Copyright © 2014 Tata Consultancy Services Limited

Optimize Innovation-driven Business Performance

June 2015

Employ Rapid, Iterative Experiment Processes to Convert Novel Ideas into Valuable Innovations

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Better returns on innovation investments with RIEP

Perspectives—The Responsive EnterpriseRIEP 2015

Disruptive technologies and changing customer expectations drive innovation.

Many organizations generate ideas. Those that establish Rapid, Iterative Experimentation Processes (RIEP) get better returns on their innovation investments.

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Innovation is vital to growth

Companies seeking to expand market share, enter new segments, or use technology to create compelling customer experiences, need to innovate.

They need to build the capability to continuously ideate, experiment, and monetize innovations.

Perspectives—The Responsive EnterpriseRIEP 2015

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The majority of innovation efforts are unsuccessful

Perspectives—The Responsive EnterpriseRIEP 2015

Typically the generation of creative ideas is not a challenge.

Companies fail to convert their ideas to innovations that stimulate growth or profitability.

Failure stems from the inability to experiment rapidly and iteratively.

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Conventional approaches to innovation fail

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Conventional approaches to innovation fail

Traditional methods of product and technology development, as well as program management, are not conducive to ‘lean innovation’.

Slow and lengthy sequential processes fail to swiftly monetize innovations and maximize overall innovation-driven returns.

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The need for rapid, iterative experimentation

Getting value from new ideas requires a scalable, Lean Start-up style approach.

This involves the use of solution prototyping, concept simulation, and testing to assess proposed innovations.

With this approach, enterprises can ‘learn fast and cheap’ and optimize investments.

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RIEP framework: Making informed decisions

RIEP generates the insights required to make informed decisions about innovation investments.

It uses Lean Start-up style experimentation techniques and tools.

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Identify critical value and growth assumptions, and risks

Hypotheses may relate to customers’ perceived need for the innovation, the company’s ability to build and monetize the innovation viably, and the competitive response.

Case in point: A major grocery and pharmacy retailer expanding into new markets focused on community purchase and use behavior and methods to source local ‘ambassadors.’

RIEP framework: Step 1 – Scope

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Experiment to remove investment uncertainty

Hypotheses are broken down into smaller elements around which a detailed experimentation approach and resource plan are created.

The plan typically includes one ‘sprint’ for every element; this sprint lasts one to four weeks and involves a series of ‘value tests.’

Value tests include solution prototyping, concept simulation, and testing.

RIEP framework: Step 2 – Plan

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RIEP framework: Step 3 – Organize

Common internal RIEP team roles include ideator, idea sponsor/investor, innovation coach, rapid prototyping specialists, concept simulation and testing specialists, and domain and functional experts.

RIEP teams usually use a shared technical platform and process handbook designed for distributed and iterative collaboration.

Each idea’s unique experimentation plan dictates what’s needed

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RIEP framework: Step 4 – Experiment

Maximize data and insight, minimize effort

Solution prototyping proves the technical feasibility of the object on which concept simulations and tests are to be conducted.

Concept simulation and testing includes techniques and tools to address the idea's value proposition, business case, development, and monetization plan.

Case in point: When considering a new, healthier product segment, a beverage company used concept simulation to better understand customer purchase behavior, distribution channel response, and likely collaborators.

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Pivot, halt, or persevere?

Based on experiment findings, innovation investors can make informed decisions about the idea’s future.

• ‘Pivot’: change components of the idea that do not deliver expected value

• ‘Persevere’: the idea moves to the next step

• ‘Halt’: discontinue investment on the idea but learn from the findings

RIEP framework: Step 5 - Decide

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Keys to success

Implementing RIEP requires individuals with an entrepreneurial mindset and competencies in

• Rapid solution prototyping -Agile, digital and emerging technologies, design thinking, and UX/UI design

• Concept simulation and testing - new venture development, creativity facilitation, role-playing, and Lean/Six Sigma

The technical platform includes solutions to rapidly prototype the 'touch, feel, and works like' of the innovative concept.

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Realizing value through effective innovation

Organizations that secure intellectual support and financial commitment to create and maintain an effective RIEP capability can expect improvements in the speed and quality of decision-making inputs.

Effective innovation can lead to higher innovation-driven business performance such as increased revenue, customer satisfaction, profitability, and shareholder value creation.

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Employ Rapid, Iterative Experiment Processes to Convert

Novel Ideas into Valuable Innovations

Optimize Innovation-driven Business Performance