CIOs of the digital era need to focus on business model innovation, rather than only on business product innovation, said Kishor Patil, CEO and MD of KPIT Technologies. This strategy, according to him, can transform businesses and create new doors of monetization. He was speaking at the CIO100 2017 session on “Business model innovation and how CIOs can enable it”.
Patil pointed to a case when the stock value of five transformative organizations on the Standard and Poor’s 500 Index grew by $260 billion, whereas the remaining 450 companies experienced a loss of an equal amount. According to Patil, the growth of these five companies, namely Facebook, Apple, Amazon, Netflix and Google, was because of their greater focus on business model innovation.
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“Product innovation is one thing, but converting it to a different product or service is another. The focus has to shift from the traditional model of innovation, which is product innovation, to business innovation”.
Of the total key performance indicators, which are product innovation, operational innovation, customer experience innovation and business model innovation, most businesses comparatively give low priority to business model innovation, according to KPIT.
“I think the reason why businesses are not implementing business model innovation through processes like network orchestration is that it disrupts the core of enterprise operations and involves complex technologies”, stated Patil.
Patil emphasizes the significance of business model innovation in the Indian scenario through examples such as using Wi-Fi in public buses as a platform for advertising and digital strategy.