Tata Consultancy Services innovation network awaits its Siebel moment

The company’s COIN model, though making money, is yet to seea big hit six years after its launch

While Indian companies understand that innovation is the lifeline of business, they are only just realizing that the process is neither easy nor systematic. Six years after the model was conceptualized, much before the software industry took client-driven innovation seriously, the Co-Innovation Network (COIN) of Tata Consultancy Services Ltd (TCS) has begun making money, but that one big hit remains elusive.

“At least 75 solutions developed jointly with start-ups in the last five years are now part of TCS offering,” said chief technology officer Ananth Krishnan. “The COIN model is generating revenue but I’m still searching for a Siebel-like success in India.”

Customer relationship management (CRM) software maker Siebel Systems at one point had nearly half the global market share in enterprise software and was acquired by Oracle Corp. in 2005 for $5.8 billion. Still, for all his “creative dissatisfaction”, Krishnan says, “in the last five years, a Siebel hasn’t come out of California’s Silicon Valley either”.

That may be comforting, but the “derivative” or “platform” solutions and business model innovations that COIN is undertaking with start-ups and strategic partners such as Cisco, Intel Corp., and Hewlett-Packard will keep them merely competitive. They haven’t yet been able to hit upon the kind of disruptive innovation that creates totally new markets.

“We haven’t discovered that yet, but there are a handful of companies in the cloud computing space (that we are working with) which could prove to be disruptive in the next 12 months,” he adds.

TCS set up COIN in 2004, soon after the book The Future of Competition, co-authored by the late management guru C.K. Prahalad, enunciated “co-creation” as a strategy for companies to satisfy customers and sustain profitable growth.

Since then, more so after its formal launch in 2007, COIN has used its complex network of start-ups, venture capitalists, established companies, academic institutions and customers in India, Europe and North America to develop solutions for a changing market.

Business software maker SAP AG follows a somewhat similar model and set up its third Co-Innovation Lab (COIL) in Bangalore in April 2009. A year later, the $3.57 billion (Rs16,101 crore) German firm has begun selling 14 solutions developed at its Bangalore research unit in association with system integrators and software vendors such as MindTree Ltd, Wipro Ltd, and Arteria Technologies.

“There certainly is value in business collaboration; it helps us care about customers beyond our products and we are taking more ownership for the problem of the customer,” said Axel Henning Saleck, head of the global SAP COIL network, SAP.

Source: Live Mint(Wall Street Journal)