Innovation is a key ingredient of success in every industry. To succeed, businesses must continually surge forward and produce new and better ideas. Information Technology (IT) is ideally suited to be a company’s innovation champion. The fact remains that IT managers want to help their businesses succeed through innovation. At the same time, business executives want to trust IT to deliver the innovation that creates competition advantage. And yet, something seems to stand between the universally shared desire for business improvement through IT innovation and its translation into action.

The status of innovation is being reconsidered in many organizations. BusinessWeek magazine recently reported that while executives recognize innovation as playing a vital role in performance and growth, they are frustrated by their return on innovation, and are making innovation less of a priority. Furthermore, IT is playing a smaller role than it should in business innovation.

Smart companies resist the temptation to stop spending on innovation. Periods of slower growth have, in the past, allowed more aggressive companies to create or extend their competitive advantage.

The Three Degrees of Innovation

The Higher One Climbs, The More One Needs an Innovation Network

Every business person dreams of changing the world through innovation. According to Harvard Business School professor and author Clayton Christensen, innovation can then be divided into three discrete subsets:

• Derivative Innovation
• Platform Innovation
• Breakthrough Innovation

TCS Approach

TCS believes innovation can be broadly defined as an idea that makes a material difference to an organization’s current capabilities or creates a future capability.

At TCS we apply Professor Christensen’s innovation segmentation as follows:

• Derivative or sustaining innovation that continually provides improvements on current services and solutions.
  In TCS’ experience, many IT shops fail to achieve this level of innovation. Only if an organization facilitates derivative and platform innovation will IT even be considered eligible for a seat at the table when it comes to developing the business strategy.
• Transformational improvement or platform innovation that facilitates a swift move to ‘visible adjacencies’ in terms of emerging technologies as well as markets. TCS has found the best way to identify and select a promising idea is by launching a series of low-cost “market probes” and to be ruthless in deciding which ideas live or die.
• Disruptive or breakthrough innovation that enables customers to access potentially game-changing or/and new market business models.  Breakthrough innovation is rare, and the competitive advantage it creates is usually fairly long-lived. TCS pioneered the creation of the India software industry, one that is built on the pillars of high quality, global delivery and competitive cost. It is a breakthrough innovation which dates back more than 40 years and is still going strong

TCS' “Co-Innovation Network” (COIN) ™

The key to generating, sustaining, and profiting from innovation is to participate in a multi-organization innovation network or what TCS refers to as its “Co-Innovation Network” (COIN)™, a collaborative alliance of entities across an organization’s extended ecosystem that creates a funnel of ideas full and rich enough for some of them to survive the journey from thought to business-transforming action.