Implementing Customer Focused Innovation Networks

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Making Leaders Successful Every Day

May 8, 2008

The Tech CEO’s Guide ToImplementing Customer-FocusedInnovation Networksby By Navi Radjou

for Vendor Strategy Professionals

http://www.forrester.com/



© 2008, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make oneattributed copy or slide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and aresubject to change. To purchase reprints of this document, please email [email protected].

For Vendor Strategy Professionals

EXECUTIVE SUMMARY

To win in the emerging partner-rich, user-empowered global IT ecosystem, Forrester believes that

tech providers must form customer-focused Innovation Networks (CFINs) in which they co-create

innovation value with their corporate clients. But implementing CFINs in a tech firm won’t be a

walk in the park, as this disruptive business paradigm challenges deeply rooted cultural norms and

well-entrenched organizational structures. As old habits die hard, this document details five specific

steps that visionary tech vendor CEOs should immediately implement to drive the organizationaltransformation required to position their firm for CFIN success.

TABLE OF CONTE NTSTech CEOs Must Overhaul Their Firm’s Culture

For CFIN Success

1. Institute An Enterprisewide Governance

Structure To Optimize The Entire CFIN Portfolio

2. Incent Solution Delivery Teams To Innovate

Around Customers’ Customers’ Needs

3. Transform Insular R&D Culture To BoostCustomer Responsiveness

4. Invest In Web 2.0, SaaS, And SOA

Technologies To Net-Enable CFIN Collaboration

5. Localize CFINs And Cross-Pollinate CFIN Best

Practices Across Regions

Tech CEOs Should Engage Employees As CFIN

Transformation Partners

WHAT IT MEANS

Tech Vendors Will Have To Adopt CFINs — Or

Risk Going Bust

NOTES & RESOURCESFor this report, Forrester interviewed leading

IT providers in North America, Europe, and

India, including: Accenture, BT, Capgemini, IBM,

Infosys, SAP, Sapient, TCS, and Wipro.

Related Research Documents

“Customer-Focused Innovation Networks Emerge”

April 22, 2008

“How IT Consultants Can Finally Profit From

Clients’ Business Innovation Demands”

May 18, 2007

“ The Emerging IT Ecosystem”

January 2, 2007

“Innovation Networks: Global Progress Report

2006”

June 14, 2006

May 8, 2008

The Tech CEO’s Guide To Implementing Customer-Focused Innovation Networks

This is the third document in the “Driving Customer Co-Innovation In Global IT Ecosystems” series.

by Navi Radjou

with Pascal Matzke and Janine Liu

2

9

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http://www.forrester.com/go?docid=45354&src=45975pdf















© 2008, Forrester Research, Inc. Reproduction ProhibitedMay 8, 2008



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TECH CEOS MUST OVERHAUL THEIR FIRM’S CULTURE FOR CFIN SUCCESS

In a recent report, Forrester predicted the emergence of a client-centric business model that we call

customer-focused Innovation Networks (CFINs).1 CFINs let corporate clients’ insightful input and

active participation shape and optimize the collaborative innovation activities that take place in

global IT ecosystems (see Figure 1). But like any disruptive business paradigm, CFINs adhere to the

“no pain, no gain” rule:

· CFINs boost vendors’ time-to-market, profitability, and customer loyalty. In CFINs,

sophisticated clients plug directly into tech firms’ Innovation Networks and collaboratively

shape their dynamics. e result? Vendors gain immediate feedback on new products and

services, which boosts their offerings’ market relevance and profitability. IT suppliers that

embrace CFINs also earn corporate customers’ undying loyalty as they empower them to drive

the four Innovation Network roles, putting clients’ interests before their own.

Figure 1 A New Business Model For Success: Customer-Focused Innovation Networks

Source: Forrester Research, Inc.45975

Tech Corp.

Creative clients act as co-Inventors

Lead customers and early adopters become the Transformers

Risk-sharing clients willingly assume the role of Financiers

Resourceful and loyal customers behave as Brokers

Enterprisecustomers

IT providerecosystems



© 2008, Forrester Research, Inc. Reproduction Prohibited May 8, 2008



3

· ere is no free lunch: CFIN success requires fundamental organizational transformation.

While the benefits of a networked business model like CFIN are evident, paradoxically, its

implementation success largely depends on changes that tech vendors need to infuse into their

internal organization. ese changes aren’t for the faint-hearted tech CEO. Why? Because tech

CEOs who adopt the CFIN model will need to transform and reinvent their organization along

two distinct yet complementary dimensions. First, they need to train their technically minded

staff to cultivate client intimacy. Second, they have to deconstruct their vertically integrated and

rigid R&D and go-to-market approaches into fluid and partner-rich Innovation Networks (see

Figure 2).2

Tech providers’ CEOs must carefully lay out the organizational groundwork needed for their firm

to ease into the CFIN voyage and successfully reach its destination. To maximize the upside of

CFIN adoption while minimizing its organizational pitfalls, Forrester proposes that tech vendors’

CEOs proactively initiate and implement a five-point organizational transformation agenda. In noparticular order of priority/action, these five points are:

Figure 2 Vendors’ CFIN Success Hinges On Two-Dimensional Organizational Transformation


Tech Corp.

Enterprisecustomers

Tech Corp.

Partner-richInnovation Networks

Innovationapproach

Vertically integratedinnovation model

Customer-blind Customer-focused

Market orientation

Current vendororganization

CFIN-anchored vendororganization






4

1. Institute an enterprisewide governance structure to optimize the entire CFIN portfolio.

2. Incent solution delivery teams to innovate around customers’ customers’ needs.

3. Transform insular R&D culture to boost customer responsiveness.

4. Invest in Web 2.0, soware-as-a-service (SaaS), and service-oriented architecture (SOA)

technologies to Net-enable CFIN collaboration.

5. Localize CFIN ecosystems and cross-pollinate CFIN best practices across regions.

1. Institute An Enterprisewide Governance Structure To Optimize The Entire CFIN Portfolio

Imbued with a “Let a thousand CFINs blossom” philosophy, CFIN pioneers like Accenture,

Cisco Systems, and SAP have allowed their various functions and practices to launch a plethoraof customer co-innovation initiatives labeled “Global Customer Community” or “Customer

Innovation Network.” Unfortunately, without an integrated view of their disparate CFIN programs,

these vanguard vendors risk diluting their valuable innovation resources by investing in multiple

redundant or nonstrategic CFIN projects. To optimize the value of their entire CFIN investment

portfolio — which encompasses level-one, level-two, and level-three CFIN projects — these IT

providers’ CEOs must:3

· Create an enterprisewide CFIN governance committee. is committee should boast

representation from business unit (or practice) leaders, as well as heads of R&D, operations,

sales and delivery, marketing, and partner ecosystem groups. is steering committee should

not seek to micro-manage individual CFIN projects, which tend to emerge rather organically.Rather, the CEO should task it with driving cross-unit CFIN synergies and balancing firmwide

resource allocation between level-one, level-two, and level-three CFINs in a way that maximizes

client value while boosting the vendor’s profitability and brand equity (see Figure 3).4

· Empower this committee to nix unprofitable CFIN initiatives. By gaining a bird’s-eye view

of various CFIN initiatives undertaken across business units or practice areas, the committee

can drive innovation synergies. But that’s just the first step. e CEO should also empower

this committee to put a brake on internal functions’ “pet projects” with limited client value

and to fast-track those customer co-innovation projects that help the firm swily respond to

competitive threats and seize new market opportunities worldwide.

Case in point: IBM’s First-of-a-Kind (FOAK) program. IBM’s FOAK program is a level-three

CFIN initiative that allows forward-thinking clients to co-finance and co-invent an industry-

leading business solution with IBM and its partner ecosystem. IBM has instituted a companywide

governance board — with representation of senior execs from R&D, soware and services groups,

and sales and distribution — to oversee all its FOAK programs. is board’s mandate is to optimize

the individual and collective value of FOAK programs throughout their life cycle.






5

Once a quarter, this board reviews and approves new CFIN projects that IBM researchers and

sales teams have jointly proposed.5 It identifies and integrates redundant or overlapping proposals

to drive synergies. Each quarter, each FOAK project team presents a progress report to the review

board, ensuring that resource bottlenecks are proactively identified and rapidly resolved. eboard also tracks FOAK projects during the two years following their completion to ensure that

the customized solution assets resulting from client-specific projects are rapidly scaled up and

commercialized as repeatable “second or even third of a kind” solutions.

Figure 3 Vendors Need A New Governance Structure To Maximize Their CFIN Investments


Get 20% of totalrevenues from BRIC

markets by 2010

Make beachheadin new industries

and sectors

Demonstratethought leadership

in European markets

Business metrics

6 months 1 year + Ongoing

A

B

C

Type of CFIN initiatives(% of innovation portfolio)

Level-one CFIN

Level-two CFIN

Level-three CFIN

Prioritizing CFIN initiatives

US$15 million

US$2.5 million

Grow Indian marketrevenues by 50%in 2009

A. India’s first RFID-enabled end-to-end

supply chain

US$1 millionC. Social Computingproof of concept in

European pharmasector

B. SaaS-enabled PLMsolution for smalland medium-size

business (SMB) sector

Strategic client(s)involvedMetricCost

Achieve SMB leadershipby 2010

To be recognized as athought leader byEuropean CEOs inThe Economist ‘s nextannual survey

Reliance Group

10 SMB clients frommanufacturingvertical

Top four Europeanpharma companies

14 months

6 months

3 months

Time to innovationdelivered

The CFIN governance committee can track enterprisewide CFIN initiatives usingportfolio management techniques:

An example of a global IT consulting firm






6

2. Incent Solution Delivery Teams To Innovate Around Customers’ Customers’ Needs

In fast-moving B2C industries like retail, consumer goods, healthcare, telecom, and financial

services, CEOs expect their IT vendors to help them decipher their finicky end users’ rapidly

changing buying preferences, especially in the dynamic Brazil, Russia, India, and China (BRIC)

markets. To drive market-focused co-innovation with their clients, tech vendors’ professional

services teams should:

· Rely on end users’ requirements to shape customer co-innovation efforts. Tech vendors

must extend their customer requirements analysis beyond brainstorming workshops with execs

from their corporate clients. Instead, these providers must design CFIN scenarios that exploit

Social Computing tools like interactive prototyping and ethnographic field studies to capture

end consumers’ latent requirements. ey must then use the resulting end consumer insights as

the “single truth” to anchor their creative collaboration with enterprise clients and ecosystem

partners.6

· Acquire or partner with BRIC-focused market research firms. Goldman Sachs projects

that the consuming middle class in the BRIC nations will quadruple in the next decade and

contribute nearly 70% of global growth by 2040.7 To help clients decipher the socio-economic

attributes of middle-class consumers in BRIC markets, tech vendors, especially multinational IT

suppliers, must partner with BRIC-focused market research and consumer analytics firms like

Ogilvy & Mather and Social Solutions. Interestingly, offshore IT vendor Satyam has gone one

step further, acquiring Caterpillar’s market research and customer analytics arm. Satyam’s goal?

To weave end user insights into the CFIN services it aims to provide to its auto and industrial

equipment clients operating in BRIC markets.

Case in point: Accenture’s Customer Innovation Networks. To drive end user-focused CFIN

collaboration with clients in retail and consumer product industries, Accenture has set up four

Customer Innovation Networks — physical facilities with rich multimedia capabilities — in Chicago,

Düsseldorf, Milan, and Shanghai. Within these facilities, Accenture hosts brainstorming workshops

with its forward-thinking corporate clients and their trading partners to co-develop innovative

business solutions aimed at better connecting with the end consumer. e big bonus for Accenture’s

enterprise clients attending these experiential workshops is that they can actually prototype in

real time and try out in person the creative solutions co-developed with Accenture. For instance,

a European retailer operating in China can actually live the “Customer-Centricity Experience”

by experimenting with innovative and cutting-edge technology solutions like Web 2.0 that willdramatically improve the way retailers interact with tomorrow’s Chinese consumers.

3. Transform Insular R&D Culture To Boost Customer Responsiveness

CFINs rely on Innovation Networks that augment , rather than supplant, internal R&D capabilities.

But tech vendors must strive to:






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· Retool their insular R&D assets to win in partner-rich, market-focused CFIN environments.

IT vendors can learn from Eli Lilly, Nokia, Tata Consultancy Services (TCS), and Whirlpool,

which are already transforming their rigid R&D cultures by retraining their scientists and

engineers. e objective is for these technologists to act less as introverted Innovation Network

Inventors and more as outward-facing Brokers and Transformers of external inventions sourced

from global partner ecosystems.8

· Connect their ivory-tower R&D labs directly with enterprise clients. Vendors with rich R&D

resources need to infuse the CFIN focus into all of their functions, including R&D. How? By

instituting programs like IBM’s On Demand Innovation Services and BT’s Customer Innovation

Engagement Programme, which directly plug these vendors’ R&D staff into CFIN consulting

projects.9

Case in point: BT’s Customer Innovation Engagement Programme. Since 2002, CTO Matt Brosshas shaken up 100-year-old BT’s vertically integrated R&D value chain by opening it up to a global

Innovation Network of partners.10 BT’s CTO office also recently launched a Customer Innovation

Engagement Programme, which aims to drive level-three CFIN projects in collaboration with senior

business and IT execs from strategic client accounts. In each CFIN project, scientists and engineers

drawn from various R&D groups work alongside BT Global Services consultants and external

partners to drive multidisciplinary co-innovation with the client under a shared risk/reward model.

4. Invest In Web 2.0, SaaS, And SOA Technologies To Net-Enable CFIN Collaboration

Profit-hungry IT providers can drive down the cost of operating CFINs by aggressively embracing

emerging technologies like:

· SaaS and Web 2.0. In a level-one CFIN scenario, enterprise soware vendors like Oracle can

use real-time usage data collected from their SaaS-enabled applications to determine clients’

least favorite features; they can then establish a priority list of features that need innovation to

retain and boost customer loyalty. Similarly, Web 2.0 technologies like collaborative ideation

tools (known as “jamming” soware) could make it cost-effective for consulting firms to

co-create groundbreaking solutions with their level-three CFIN clients on the Net instead of

engaging clients in time- and resource-consuming face-to-face workshops.

· SOA. In order to rapidly plug creative new global partners into the CFIN collaboration mix to

meet shiing clients’ innovation requirements, tech vendors must ask their own CIOs to buildinto their IT systems well-defined and reusable business and technical interfaces based on SOA.

Case in point: Capgemini’s online jamming sessions. Under the leadership of its CTO Andy

Mulholland, Capgemini is aggressively investing internally in Social Computing tools to drive fluid

and dynamic online interactions with its clients and ecosystem partners. For instance, Capgemini






8

used to host face-to-face innovation workshops with its level-three CFIN clients in brick-and-

mortar facilities. But nowadays, Capgemini’s consultants conduct Web 2.0-enabled “online jamming”

sessions with tech-savvy client execs to co-innovate transformational business solutions in real time.

5. Localize CFINs And Cross-Pollinate CFIN Best Practices Across Regions

e West won’t remain the epicenter of global Innovation Networks for long. Billions of BRIC

consumers are already fueling global demand for innovative products and services. And BRIC

suppliers are setting the global standards for innovation across many industries — as evidenced by

the $2,500 car that India’s Tata Motors launched and the alternative energy solutions that Brazilian

biofuel producers are developing.11 To boost the market relevance of their CFIN initiatives and cross-

pollinate technical and market insights across all regional markets, multinational tech vendors must:

· Localize their CFIN programs by building regional ecosystems. With enterprise IT spending

growing fast in emerging markets like China and India, tech vendors must learn to adapttheir CFIN approaches to best serve corporate clients in these red-hot markets. For instance,

if SAP wants to co-innovate with banking clients in India, it must extend its Industry Value

Network for Banks — a level-two CFIN initiative involving C-level banking clients — to also

include Indian community leaders and non-government organizations (NGOs). Why? e

buying habits of India’s vast rural consumer market, which Indian and foreign banks are eager

to penetrate, are heavily influenced by local community leaders and NGOs whom the rural

population trusts.

· Deploy “global knowledge brokering” processes and systems. Global leaders like Best Buy

and Whirlpool have learned to share innovative best practices across their regional units.12

Taking a cue from these pioneers, IT vendors must build a centralized database that isconstantly fed with codified knowledge on best practices, lessons learned, as well as customer

and partner contacts associated with individual CFIN projects successfully completed across

multiple regions. at way, a rural mobile banking solution that Microso co-invented with

India’s Punjab National Bank and local tech partners can rapidly be transformed by a Microso

banking client in Johannesburg to serve South African villages.

Case in point: Best Buy. e $40 billion electronics retailer giant has empowered its 140,000

employees scattered across the US, Canada, and China to leverage the insights gathered in their

daily customer interactions to co-create innovative user experiences with end consumers.13 e

best co-created inventions may eventually scale across multiple or all Best Buy stores worldwideor may simply make the originating store more responsive to its local customer base. is

bottom-up, localized CFIN approach is the cornerstone of Best Buy’s ongoing transformation to

Customer-Centricity, a customer- and employee-focused philosophy it introduced in 2003.14 As

Best Buy globalizes — it has big plans for emerging markets like Mexico and India — it is deploying

knowledge-brokering processes to accelerate the transfer of innovation insights and partnerships

across regional stores and business units.






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TECH CEOS SHOULD ENGAGE EMPLOYEES AS CFIN TRANSFORMATION PARTNERS

e days of the command-and-control management style are numbered. Assertive Gen X workers

and collaboration-minded Gen Y employees won’t join or stay too long in firms locked in rigid,

hierarchical organizational structures. ey would rather work in a collaborative environment that

promotes bottom-up decision-making. You could call it “Corporate Culture 2.0.” In this new fluid

and dynamic organizational context, the CEO’s job is no longer to command his or her troops (i.e.,

explain the “how” of a strategy) but rather to communicate the “commander’s intent” (i.e., the “why”

of a strategy). ey should then allow the troops to plan out and execute the appropriate strategy

against that intent. Empathetic CEOs should exploit this looming shi in tech firms’ organizational

dynamics and engage their employees as trusted partners in the execution of their CFIN strategy.

How? By:

· Candidly explaining to employees why CFINs are key for long-term success. Rather than

hiding behind spreadsheets with indecipherable cost-benefit analysis data, CEOs should hosttown hall meetings or use their internal blog to articulate in plain English why a CFIN strategy is

essential for the firm’s sustainable growth. For instance, CEOs of tech vendors with a large R&D

group eager to deploy an Innovation Network could emulate A. G. Lafley, CEO of Procter &

Gamble. is is how the head of P&G explained to his R&D staff the business rationale for

launching its Innovation Network: “Finicky customer demand and brutal competition require us

to constantly innovate. We need to build an Innovation Network so we can harness all the help

we can get, internally and externally, to innovate faster, better, and cheaper. We have no choice.”

· Leading by example and putting their money where their CFIN mouth is. Tech CEOs must

overcome employee skepticism and cynicism about their CFIN strategy by backing it with

strong organizational resource commitments. Take the globalization aspect of CFINs: Tech

CEOs who really want to localize their CFINs for emerging markets must send their most

promising execs to cultivate client intimacy and nurture regional ecosystems in BRIC markets.

at’s exactly what the CEOs of Best Buy and Cisco did; they got their vice chairman and chief

globalization officer, respectively, to spend a few years in China and India, countries both

vendors believe are vast sources of, as well as huge markets for, technology innovation.

W H A T I T M E A N S

TECH VENDORS WILL HAVE TO ADOPT CFINS OR RISK GOING BUST

Some tech CEOs might be put off by the laundry list of transformational initiatives prescribed

in this report. After doing a back-of-the-envelope cost-benefit analysis for these initiatives, they

might decide the investments are not worthwhile and will continue to run their business as usual

by maintaining their vertically integrated, customer-blind innovation model. But skeptical CEOs

who opt for inaction over CFIN adoption will incur a huge opportunity cost for their firm. Their tech

companies will suffer steep shareholder-value destruction, as their lack of CFIN preparedness will

soon expose their fragile organizations to two disruptive, global, major market forces:






10

1. The blurring of software and services that turns existing partners into new

competitors. Systems integrators, especially Indian offshore IT service providers like

Infosys and Wipro, are rolling out their own “solution accelerators” — prepackaged and

configurable business apps for specific verticals; these are starting to encroach on the

home turf of their erstwhile partners, the packaged app vendors.15 The result? Enterprise

software purveyors like Oracle and SAP will have no choice but to keep expanding their

innovation ecosystems and get ever more intimate with their clients in order to deliver

highly personalized business innovation to their clients. Forrester expects software

vendors to outsmart service providers by more aggressively adopting CFINs — especially

in emerging markets, where the division between software and services isn’t yet as clearly

drawn as it is in mature markets like the US and Western Europe.

2. The rise of “Chindian” enterprise IT clients that spurn vendors inept at client intimacy.

Tech vendors increasingly rely on business from China and India — or “Chindia” — to meet

their growth targets.16 Many of these Chindian deals are CFIN projects in which ambitious

clients co-innovate transformational business solutions with their tech providers — such as

IBM’s initiative with Chinese retailer Yansha or SAP’s deal with Tata Motors. Not surprisingly,

multinationals like Capgemini, Cisco, IBM, Microsoft, and SAP are using Chindia as their

laboratory to experiment with new customer engagement models and ecosystem

development approaches that enable seamless co-innovation with local clients. For

instance, through its multiple IT initiatives across rural India, IBM is learning how to engage

local community leaders and NGOs in developing nations in win-win co-innovation

partnerships.17

These business model experiments in India and China will, if successful, incent tech vendors

to scale them up and institute them as world-class standards for the rest of their global

organizations. In 2030, business schools will be publishing case studies on how China and

India provided the organizational blueprint for the evolution of tech providers into globally

adaptive organizations in the 21st century.

ENDNOTES

1 Customer-focused Innovation Networks (CFINs) represent a new client-centric business model that lets

corporate clients’ input and active participation shape and optimize the collaborative innovation activities

that take place within global IT ecosystems. See the April 22, 2008, “Customer-Focused Innovation

Networks Emerge” report.

2 In 2004, Forrester predicted that vertically integrated invention-to-innovation cycles across industries —

including in the global IT services sector — would be deconstructed into a far more productive ecosystem

of roles for firms, including the roles of Inventor, Transformer, Broker, and Financier. See the June 17, 2004,

“Innovation Networks” report.












11

3 Forrester proposes three categories of CFIN, differentiated by the degree and impact of client participation

as well as the client value associated with the innovation that the CFIN generates. Level-one CFINs yield

cross-industry, repeatable solutions. Level-two CFINs produce industry-specific, configurable solutions.

And level-three CFINs produce client-specific, breakthrough solutions.

4 For instance, the CFIN Governance Committee in a product-centric hardware vendor will ensure that the

firm isn’t over-investing in highly personalized level-three CFIN initiatives that don’t yield economies of

scale and volume.

5 Each project is presented to the FOAK governance board with a list of potential clients and possible

ecosystem partners that are interested in collaborating with IBM on it. is ensures that the proposed FOAK

project isn’t just an internal pet project but a market-driven initiative. Within three months of the approval,

an individual FOAK project team is expected to engage a specific client and start working with them.

6 Internet technologies and Social Computing are changing the ways in which companies involve consumers

in the creation of new products, services, and experiences. Forrester calls this shi consumer-driveninnovation. See the May 26, 2006, “e Essentials Of Consumer-Driven Innovation” report.

7 Goldman Sachs projects that as their economies swell, the BRIC countries’ consumer spending power will

increase much faster than that of their peers in developed nations. Source: Goldman Sachs, “How solid are

the BRICs?” Global Economics Paper No. 134, December 2005 (http://www2.goldmansachs.com/hkchina/

insight/research/pdf/BRICs_3_12-1-05.pdf).

8 Growth-seeking tech CEOs can learn from pioneers like BT, Eli Lilly, Intel, and Whirlpool which

governance structures, processes, skills, and tools that they must invest in to seed R&D culture. See the

March 20, 2006, “Transforming R&D Culture” report.

9 IBM’s On Demand Innovation Services (ODIS) is a CFIN program that draws resources from a team of up to

3,000 experts within IBM Research who work closely with clients to devise tailored solutions that address

clients’ complex business problems. See the June 22, 2005, “IBM Delivers Innovation — On Demand” report.

10 Matt Bross positioned innovation brokers in India, China, Japan, UK, and Silicon Valley to source

promising new technologies from local universities and startups. Such externally sourced inventions have

contributed to ₤500 million in potential new product and service revenues since 2002.

11 India and China, with their fast-growing markets and rapidly expanding innovation capabilities, are

redefining the historical US-centric — and unipolar — world order for the tech industry. See the November

1, 2005, “How India, China Redefine e Tech World Order” report.

12 Whirlpool has already trained more than 15,000 of its more than 80,000 global employees on how to

embed innovation into their daily activities. It has also deployed “global knowledge brokering” processes to

cross-pollinate technical and customer insights across all regional markets. See the June 19, 2006, “Market-

Focused R&D Elevates Whirlpool Business Performance To New Level” report.


















12

13 Best Buy’s employees — known as the “Blue Shirts” — receive training on the needs, lifestyles, and shopping

preferences of Best Buy’s core customer prototypes (segments), along with financial acumen to better

understand profit levers. Combining this knowledge with their frontline experience, they are invited to

experiment with things like merchandise displays, value propositions, or backroom operations and thenmeasure the results to verify their initial customer hunch.

14 Best Buy’s Customer-Centricity philosophy has led to a new operating model and a new mindset about the

role of those employees closest to the customer.

15 IT and product development services providers are developing solution accelerators — which Forrester

has defined as predeveloped soware that technology services firms use to automate a particular business

process or aspect of product development — where 30% to 70% of the code can be reused across clients. See

the October 29, 2007, “Solution Accelerators Will Disrupt e IT Services Landscape” report.

16 According to the World Bank, even as the world economy slips into a prolonged recession, the economies

of China and India are firing on all cylinders, growing in excess of 8%. In 2007 alone, SAP acquired six newcustomers for each working day, and IBM generated a total of $1 billion in revenues from its India sales.

17 Recognizing that global economic power is shiing from the West to BRIC nations, IBM is using its

Indian operations to experiment with a new organizational model, one that transforms IBM from a

monolithic Western multinational to what Forrester calls a globally adaptive organization (GAO) — a

socially responsible learning organization that relies on globally networked assets, talent, knowledge, and

partnerships to anticipate as well as respond to geopolitical, sociocultural, and market shis worldwide in

an efficient and flexible manner. See the March 5, 2007, “India Leads IBM’s Global Business Model” report

and see the December 13, 2006, “e Rise Of Globally Adaptive Organizations” report.









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