Business line Firms Events (code names)
Custom application Infosys CIMBA
development (8) Influx
Tools Group MindTree Sales Tool System
TechWorks
M-Tec B/OSS
COMPASS
Wipro Lean Software Factory Independent testing Aztecsoft I-Test
services (4)
RelQ AsessQ
RelQ Online Verticalisation
Infrastructure management Microland CIO Dashboard Solution services (4) IT Security Consulting
Network Management System Wipro Global Command Centre Engineering services Encore VoIP solution
outsourcing (8) Wimax solution
MindTree 3.3.4 Bluetooth solution M-Tec Build-Operate-Transfer Sasken Botnia Hightech
Multimedia Subsystem Symbian Competence Centre Wipro Ultra Wideband solution Made in India products (7) Cranes Global Marketing Network
NISA SYSTAT Encore Mobilis Liqwid Codesaw gyanX rRapidSuite
Outsourced product Aditi Digital Music Distribution Platform
development (5) Mifos
Product Transformation Services Aztecsoft ETL Tool
31 A paradigmatic case is an ‘exemplar’ or ‘prototype’.
In almost all of the cases this process was structured and straightforward. There seemed to be no difficulty for managers to produce a shortlist. However, in some firms only one or two events stood out to the manager as particularly important. The reason for asking for three events was, nevertheless, to gain some variance in innovation types in the empirical material. In larger firms the problem was of an inverse nature. Here the gatekeeper informants found it difficult to choose three out of the shortlisted events. In large firms such as Infosys and Wipro, many events got onto the shortlist. Thus, a certain element of arbitrary selection was associated with a strong dependence on the gatekeeper’s inputs.
The main investigation period is the five years between 2001 and 2006. The 36 innovation events occurred within this time-frame (although the ‘beginning’ of an innovation event can sometimes be difficult or impossible to establish). However, in examining the trajectories the study uses a longer time perspective. The guiding proposition is that the period under review was an inflection point in the process of capability building, with an increasing shift from production to innovation capability. The five-year ‘window’ is suitable for two reasons: (1) the reliability of respondent statements is likely to decline if one traces further back than five years; and (2) the literature indicates that innovation in Indian software firms was limited before this period. However, adopting this window does not mean that the study ignores developments prior to 2001. Rather, the
reconstruction of innovation events, the related innovation process and the mobilisation of capabilities go back as far as necessary.
The 36 events are shown in Table 3.12. The analysis presented in this study is concerned with both the examination of patterns among events and the deeper examination of particular events. Insights emerged from the examination of the processes, sources and outcomes of each individual event, and from the analysis of events against the contextual backdrop of segment-level trajectories.
Events may reveal why learning took a particular direction at a particular inflection point. Moreover, from a methodological perspective, the advantage of the events- based approach is that the unfolding of these events may disclose wider patterns that appear less articulated elsewhere. In other words they may carry ‘diagnostic qualities’: ‘A diagnostic event is, of course, not generalizable in itself, but it gives hints to certain patterns of processes which could and should be looked for’ (Lund 1994). This rationale led to the choice of sample vanguard supplier firms and activities (not typical supplier firms and activities). The study did not actively seek ‘paradigmatic cases’ (Flyvbjerg 2006),31but the analysis of events enabled the
development of insights and categories describing broader ‘emerging paradigms’ associated with the key segments and business lines examined in this study.
3.3.5 Backtracking: examining event-level sources and linkages
The ‘backtracking’ process was particularly concerned with understanding the role of different internal and external actors in bringing about a particular event (who did what). It involved the retracing of the innovation processes and the sources
32 The (ir)relevance of linkages specifically within Bangalore was also examined but not included in this study because the findings were not affected.
33 Interviews were also conducted with relevant organisations such as the Department of IT in Karnataka State and NASSCOM as well as with other private sector firms with relevant insights. A list of
informants is included in Lema (2009b)
involved. This required a further analysis of the innovation resources flowing through these internal and external links.
Building on the framework described in the previous chapter, the analysis of capability formation therefore concentrated on the combination of resources (ideas, investments and knowledge) and levels (internal, local and global). It is important to note that for the sake of simplicity this study defines local linkages as those occurring between organisations within India (rather than within
Bangalore).32
Respondents were then asked to assess the importance of each level for each type of resource. Each level could either be deemed relevant (of some
importance) or irrelevant (of no importance) with regard to a particular resource. Respondents then ranked the ‘relevant’ levels in order of importance. Viewed in this way, a maximum of nine types of linkages can be ‘relevant’ in the innovation processes.
Focusing on particular events was a way to focus on what the firm ‘did’ rather than what they ‘said’. Open-ended questions about innovation inevitably resulted in a sales pitch. The focus on particular events was therefore useful. It meant that questions were specific; and the interviewing of different people about the same event increased the level of certainty. Overall, more than 100 interviews were conducted in India during the last six months of 2006 and the bulk of these interviews related directly to these events.33
There were few major difficulties in backtracking internal linkages, but tracing external linkages was not as easy as had been envisaged from the outset. Where possible, information on these external linkages, not only from case firm
informants, but also from additional material such as company documents, annual reports and press reports was obtained. However, the most important source was interviews with linkage partners (or other people with specialised insights). Customers were a key category in this regard, and this required research on the demand side, mainly outside India.
3.3.6 Researching the demand side
As mentioned, sample selection at this stage took a ‘bottom-up’ character as the innovation linkages identified in India aided the identification of demand-side actors. This element of backtracking on the demand side was of critical
importance to the research presented in this study. It allowed for the identification of customers and the examination of the role of open business models.
The demand for software is highly heterogeneous. At an abstract level, the demand for corporate software has two sources: business process improvement or product development:
34 BPI and NPD processes are therefore not necessarily software processes as such, but they form the setting for software use.
35 The Indian software producers examined in this study belong to the primary software industry.
z Business process improvements(BPI) typically relate to new ways of organising
in-house processes or to relationships with external partners. Examples include new customer relationship or logistics management, or new ways of organising IT systems as firms shift to service-oriented architectures (SOA). Such changes typically involve new software systems provided by an in-house IT department or external providers of customised software solutions (or both).
z Efforts in new product development(NPD) differ according to the profile of the
buyer firm and sponsor organisation. Two types of product development are important for the analysis of software outsourced to India, both in the field of IT. Primary software industry firms are concerned with developing new software products, whether these are of the old ‘packaged’ type or whether they are ‘software as a service’ (SaaS) products provided online. Electronics and telecom buyers engage in the development of new hardware products, although these are often software-intensive and include so-called embedded software.34
Firms specialised in software development (the primary software industry) are services firms. However, software development also occurs within IT departments of firms operating in other sectors of the economy (the secondary software
sector). Customers in the software-outsourcing industry belong to both the primary and the secondary software industry.35The ‘demand base’ for outsourced software
services is therefore very diverse. The buyers are IT departments, engineering departments, R&D departments, or product development teams (referred to as sponsor organisations) that use software services to build products or provide solutions for in-house or external use. The nature of the demand for outsourced services therefore varies with the types of sponsor organisation and their roles. The first step in constructing the buyer sample was to assemble a base of named customers, divided into the three categories shown in Table 3.13. The actual sample is shown in a later subsection.