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Reinventing Business Innovation
Technology and process innovation can breathe new life into a mature industry.
by Lay Leng TAN

ith the massive crash of the dot.com industry in 2000, does any life remain in this domain? Mohanbir Sawhney, director of the Center for Research in Technology and Innovation at the Kellogg School of Management, Northwestern University, US, is convinced much is left for harnessing from the Internet and web. He admits, however, that "the future of the Internet and communications technologies is fraught with uncertainty on several dimensions" in a paper he coauthored entitled Seeing Ahead by Looking Back: Lessons from Network Evolution and Implications for the Internet in August 2004.

He notes: "I see the emergence of two related arenas: one is the services-oriented architecture (SOA), which is deconstructing the vertically integrated monolithic system and creating a layered or tiered architecture that separates the back-end system from the front-end applications. This is enabled by another fundamental development that will have a huge impact, namely web services and XML. Web services is the lingua franca that allows systems to talk to each other, companies to connect to each other, business processes to connect to other processes, and applications to applications, to create really much more flexible processes. So the key idea is that modularity, decoupling, and component orientation enable you to create a lot more flexibility in your IT system.

"Another area is demand sensing - the development of sensors, radio frequency identification, and wireless technology. The locating and sensing technologies can be extended to the supply chain to give information more quickly from a diverse set of receiving sources."

Business Week ranked Sawhney — an eminent scholar, speaker, teacher, and consultant who has pioneered the development of such concepts as business-to-business hubs, metamarkets, business synchronisation, community-centric innovation, and collaborative marketing — one of the 25 most influential people in eBusiness. He was in Singapore to deliver the management lecture hosted by the Singapore Institute of Management.

Innovation in Asia

The McCormick Tribune Professor of Technology and chair of the Technology Industry Management Program is no stranger to Asia. Originating from India - he quips, "a product of outsourcing" - he advises India as part of the e-government-related initiative. Having also consulted with Malaysian, Japanese, and Singaporean companies on their strategies, he would have liked to be more involved in Asia but for his busy schedule in the US. "My biggest regret is not doing more work with India," he says ruefully because he feels strongly about contributing back to his homeland.

Sawhney sees Asia's strength as lying in manufacturing and related services. "China is the manufacturer of the world; India is the back office of the world; Hong Kong and Singapore can be the logistics hubs of the world.” However, he cautions, a need exists to migrate to knowledge-intensive services such as business-process reengineering.

The process starts with the visualisation and conceptualisation of a breakthrough-value proposition. Operation is a means to an end, not the end. "The hard stuff is the easy stuff, and the soft stuff is the hard stuff,” he deadpans. The oxymoron actually makes sense — hard stuff such as systems and computers are easy to build, but the soft stuff, namely attitude, culture, and behaviour, requires change in mindset or people.

His key message - help people think innovatively about innovation - should be regarded holistically and broadly: innovation in product, process, customer experience, platform, solution, and so on. “There are a number of dimensions about innovation. It is not just R&D or product development.” He emphasises the importance of viewing innovation as a change-management process that involves creating new behaviours and new ways for people to think. He sees a lot of resistance to the status quo in many companies, a mindset problem that hurts innovation.

"It should be expected to question the status quo and do things better," he advocates. "Innovation is a deviant behaviour — deviating from the norm and doing something different. Not many companies know how to evolve deviation. True innovation requires questioning conventional wisdom and beliefs. Throw away sacred cows, make hamburgers out of them!" he exhorts.

"It is not a disruption you focus on as much as the idea you are questioning some long-held beliefs. Disruption is one way of thinking about discontinuity, and innovation does involve discontinuity, but I would broaden the discussion beyond simply disruptive technology."

Sawhney observes: "Singaporeans were better at operational improvement than thinking out of the box because traditionally, expatriate and multinational companies have been driving innovation. As a country, you should encourage out-of-the-box thinking and taking charge and taking risks.

"There is a conformist streak that needs to be challenged. That was an issue here 15 years ago when I was in Singapore. It was all right then because you needed discipline and conformance. Now the government has to encourage adjustment."

When an industry is young, product innovation predominates; when it matures, process innovation takes over. For instance, nanotechnology falls into the realm of product innovation that invites rethinking the structure of devices, materials, and systems. Because the technology is in the early stage, the sky is the limit for product innovation.

Competition in product innovation can be tough, especially in fast-moving fields such as the infocommunication industry. The successful company can produce and work the technology efficiently. One good case study is Dell Computers. The leader of the pack waits until the computer technology matures before entering with its process of direct sales and services. This strategy helps it avoid the need to troubleshoot immature technology and thus saves money and strengthens its position as the number-one computer vendor in the world.

Innovation in Healthcare

"One major customer problem is the increasing cost of healthcare — the continuum ranges from acute facilities to extended care, assisted living, and home care. As patients move away from acute care and intensive monitoring, they have to do their own monitoring and diagnostics,” Sawhney says.

Technology can bridge that gap. He foresees one way through wireless devices and remote diagnostics. One possible scenario shows a diabetic using a toilet that analyses the urine and then sends the diagnosis to the doctor.

Sawhney expects another area in which technology can play a role as the capitalisation of expensive diagnostics instrumentation like magnetic resonance imaging. A fully equipped state-of-the-art hospital in Punjab, India called Fortis Hospital acts as a hub connecting more than 100 satellite hospitals in small towns. The latter can access advanced facilities and specialists at the central location. Fortis becomes a shared utility that any hospital can leverage through network technology. "The network is fundamental for telemedicine and telediagnosis; you can dramatically improve the affordability and access of healthcare in a less-developed country where facilities and specialists are hard to come by,” he explains.

For more information contact Mohanbir Sawhney at mohans@kellogg.northwestern.edu

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