May 8, 2008

The Tech CEOs Guide To Implementing Customer-Focused Innovation Networks

by By Navi Radjou for Vendor Strategy Professionals

Making Leaders Successful Every Day

For Vendor Strategy Professionals

The Tech CEOs Guide To Implementing CustomerFocused Innovation Networks

This is the third document in the Driving Customer Co-Innovation In Global IT Ecosystems series. by Navi Radjou with Pascal Matzke and Janine Liu

May 8, 2008

EXECUT I V E S U M MA RY
To win in the emerging partner-rich, user-empowered global IT ecosystem, Forrester believes that tech providers must form customer-focused Innovation Networks (CFINs) in which they co-create innovation value with their corporate clients. But implementing CFINs in a tech rm wont be a walk in the park, as this disruptive business paradigm challenges deeply rooted cultural norms and well-entrenched organizational structures. As old habits die hard, this document details ve specic steps that visionary tech vendor CEOs should immediately implement to drive the organizational transformation required to position their rm for CFIN success.

TABLE O F CO N T E N TS
2 Tech CEOs Must Overhaul Their Firms Culture For CFIN Success 1. Institute An Enterprisewide Governance Structure To Optimize The Entire CFIN Portfolio 2. Incent Solution Delivery Teams To Innovate Around Customers Customers Needs 3. Transform Insular R&D Culture To Boost Customer Responsiveness 4. Invest In Web 2.0, SaaS, And SOA Technologies To Net-Enable CFIN Collaboration 5. Localize CFINs And Cross-Pollinate CFIN Best Practices Across Regions 9 Tech CEOs Should Engage Employees As CFIN Transformation Partners
WHAT IT MEANS

N OT E S & R E S O U R C E S
For this report, Forrester interviewed leading IT providers in North America, Europe, and India, including: Accenture, BT, Capgemini, IBM, Infosys, SAP, Sapient, TCS, and Wipro.

Related Research Documents Customer-Focused Innovation Networks Emerge April 22, 2008
How IT Consultants Can Finally Prot From Clients Business Innovation Demands May 18, 2007 The Emerging IT Ecosystem January 2, 2007 Innovation Networks: Global Progress Report 2006 June 14, 2006

9 Tech Vendors Will Have To Adopt CFINs Or Risk Going Bust

2008, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copy or slide of each gure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to www.forrester.com. Information is based on best available resources. Opinions reect judgment at the time and are subject to change. To purchase reprints of this document, please email resourcecenter@forrester.com.

The Tech CEOs Guide To Implementing Customer-Focused Innovation Networks

For Vendor Strategy Professionals

TECH CEOS MUST OVERHAUL THEIR FIRMS CULTURE FOR CFIN SUCCESS In a recent report, Forrester predicted the emergence of a client-centric business model that we call customer-focused Innovation Networks (CFINs).1 CFINs let corporate clients insightful input and active participation shape and optimize the collaborative innovation activities that take place in global IT ecosystems (see Figure 1). But like any disruptive business paradigm, CFINs adhere to the no pain, no gain rule:

CFINs boost vendors time-to-market, protability, and customer loyalty. In CFINs,

sophisticated clients plug directly into tech rms Innovation Networks and collaboratively shape their dynamics. The result? Vendors gain immediate feedback on new products and services, which boosts their oerings market relevance and protability. IT suppliers that embrace CFINs also earn corporate customers undying loyalty as they empower them to drive the four Innovation Network roles, putting clients interests before their own.

Figure 1 A New Business Model For Success: Customer-Focused Innovation Networks

Tech Corp.

IT provider ecosystems

Enterprise customers

Creative clients act as co-Inventors Lead customers and early adopters become the Transformers Risk-sharing clients willingly assume the role of Financiers Resourceful and loyal customers behave as Brokers
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The Tech CEOs Guide To Implementing Customer-Focused Innovation Networks

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There is no free lunch: CFIN success requires fundamental organizational transformation.

While the benets of a networked business model like CFIN are evident, paradoxically, its implementation success largely depends on changes that tech vendors need to infuse into their internal organization. These changes arent for the faint-hearted tech CEO. Why? Because tech CEOs who adopt the CFIN model will need to transform and reinvent their organization along two distinct yet complementary dimensions. First, they need to train their technically minded sta to cultivate client intimacy. Second, they have to deconstruct their vertically integrated and rigid R&D and go-to-market approaches into uid and partner-rich Innovation Networks (see Figure 2).2

Tech providers CEOs must carefully lay out the organizational groundwork needed for their rm to ease into the CFIN voyage and successfully reach its destination. To maximize the upside of CFIN adoption while minimizing its organizational pitfalls, Forrester proposes that tech vendors CEOs proactively initiate and implement a ve-point organizational transformation agenda. In no particular order of priority/action, these ve points are:
Figure 2 Vendors CFIN Success Hinges On Two-Dimensional Organizational Transformation
CFIN-anchored vendor organization

Tech Corp.
Partner-rich Innovation Networks

Innovation approach

Current vendor organization

Tech Corp.

Enterprise customers

Vertically integrated innovation model Customer-blind Market orientation

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Customer-focused

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The Tech CEOs Guide To Implementing Customer-Focused Innovation Networks

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1. Institute an enterprisewide governance structure to optimize the entire CFIN portfolio. 2. Incent solution delivery teams to innovate around customers customers needs. 3. Transform insular R&D culture to boost customer responsiveness. 4. Invest in Web 2.0, software-as-a-service (SaaS), and service-oriented architecture (SOA) technologies to Net-enable CFIN collaboration. 5. Localize CFIN ecosystems and cross-pollinate CFIN best practices across regions. 1. Institute An Enterprisewide Governance Structure To Optimize The Entire CFIN Portfolio Imbued with a Let a thousand CFINs blossom philosophy, CFIN pioneers like Accenture, Cisco Systems, and SAP have allowed their various functions and practices to launch a plethora of customer co-innovation initiatives labeled Global Customer Community or Customer Innovation Network. Unfortunately, without an integrated view of their disparate CFIN programs, these vanguard vendors risk diluting their valuable innovation resources by investing in multiple redundant or nonstrategic CFIN projects. To optimize the value of their entire CFIN investment portfolio which encompasses level-one, level-two, and level-three CFIN projects these IT providers CEOs must:3

Create an enterprisewide CFIN governance committee. This committee should boast

representation from business unit (or practice) leaders, as well as heads of R&D, operations, sales and delivery, marketing, and partner ecosystem groups. This steering committee should not seek to micro-manage individual CFIN projects, which tend to emerge rather organically. Rather, the CEO should task it with driving cross-unit CFIN synergies and balancing rmwide resource allocation between level-one, level-two, and level-three CFINs in a way that maximizes client value while boosting the vendors protability and brand equity (see Figure 3).4

Empower this committee to nix unprotable CFIN initiatives. By gaining a birds-eye view
of various CFIN initiatives undertaken across business units or practice areas, the committee can drive innovation synergies. But thats just the rst step. The CEO should also empower this committee to put a brake on internal functions pet projects with limited client value and to fast-track those customer co-innovation projects that help the rm swiftly respond to competitive threats and seize new market opportunities worldwide.

Case in point: IBMs First-of-a-Kind (FOAK) program. IBMs FOAK program is a level-three CFIN initiative that allows forward-thinking clients to co-nance and co-invent an industryleading business solution with IBM and its partner ecosystem. IBM has instituted a companywide governance board with representation of senior execs from R&D, software and services groups, and sales and distribution to oversee all its FOAK programs. This boards mandate is to optimize the individual and collective value of FOAK programs throughout their life cycle.

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The Tech CEOs Guide To Implementing Customer-Focused Innovation Networks

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Once a quarter, this board reviews and approves new CFIN projects that IBM researchers and sales teams have jointly proposed.5 It identies and integrates redundant or overlapping proposals to drive synergies. Each quarter, each FOAK project team presents a progress report to the review board, ensuring that resource bottlenecks are proactively identied and rapidly resolved. The board also tracks FOAK projects during the two years following their completion to ensure that the customized solution assets resulting from client-specic projects are rapidly scaled up and commercialized as repeatable second or even third of a kind solutions.
Figure 3 Vendors Need A New Governance Structure To Maximize Their CFIN Investments
The CFIN governance committee can track enterprisewide CFIN initiatives using portfolio management techniques: An example of a global IT consulting rm

Business metrics Get 20% of total revenues from BRIC markets by 2010 Make beachhead in new industries and sectors Demonstrate thought leadership in European markets 6 months 1 year +
B

Type of CFIN initiatives (% of innovation portfolio)

Level-one CFIN Level-two CFIN

Level-three CFIN

Ongoing

Prioritizing CFIN initiatives Cost A. Indias rst RFID- US$15 million enabled end-to-end supply chain Metric Grow Indian market revenues by 50% in 2009 Strategic client(s) Time to innovation involved delivered Reliance Group 14 months

B. SaaS-enabled PLM US$2.5 million solution for small and medium-size business (SMB) sector C. Social Computing US$1 million proof of concept in European pharma sector
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Achieve SMB leadership 10 SMB clients from 6 months by 2010 manufacturing vertical

To be recognized as a thought leader by European CEOs in The Economists next annual survey

Top four European 3 months pharma companies

Source: Forrester Research, Inc.

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The Tech CEOs Guide To Implementing Customer-Focused Innovation Networks

For Vendor Strategy Professionals

2. Incent Solution Delivery Teams To Innovate Around Customers Customers Needs In fast-moving B2C industries like retail, consumer goods, healthcare, telecom, and nancial services, CEOs expect their IT vendors to help them decipher their nicky end users rapidly changing buying preferences, especially in the dynamic Brazil, Russia, India, and China (BRIC) markets. To drive market-focused co-innovation with their clients, tech vendors professional services teams should:

Rely on end users requirements to shape customer co-innovation eorts. Tech vendors

must extend their customer requirements analysis beyond brainstorming workshops with execs from their corporate clients. Instead, these providers must design CFIN scenarios that exploit Social Computing tools like interactive prototyping and ethnographic eld studies to capture end consumers latent requirements. They must then use the resulting end consumer insights as the single truth to anchor their creative collaboration with enterprise clients and ecosystem partners.6

Acquire or partner with BRIC-focused market research rms. Goldman Sachs projects

that the consuming middle class in the BRIC nations will quadruple in the next decade and contribute nearly 70% of global growth by 2040.7 To help clients decipher the socio-economic attributes of middle-class consumers in BRIC markets, tech vendors, especially multinational IT suppliers, must partner with BRIC-focused market research and consumer analytics rms like Ogilvy & Mather and Social Solutions. Interestingly, oshore IT vendor Satyam has gone one step further, acquiring Caterpillars market research and customer analytics arm. Satyams goal? To weave end user insights into the CFIN services it aims to provide to its auto and industrial equipment clients operating in BRIC markets.

Case in point: Accentures Customer Innovation Networks. To drive end user-focused CFIN collaboration with clients in retail and consumer product industries, Accenture has set up four Customer Innovation Networks physical facilities with rich multimedia capabilities in Chicago, Dsseldorf, Milan, and Shanghai. Within these facilities, Accenture hosts brainstorming workshops with its forward-thinking corporate clients and their trading partners to co-develop innovative business solutions aimed at better connecting with the end consumer. The big bonus for Accentures enterprise clients attending these experiential workshops is that they can actually prototype in real time and try out in person the creative solutions co-developed with Accenture. For instance, a European retailer operating in China can actually live the Customer-Centricity Experience by experimenting with innovative and cutting-edge technology solutions like Web 2.0 that will dramatically improve the way retailers interact with tomorrows Chinese consumers. 3. Transform Insular R&D Culture To Boost Customer Responsiveness CFINs rely on Innovation Networks that augment, rather than supplant, internal R&D capabilities. But tech vendors must strive to:

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The Tech CEOs Guide To Implementing Customer-Focused Innovation Networks

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Retool their insular R&D assets to win in partner-rich, market-focused CFIN environments.
IT vendors can learn from Eli Lilly, Nokia, Tata Consultancy Services (TCS), and Whirlpool, which are already transforming their rigid R&D cultures by retraining their scientists and engineers. The objective is for these technologists to act less as introverted Innovation Network Inventors and more as outward-facing Brokers and Transformers of external inventions sourced from global partner ecosystems.8

Connect their ivory-tower R&D labs directly with enterprise clients. Vendors with rich R&D

resources need to infuse the CFIN focus into all of their functions, including R&D. How? By instituting programs like IBMs On Demand Innovation Services and BTs Customer Innovation Engagement Programme, which directly plug these vendors R&D sta into CFIN consulting projects.9

Case in point: BTs Customer Innovation Engagement Programme. Since 2002, CTO Matt Bross has shaken up 100-year-old BTs vertically integrated R&D value chain by opening it up to a global Innovation Network of partners.10 BTs CTO oce also recently launched a Customer Innovation Engagement Programme, which aims to drive level-three CFIN projects in collaboration with senior business and IT execs from strategic client accounts. In each CFIN project, scientists and engineers drawn from various R&D groups work alongside BT Global Services consultants and external partners to drive multidisciplinary co-innovation with the client under a shared risk/reward model. 4. Invest In Web 2.0, SaaS, And SOA Technologies To Net-Enable CFIN Collaboration Prot-hungry IT providers can drive down the cost of operating CFINs by aggressively embracing emerging technologies like:

SaaS and Web 2.0. In a level-one CFIN scenario, enterprise software vendors like Oracle can

use real-time usage data collected from their SaaS-enabled applications to determine clients least favorite features; they can then establish a priority list of features that need innovation to retain and boost customer loyalty. Similarly, Web 2.0 technologies like collaborative ideation tools (known as jamming software) could make it cost-eective for consulting rms to co-create groundbreaking solutions with their level-three CFIN clients on the Net instead of engaging clients in time- and resource-consuming face-to-face workshops.

SOA. In order to rapidly plug creative new global partners into the CFIN collaboration mix to

meet shifting clients innovation requirements, tech vendors must ask their own CIOs to build into their IT systems well-dened and reusable business and technical interfaces based on SOA.

Case in point: Capgeminis online jamming sessions. Under the leadership of its CTO Andy Mulholland, Capgemini is aggressively investing internally in Social Computing tools to drive uid and dynamic online interactions with its clients and ecosystem partners. For instance, Capgemini

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The Tech CEOs Guide To Implementing Customer-Focused Innovation Networks

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used to host face-to-face innovation workshops with its level-three CFIN clients in brick-andmortar facilities. But nowadays, Capgeminis consultants conduct Web 2.0-enabled online jamming sessions with tech-savvy client execs to co-innovate transformational business solutions in real time. 5. Localize CFINs And Cross-Pollinate CFIN Best Practices Across Regions The West wont remain the epicenter of global Innovation Networks for long. Billions of BRIC consumers are already fueling global demand for innovative products and services. And BRIC suppliers are setting the global standards for innovation across many industries as evidenced by the $2,500 car that Indias Tata Motors launched and the alternative energy solutions that Brazilian biofuel producers are developing.11 To boost the market relevance of their CFIN initiatives and crosspollinate technical and market insights across all regional markets, multinational tech vendors must:

Localize their CFIN programs by building regional ecosystems. With enterprise IT spending
growing fast in emerging markets like China and India, tech vendors must learn to adapt their CFIN approaches to best serve corporate clients in these red-hot markets. For instance, if SAP wants to co-innovate with banking clients in India, it must extend its Industry Value Network for Banks a level-two CFIN initiative involving C-level banking clients to also include Indian community leaders and non-government organizations (NGOs). Why? The buying habits of Indias vast rural consumer market, which Indian and foreign banks are eager to penetrate, are heavily inuenced by local community leaders and NGOs whom the rural population trusts.

Deploy global knowledge brokering processes and systems. Global leaders like Best Buy

and Whirlpool have learned to share innovative best practices across their regional units.12 Taking a cue from these pioneers, IT vendors must build a centralized database that is constantly fed with codied knowledge on best practices, lessons learned, as well as customer and partner contacts associated with individual CFIN projects successfully completed across multiple regions. That way, a rural mobile banking solution that Microsoft co-invented with Indias Punjab National Bank and local tech partners can rapidly be transformed by a Microsoft banking client in Johannesburg to serve South African villages.

Case in point: Best Buy. The $40 billion electronics retailer giant has empowered its 140,000 employees scattered across the US, Canada, and China to leverage the insights gathered in their daily customer interactions to co-create innovative user experiences with end consumers.13 The best co-created inventions may eventually scale across multiple or all Best Buy stores worldwide or may simply make the originating store more responsive to its local customer base. This bottom-up, localized CFIN approach is the cornerstone of Best Buys ongoing transformation to Customer-Centricity, a customer- and employee-focused philosophy it introduced in 2003.14 As Best Buy globalizes it has big plans for emerging markets like Mexico and India it is deploying knowledge-brokering processes to accelerate the transfer of innovation insights and partnerships across regional stores and business units.

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The Tech CEOs Guide To Implementing Customer-Focused Innovation Networks

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TECH CEOS SHOULD ENGAGE EMPLOYEES AS CFIN TRANSFORMATION PARTNERS The days of the command-and-control management style are numbered. Assertive Gen X workers and collaboration-minded Gen Y employees wont join or stay too long in rms locked in rigid, hierarchical organizational structures. They would rather work in a collaborative environment that promotes bottom-up decision-making. You could call it Corporate Culture 2.0. In this new uid and dynamic organizational context, the CEOs job is no longer to command his or her troops (i.e., explain the how of a strategy) but rather to communicate the commanders intent (i.e., the why of a strategy). They should then allow the troops to plan out and execute the appropriate strategy against that intent. Empathetic CEOs should exploit this looming shift in tech rms organizational dynamics and engage their employees as trusted partners in the execution of their CFIN strategy. How? By:

Candidly explaining to employees why CFINs are key for long-term success. Rather than

hiding behind spreadsheets with indecipherable cost-benet analysis data, CEOs should host town hall meetings or use their internal blog to articulate in plain English why a CFIN strategy is essential for the rms sustainable growth. For instance, CEOs of tech vendors with a large R&D group eager to deploy an Innovation Network could emulate A. G. Laey, CEO of Procter & Gamble. This is how the head of P&G explained to his R&D sta the business rationale for launching its Innovation Network: Finicky customer demand and brutal competition require us to constantly innovate. We need to build an Innovation Network so we can harness all the help we can get, internally and externally, to innovate faster, better, and cheaper. We have no choice.

Leading by example and putting their money where their CFIN mouth is. Tech CEOs must

overcome employee skepticism and cynicism about their CFIN strategy by backing it with strong organizational resource commitments. Take the globalization aspect of CFINs: Tech CEOs who really want to localize their CFINs for emerging markets must send their most promising execs to cultivate client intimacy and nurture regional ecosystems in BRIC markets. Thats exactly what the CEOs of Best Buy and Cisco did; they got their vice chairman and chief globalization ocer, respectively, to spend a few years in China and India, countries both vendors believe are vast sources of, as well as huge markets for, technology innovation.

W H AT I T M E A N S

TECH VENDORS WILL HAVE TO ADOPT CFINS OR RISK GOING BUST

Some tech CEOs might be put o by the laundry list of transformational initiatives prescribed in this report. After doing a back-of-the-envelope cost-benet analysis for these initiatives, they might decide the investments are not worthwhile and will continue to run their business as usual by maintaining their vertically integrated, customer-blind innovation model. But skeptical CEOs who opt for inaction over CFIN adoption will incur a huge opportunity cost for their rm. Their tech companies will suer steep shareholder-value destruction, as their lack of CFIN preparedness will soon expose their fragile organizations to two disruptive, global, major market forces:

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1. The blurring of software and services that turns existing partners into new competitors. Systems integrators, especially Indian oshore IT service providers like Infosys and Wipro, are rolling out their own solution accelerators prepackaged and congurable business apps for specic verticals; these are starting to encroach on the home turf of their erstwhile partners, the packaged app vendors.15 The result? Enterprise software purveyors like Oracle and SAP will have no choice but to keep expanding their innovation ecosystems and get ever more intimate with their clients in order to deliver highly personalized business innovation to their clients. Forrester expects software vendors to outsmart service providers by more aggressively adopting CFINs especially in emerging markets, where the division between software and services isnt yet as clearly drawn as it is in mature markets like the US and Western Europe. 2. The rise of Chindian enterprise IT clients that spurn vendors inept at client intimacy. Tech vendors increasingly rely on business from China and India or Chindia to meet their growth targets.16 Many of these Chindian deals are CFIN projects in which ambitious clients co-innovate transformational business solutions with their tech providers such as IBMs initiative with Chinese retailer Yansha or SAPs deal with Tata Motors. Not surprisingly, multinationals like Capgemini, Cisco, IBM, Microsoft, and SAP are using Chindia as their laboratory to experiment with new customer engagement models and ecosystem development approaches that enable seamless co-innovation with local clients. For instance, through its multiple IT initiatives across rural India, IBM is learning how to engage local community leaders and NGOs in developing nations in win-win co-innovation partnerships.17
These business model experiments in India and China will, if successful, incent tech vendors to scale them up and institute them as world-class standards for the rest of their global organizations. In 2030, business schools will be publishing case studies on how China and India provided the organizational blueprint for the evolution of tech providers into globally adaptive organizations in the 21st century.

ENDNOTES
1

Customer-focused Innovation Networks (CFINs) represent a new client-centric business model that lets corporate clients input and active participation shape and optimize the collaborative innovation activities that take place within global IT ecosystems. See the April 22, 2008, Customer-Focused Innovation Networks Emerge report. In 2004, Forrester predicted that vertically integrated invention-to-innovation cycles across industries including in the global IT services sector would be deconstructed into a far more productive ecosystem of roles for rms, including the roles of Inventor, Transformer, Broker, and Financier. See the June 17, 2004, Innovation Networks report.

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Forrester proposes three categories of CFIN, dierentiated by the degree and impact of client participation as well as the client value associated with the innovation that the CFIN generates. Level-one CFINs yield cross-industry, repeatable solutions. Level-two CFINs produce industry-specic, congurable solutions. And level-three CFINs produce client-specic, breakthrough solutions. For instance, the CFIN Governance Committee in a product-centric hardware vendor will ensure that the rm isnt over-investing in highly personalized level-three CFIN initiatives that dont yield economies of scale and volume. Each project is presented to the FOAK governance board with a list of potential clients and possible ecosystem partners that are interested in collaborating with IBM on it. This ensures that the proposed FOAK project isnt just an internal pet project but a market-driven initiative. Within three months of the approval, an individual FOAK project team is expected to engage a specic client and start working with them. Internet technologies and Social Computing are changing the ways in which companies involve consumers in the creation of new products, services, and experiences. Forrester calls this shift consumer-driven innovation. See the May 26, 2006, The Essentials Of Consumer-Driven Innovation report. Goldman Sachs projects that as their economies swell, the BRIC countries consumer spending power will increase much faster than that of their peers in developed nations. Source: Goldman Sachs, How solid are the BRICs? Global Economics Paper No. 134, December 2005 (http://www2.goldmansachs.com/hkchina/ insight/research/pdf/BRICs_3_12-1-05.pdf). Growth-seeking tech CEOs can learn from pioneers like BT, Eli Lilly, Intel, and Whirlpool which governance structures, processes, skills, and tools that they must invest in to seed R&D culture. See the March 20, 2006, Transforming R&D Culture report. IBMs On Demand Innovation Services (ODIS) is a CFIN program that draws resources from a team of up to 3,000 experts within IBM Research who work closely with clients to devise tailored solutions that address clients complex business problems. See the June 22, 2005, IBM Delivers Innovation On Demand report. Matt Bross positioned innovation brokers in India, China, Japan, UK, and Silicon Valley to source promising new technologies from local universities and startups. Such externally sourced inventions have contributed to 500 million in potential new product and service revenues since 2002. India and China, with their fast-growing markets and rapidly expanding innovation capabilities, are redening the historical US-centric and unipolar world order for the tech industry. See the November 1, 2005, How India, China Redene The Tech World Order report. Whirlpool has already trained more than 15,000 of its more than 80,000 global employees on how to embed innovation into their daily activities. It has also deployed global knowledge brokering processes to cross-pollinate technical and customer insights across all regional markets. See the June 19, 2006, MarketFocused R&D Elevates Whirlpool Business Performance To New Level report.

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Best Buys employees known as the Blue Shirts receive training on the needs, lifestyles, and shopping preferences of Best Buys core customer prototypes (segments), along with nancial acumen to better understand prot levers. Combining this knowledge with their frontline experience, they are invited to experiment with things like merchandise displays, value propositions, or backroom operations and then measure the results to verify their initial customer hunch. Best Buys Customer-Centricity philosophy has led to a new operating model and a new mindset about the role of those employees closest to the customer. IT and product development services providers are developing solution accelerators which Forrester has dened as predeveloped software that technology services rms use to automate a particular business process or aspect of product development where 30% to 70% of the code can be reused across clients. See the October 29, 2007, Solution Accelerators Will Disrupt The IT Services Landscape report. According to the World Bank, even as the world economy slips into a prolonged recession, the economies of China and India are ring on all cylinders, growing in excess of 8%. In 2007 alone, SAP acquired six new customers for each working day, and IBM generated a total of $1 billion in revenues from its India sales. Recognizing that global economic power is shifting from the West to BRIC nations, IBM is using its Indian operations to experiment with a new organizational model, one that transforms IBM from a monolithic Western multinational to what Forrester calls a globally adaptive organization (GAO) a socially responsible learning organization that relies on globally networked assets, talent, knowledge, and partnerships to anticipate as well as respond to geopolitical, sociocultural, and market shifts worldwide in an ecient and exible manner. See the March 5, 2007, India Leads IBMs Global Business Model report and see the December 13, 2006, The Rise Of Globally Adaptive Organizations report.

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