When this occurs, business model innovation may suggest restructuring of the company.

In the end, the business model design must be aligned to the business identity for any possibility of a successful innovation outcome.

Using incremental innovation to grow your business with low risk

In today's rapidly changing business landscape, incremental innovation can often be underrated when compared to other innovation types. Business leaders often assert high overall innovation failure rates, varying anywhere between 70 to 98%. Contending with this level of failure makes incremental changes look attractive when considering the risk associated with innovation investments.

Characteristics that distinguish incremental improvement

Change impact or scope is the key aspect used to differentiate incremental from radical, breakthrough, or transformational types of innovation. Incremental innovation is characterized by:

Utilizing or enhancing current core competencies and capabilities

Modest technological changes from existing platforms, products, or services

Responding to customer needs identified from current offers

A more predictable path or process, particularly with respect to costs

Often following a formal stage-gate process Prolonging the market life of a product or service while

sustaining the competitiveness of existing products in the market

Enabling continued growth with low risk

In some cases these incremental improvements may provide advantage to existing industry players as they capitalize on existing knowledge, resources, and processes. This type of innovation can also reconfigure current capabilities to serve a new use or need.

Choosing the best innovation investments

Incremental innovation most often moves along the established innovation framework for the business. In many cases, the business will have an established pipeline that evaluates new concepts and ideas that can move through the service or product innovation process within a defined level of risk. Factors that can establish viability as an incremental improvement include:

Time to market - The innovation can hit an expected market window for the enhancement. Often, this includes being able to maintain a steady flow to the market that will match forecasted demand.

Low technology, architectural, platform or process risk - Technology, architecture, platform and process changes can take longer than estimated and open new possibilities for failure. Innovation activities for enhancements will generally avoid these risks by limiting or avoiding changes in these areas.

Low resource risk - Incremental changes will have manageable impacts on resources. Frequently, innovation project management will seek to reduce risks for supply chain resources and partners.

Comprehensible or obvious change for the customer base - Incremental advances will be easily understood and adopted by established and newly targeted customers.

Cost or price reduction - Changes that reduce cost or price are common enhancements that can enhance growth by broadening market reach.

Performance or effectiveness - Improvements will match or slightly exceed competitive offers in established performance areas.

Regulatory compliance - Innovation may be needed to meet ongoing changes to regulatory or standards requirements.

Experience - Small improvements in experience can provide significant customer value and provide opportunity for innovation across the organization.

An attractive source of incremental innovation can also be found through established suppliers and partners where their technology improvements can be used as potential components in a new offer to customers.

How much of investment should go to incremental innovation?

There is an abundance of information available that can influence decision making on where best to innovate. We often experience conflicting motivations to consistently improve existing products and services while also trying to be vigilant for "game changing" innovation opportunities. Ultimately, innovation investments must find the critical balance of short term, medium term, and long term ventures that provide needed growth while preparing for long term survival.

Finding this balance is a key goal in managing innovation and should be guided by the strategy for the business. Investments in incremental innovation should take the largest portion of the innovation budget as they fuel the low risk near term growth, typically in the zero to two year time horizon. However, discipline in the portfolio decision analysis must ensure that the incremental enhancements are generating the projected returns on innovation, particularly when base innovation diffusion (per Everett Rogers) has moved past the early majority adoption phase. Investments in incremental changes that exceed 90% of

the allocation for innovation may be pointing to a problem, particularly if it is happening consistently.

When is incremental innovation inadequate?

At some point in a category lifecycle there will be signs that incremental changes are not enough to sustain viability for your business. Here are some of the warning signs:

Cost/Price reductions no longer generate the increase in sales needed to make an adequate return on the cost reduction investment.

The investment needed to maintain the product/service innovation pipeline is degrading profitability.

The success rate of innovation activities is falling well below expectations.

Investment in innovation projects are exceeding developers' estimates.

"Ticket to play" projects that do not provide a return consume an increasing portion of the innovation budget.

Market penetration for the product or service has passed beyond the early majority (about 50% of the population).

Balancing the innovation portfolio

We can become absorbed with radical or disruptive innovation but, most growth is achieved through a steady stream of incremental innovation that is more frequent and economically predictable. The success rate of radical innovations is amazingly small, likely less than 10%.

Small improvements can add up to significant change over time, and represents continuous learning by researchers, managers, developers, suppliers and customers. Incremental change is the key source for

low risk growth and successful innovation management must establish the balance between evolutionary and revolutionary initiatives that will grow and sustain the business for the short and long term.

Examples

Disruptively building a better business within the Networked Society; concrete cases Economists, Strategists, Visionaries are calling for redefining the 21st century capitalism; capitalism that reinvents societal ties; capitalism that no longer divides, exploits and sheds societal disasters wherever it surges. The open-ended consumption model we have today is no longer sustainable. Fortunately the change has already started; let me introduce you cases from this new-disruptive-better-business-era.

Case 1:India is the second largest country in the world in terms of population. India has also a large number of villages; more than 600.000 villages with poor transport infrastructure making movement of goods and people extremely difficult.

Retinopathy of Prematurity (ROP) is the leading cause of preventable infant blindness worldwide. India has the largest concentration of blind people in the world, 1 out of 3. Over 8% of 27 million births each year are at risk of this potentially blinding condition. The ratio of inhabitants to ophthalmologist is around 100,000:1. There's no way the number of qualified physicians will grow to match the need anytime soon. The challenge is to screen 250.000 infants a day. This problem requires a fast and efficient solution for screening infants especially in the rural areas where expertise is lacking.

The widespread availability of mobile networks and the steady growth of Mobile broadband are opening unexpected doors for fast, efficient and societal innovations. Mobile broadband technology provides the possibility to transport data securely, conveniently, faster and while traveling.

A potential solution has been tested. The Postgraduate Institute of Ophthalmology has partnered with a software company i2i TeleSolutions in Bangalore, and developed the solution. The solution consists of the availability of a portable retinal camera with an image capture design suited for newborns. This camera allows technicians to capture images and upload them via a Mobile broadband dongle data card. The images and data are uploaded to a remote server. Once uploaded the images can be accessed and viewed by an ophthalmologist - who could be thousands miles away - using an Iphone, an Ipad

or any other PC.Feedback and corrective measures can then be provided back to the technician via the secure server.This scale of screening in such large numbers can only be possible using Mobile Broadband networks.

Case 2:

In France since July 1, it is mandatory to have a breathalyzer (Alcohol tester) in his car. Car drivers have the choice between two alternatives: the disposable one of 2 euros or an electronic device priced more than 100 euros now. It will be much cheaper with larger sales volumes.

AndroMC Systems has worked on a solution associated with a smartphone, which is widely used in France. This company has developed a breathalyzer that plugs into a smartphone, and is associated with an application.

The principle is simple: you plug the reusable housing on the charging port and blow in it and the app indicates whether you are fit to drive. If not, the app may even find another means of transportation in the neighborhood, or call a cab for you. When possible the app can even block the car starter!

The combination of smartphone and Mobile broadband connectivity is becoming a driver of new business innovations, that will lead to economic growth, social empowerment and without any doubt to many surprising disruptions.

Do you imagine the social value of these services? Their business case is sustainable and more than positive.

Posted by Sami Dob at 9:24 PM

Email ThisBlogThis!Share to TwitterShare to Facebook

0 comments

Saturday, November 10, 2012

Apple, Facebook, Google common love: the "double Irish with Dutch sandwich" Do you know what is "double Irish with Dutch sandwich"? No, it's not a special cheeseburger.Many people don't know what it is. Well. The ones with no accounting & financial

knowledge...

It's an accounting technique known as the “double Irish with a Dutch sandwich” which reduces taxes by routing profits through Irish subsidiaries, the Netherlands and to the Caribbean. Today, it is used by hundreds of other corporations. Apple was pioneering in developing this tactic in order to avoid paying tax in high tax rate countries. What do Apple , Amazon , Facebook and Google have in common? The love of the "double Irish sandwich Dutch." Technology giants hide tax using these sophisticated systems, while brewing billions of euros of turnover in these countries.

Corporations that implement this tactic have one thing in mind: maximize profits where taxation is low and have a very low turnover where the tax rate is higher! Check this one, many of these corporations have subsidiaries registered in the Netherlands where the tax rate is 5%, subsidiaries in Ireland where the tax rate is 12.5% and subsidiaries in Bermuda where tax rate is about 5%; compared to the UK tax rate of 24% or France 33%.These technology giants use the transfer pricing method. This method allows corporations to move sales between subsidiaries. From subsidiaries to parent company that is based in a tax heaven!! Got it?!As an example, Amazon who is headquartered in Luxembourg, paid in the UK 2.3 million in taxes for a turnover of nearly 260 million euros in 2011. Facebook is accused to have deliberately created a net loss to avoid UK tax. Apple has paid 6.2 million euros in taxes in the UK, only 7.2% of its turnover in the country. Apple paid less than 2% tax on overseas profits last year, just $713 million in overseas corporation tax on profits of $36.87 billion. As a result: the parent company (based in a tax heaven) gets the largest profits while the subsidiary generates virtually nothing. And this is completely legal!Governments in Europe, particularly in France and the UK where most of the profits are made for these companies, have started investigating and complaining about these practices.

My first question to the Apple, Amazon, facebook & others: Why on earth don't you want to pay tax in the country where you're making the largest profits? I know your answer: It is capitalism. This is business. greedy-sleazy-shabby-cruel business. The simple holy act of profit maximization is the only raison d'etre of these giants.

As I mentioned earlier, this is totally legal, but I put a question mark on whether it is totally ethical as well.Tax collection is the only revenue source of governments to support healthcare, education, nutrition of their folks. These folks are the ones who are consuming your products, buying your services and making sure that you are generating high profits for your business. Refusing to fairly pay your real tax in Spain, Italy, Greece, France, etc... is a cynical and disgraceful stand, particularly in these uncertain times.

My second question:, remind me: what societal value are these giants really creating? what is their contribution to the society? to healthcare? nutrition? water problems? poverty? oh yes I forgot, Apple is employing Chinese for $2 a day. What a great societal contribution!

I really believe that these business practices must change. Businesses should generate profits for shareholders and must contribute in creating societal value as well. We cannot continue with this open-ended consumption model, where the simple act of profit maximization is good in itself.

The world is changing, and the business practices must change as well!

Posted by Sami Dob at 9:36 PM

Email ThisBlogThis!Share to TwitterShare to Facebook

1 comments

Friday, October 12, 2012

Welcome to the Disruption Era! 23 BUSD of lost revenues for Telcos in 2012 because of free SMS

Prof. Clayton Christensen Disruption Model

23 BUSD lossFree messaging on smartphone, like Whatsapp, cost Telcos companies worldwide in 2012, 23 Billions US dollar on missed SMS-revenues, according to Ovum, in a recent report published in October 2012.

In the Ovum report, it is expected that losses could reach 54 BUSD per year by

2016.

What Telecom operators must do now? what are their choices? their options? their strategies? First, Telcos should start understanding, much better than they are doing, the influence of social applications on the consumers behavior. Secondly, start offering services that address these new consumers trends and behaviors.In Ovum report, it is clearly observed that an increasing number of companies are using more and more social messaging services. This does not seem to be a short term trend but a complete shift in communication pattern.In 2009, SMS provided 57 percent of 'non-voice' revenues to Telcos. In year 2012 this percentage will go down to 47 percent.

Once again the 'Free' business model has prevailed. So what is exactly Whatsapp business model?