Harvard Business Publishing

While Western economies are slipping into a recession, India's own economy is showing no sign of fatigue and is poised to expand at 7.5-8% in 2008. As a result, all the Indian CEOs I interact with are actively seeking to innovate and transform their products, services, processes, and even business models in order to drive global competitive advantage. And they are willing to harness cutting-edge technologies to fine-tune their market offerings, operating models, and customer engagement scenarios.

This is terrific news for tech vendors, both Western and Indian, as corporate India's strong appetite for tech-enabled business innovation could offset the slowdown in IT consumption in the Western hemisphere. But to effectively capture the growth opportunities in India, I suggest that tech providers help Indian clients innovate on five complementary dimensions:

1) Business model innovation. Recognizing that it's increasingly difficult to differentiate based on products and services alone, Indian CEOs seek to reinvent their entire business models. How? By either specializing and partnering more intensively, shaping new value propositions and new pricing models, redefining an existing industry, or even creating an entirely new industry. Consultants like Accenture and enterprise software players like Oracle must share with Indian clients their latest technologies that give them broader possibilities to experiment with and launch disruptive new business models more quickly. These vendors must back these tech offerings with a business road map for their strategic deployment.

2) Organizational innovation. Even as they grow rapidly, Indian companies with global ambitions like Bharti and Suzlon do not want to emulate Western multinationals plagued with divisional silos and a hierarchical reporting structure. Rather, open-minded Indian firms want to evolve into globally adaptive organizations, infused with a collaborative corporate culture supported by a flatter decision-making structure. This should be music to the ears of collaboration tool purveyors like IBM and Microsoft, which can equip Indian companies with enterprise Web 2.0-enabled employee motivation technologies like prediction marketplaces, idea management apps, and employee blogs. Armed with these tools, Indian firms can collect and rapidly act on their ambitious young workers' ideas -- half of India's workforce is less than 25 years old -- for seizing emerging global opportunities.

3) Operational innovation. To stay lean, Indian companies are striving to transform and weed inefficiencies out of their business processes, such as supply chain and customer service. How can tech vendors help Indian clients achieve operational excellence? For instance, supply chain app vendors like SAP can help Indian manufacturers run just-in-time factories by providing them with RFID-enabled visibility into their inbound logistics network. And outsourcers like Wipro and HP can go one step further by taking over their Indian clients' entire business processes and continually innovating them under a transformational outsourcing deal.

4) Product innovation. Indian manufacturers struggle to churn out more products at a faster pace and at a lower cost as they seek to meet the exploding demand of India's consuming middle class, which is expected to emerge as the fifth largest in the world by 2025. Product life-cycle management (PLM) vendors, like Siemens PLM Software, and innovation management tool vendors, like Imaginatik and NineSigma, have a unique opportunity to introduce Indian manufacturers to a structured and team-based approach for developing and launching their products. Armed with these vendors' project management and virtual collaboration tools, Indian manufacturers can effectively engage all internal and external Innovation Network partners to speed their time-to-market while curbing their overall development costs.

5) Service innovation. Indian firms are multiplying their efforts to please finicky Indian consumers, especially the tech-savvy Gen Y buyers who are not as loyal to brands as previous generations were. In particular, Indian corporations want to harness social computing tools and technologies to reshape customer service by engaging Net-savvy, socially aware consumers as value co-creators rather than as just passive buyers. Tech vendors like Infosys with strong domain expertise in consumer product industries should help Indian firms deploy Web 2.0 tools like blogs and Second Life so that the they can collaborate with -- instead of just selling to -- well-informed Indian end-user communities.

Till now, global tech vendors have treated India merely as a low-cost talent supply base. But as whole swaths of the red-hot Indian economy, from retail to telecom to transportation to healthcare, are being deregulated, IT providers must also seek to fulfill Corporate India's huge appetite for tech innovation. In my next post, I will specifically describe how Indian tech purveyors (e.g., Infosys, TCS, Wipro) should go about cracking the post-American market that is growing so fast in their own backyard.