Harvard Business Publishing

I just published an extensive case study on ICICI Bank, India's largest private bank, and one of India's most tech-savvy and innovative firms. In this study, I explain how ICICI is cashing on huge market opportunities by harnessing two disruptive forces -- globalization and rapid technology evolution. The result? Today ICICI Bank boasts $19 billion in market cap and its assets are worth above $100 billion.

What's ICICI's secret? An uncanny ability to continually transform its financial products, operational processes, and customer-facing services by exploiting world-class technologies. Unlike most Western CEOs, Kamath believes that business and technology are intertwined and as such must be integrated into a coherent "business technology (BT)" strategy, which Kamath summarizes into a neat value equation: (People x Process)^Technology = Value.

Under Kamath's leadership, ICICI has invested heavily in a flexible and open IT infrastructure, which is unburdened with legacy systems (e.g., ICICI has no mainframes!) and can be maintained at one-tenth the cost of foreign banks.

But ICICI's competitive asset is its unique innovation model. Indeed, to keep up with his firm's escalating demand for tech-enabled business innovation, ICICI's CTO Pravir Vohra has instituted a global Innovation Network that speeds the discovery and deployment of promising technologies across ICICI's global organization.

Rather than inventing new technologies in-house from scratch, ICICI's CTO office brokers its global business units' access to a bevy of internal and external inventions, and helps swiftly transform them into business value for the entire group. As a result, ICICI has been able to rapidly ramp up its retail banking customer base to 30 million, enrolling a whopping 7.6 million new clients in 2006 alone. ICICI has also steadily expanded into 18 international markets including Singapore, Dubai, Russia, Germany, South Africa, UK, and the US.

Can other CIOs/CTOs emulate Vohra's success as an Innovation Network broker? Yes. Here are Forrester's five suggestions to tech leaders eager to replicate ICICI's innovation capabilities in their own organization:

1. Internal innovation networking is as critical as external partnering. Inspired by P&G's Connect & Develop program, many CIOs/CTOs are setting out to build external innovation communities, made up of outside partners like academic R&D labs, startups, tech vendors, etc. But before they jump onto that external gold rush bandwagon, tech leaders must strive to extract innovation gold from their internal mines. In particular, tech execs who work in diversified conglomerates or multinationals must, as Vohra did, invest in collaboration software like innovation management tools to harvest and cross-pollinate innovative ideas and best practices across business lines and regional units.
2. Pick promising ideas based on their business impact, not technical feasibility. Innovation networks swell the amount of promising technology inventions that tech leaders can avail. But how can CIOs/CTOs separate the wheat from the chaff? By picking those inventions that will have the highest business impact, and not necessarily the technically easiest to implement! At ICICI, the CTO office boasts the Technology Management Group (TMG), made up of business analysts. Once a promising tech invention or a tech-enabled business opportunity is identified internally or externally, TMG's business analysts collaborate with relevant ICICI business units to build the business case for the adoption of these promising technologies and provide an implementation road map.
3. Speed innovation projects' time-to-value, rather than obsessing with costs. The CIO/CTO office's key objective shouldn't be so much to reduce the costs of implementing an innovative tech project as it is to speed what Vohra calls its "time to value" -- i.e., to help their organization capture a promising technology's business value as quickly and as fully as possible. For instance, ICICI's CTO office launched iMobile -- a comprehensive mobile banking application -- to market in just 180 days, with the full feature set and functionalities that are available on the Internet banking platform.
4. Train your staff to think and act in terms of $$$$ -- not 0 and 1. CIOs/CTOs can't drive customer-focused and market-relevant innovation unless they boost the business acumen of their technology-biased staff. The best way to cultivate innovation from IT staffers is to get them attuned to the firm's mission by rotating IT talent into the business and bringing business execs in to fire up IT staffers with a passion for the firm's mission. Such business-savvy IT staffers can then, as Vohra puts in, "can systematically and instinctively articulate the monetary value of an emerging technology like Web 2.0 in business terms that a general manager can understand."
5. Want to build an R&D function? Forget about it! Several CIOs and CTOs are eager to set up a dedicated R&D function inside their tech organization, hoping to crank out inventive tech solutions that can be patented. But as Vohra points out, internal R&D can never match the breadth and depth of expertise available in external innovation networks, and patent filing is a very expensive and time-consuming process. ICICI's industry first-mover advantage doesn't lie in patenting inventions, but in rapidly transforming them into a strategic market differentiation.

I am hoping that tech leaders will follow Vohra's lead in building dynamic Innovation Networks, so their business units seamlessly collaborate with internal and external partners to drive more innovation faster and cheaper. But to effectively orchestrate this fluid ecosystem, CIOs/CTOs must act less as inventive technologists and more as business-savvy strategists with strong innovation brokering skills.