The New Age of Innovation

ICICI allows us to walk through the entire framework of capability building (see the figure at Business Process and ICT Architecture) and identification of business processes and the supporting social and technical architecture as sources of advantage.  ICICI’s performance has been stellar. But such growth and increase in scope also carries their own seeds of risk. The robustness of the ICT enterprise architecture must allow not only for rapid change but also for compliance. A large firm is subject to the requirements of Sarbanes-Oxley. Furthermore, a bank should also be compliant with the requirements of Basel II. It is not only about external compliance. Compliance with internal delivery norms and policies are critical as well. Even if the processes are robust, training a very large number of new people (ICICI recruited 20,000 new employees in 2006) will strain any system. The risks are around the following parameters:

1. As the number of customers and vendors increases, how can ICICI retain its N = 1 and R = G orientation? What analytic capabilities are needed to make this work?

2. Can the architecture of the ICT system automatically identify all the cross-impacts of any single change to a single subprocess such as minimum balance requirements? As the systems become complex because of the variety of products and services, as well as the choices that individuals can exercise, the architecture of the system must automatically sense and adjust itself. Can the system self-monitor? Will the ICICI face the same challenges that legacy systems face? How can the firm overcome this?

3. Can social infrastructure keep pace with the rate of change—new business models, scale, and scope with a large number of new employees? As the battle for talent in India intensifies, what is the quality control process for retaining the best talent and protecting the company’s culture?

ICICI has been used as an illustration because its strategy is still evolving and its competitive advantage both in India and increasingly in its global operations is based on its deep understanding of the business models and its links with business processes.

by C.K. Prahalad and M.S. Krishnan, Via The New Age of Innovation: Driving Cocreated Value Through Global Networks (2008)

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