Blue Ocean Strategy for Small-cap IT and ITeS

for
Small-cap IT
and ITeS
in.linkedin.com/in/vinodbasi
Blue Ocean
Strategy
Creating uncontested
market space

Acknowledgements
W.Chan Kim&ReneeMauborgne
Respect…
And
Allthosewhoshared BOS summaryon slideshare.net
Thoroughly Appreciate…
Thank you
in.linkedin.com/in/vinodbasi 2

Why ?
 This isa naïve attempttocreateBOSforsmall-cap ITand ITeSfirms.
 The rationale behind making this presentation is that, a lot of BOS presentation
isbased on theexamples set/giveninthebook.
 Here, an effort to realize what small-cap IT and ITeS firms can do to create markets of
their own is made.
 No peer-peer comparison of small cap IT firms is made.

Six Basics of BOS
Formulation Principle
Re-constructmarket
boundaries
Venturebeyond existing
market
Lookat thebigpicture, not
numbers
Get the strategicsequence
right.
Evaluation Principle
Overcome key
organizationalhurdles
Createstrategy toexecution

Formulation Principle

Formulation
Principle
Create New
Markets
Identify partners who
can work from
different markets
(unexplored markets)
Reduce the cost factor
in projects andinvest
in quality
delivery/service/suppo
rt
Reduce
attrition
Retaininginternal
customersisas
importantas clients
Build a
product
Mustmeet
international
standards
Concentrate on
cloud/mobility/secur
ity/IoT/
LoT

Cluster Breakdown
 Buildinganewproduct(notnecessarily, outofbox),but
something which scales uptointernational standardsislooking
atbigpicture,thenumberswillfollow.
o Cloud,Mobility,IoT,LoTetc.,fallsunderthiscategory.
o Tofocus onthebigpicture,thestrategy canvasinthis
presentation isbasedonanabridgedformofvisualizing
strategy.
 Strategicsequence isaligningallyourresources’ energy towardsorganization’sgoals,objectives etc.,
o Here reducing attritiontakes apivotalrole.
o Reduce thecost factorinvolvedinprojects; investinqualityservice, supportandresources.
o Ifyou’rethinkingofcost overhead,lookatbiggerpicture.
 Reconstructing market
boundariesandventuring
beyondexisting marketis
inter-dependent.
o Creatingnew markets
willresultinboth.
7

Evaluation Principle

Evaluation
Principle
Certifications
ISO/CMMI/PC
MM
Encourage resources to
pursue specialization
certifications
Streamline
Processes
Create Business
ContinuityPlan (BCP)
Chaos in the internal
processes are
showstoppers
Faster Decision
Making (DM)
Eliminate
dichotomy
Action points must be
monitored
throughout execution
9

Cluster Breakdown
 Buildingexecution tostrategyinplainwordsis
setting yourprocesses right.
 QMSandISMSwillcertainly helptoa
greatextent andthen moveto
CMMI/PCMM.
 Business ContinuityPlan(BCP)hastobe
putinplace, remember people come and
gobuttheshowhastogoon.
 Oneofthekey organizationalhurdlesinsmall
capITandITeSfirmsisdelayindecision
making.
 Inmostcases, decisions madeare
dichotomous, which shouldn’t beso.
Because alotofinterlinking processes
oractivities areaffected.
 Encouragingyourresources topursuespecialization certification isabrowniepoint.

Value differentiation using
ERRC framework

New value
curve
Eliminate
Reduce
Create
Raise
Cost
Value
Value
Innovation

Cost & Eliminate-Reduce
Eliminate
• Lacklustercostandprojecttimelineestimation.
• Costoverrunsinprojects
• Usingresourcesinefficiently-e.g.jugglingthembetweenprojectsbefore
completion,resultsindelayordisruptioninprojectcontinuity.
Reduce
• Facilitywastage,encourageresourcestoleaveforthedayaftertheirworkis
done(rigid40hrs/wkwillresultinloafing)
• Reducehardcopies.
Cost

Value & Raise-Create
Value
• The quality of service delivery and support
• Client engagement
• Cost advantage
• Employee Engagement
• Cost competitve advantage
• Sense of ownership
Raise
Create

Strategy Canvas

Thefactors influencingstrategy inLarge Cap firms arejotted.
Competitive Advantage ->
LargeCapfirmsinvestin creatingdifferentiation
strategyandbringingaboutoperational
effectiveness.
 CTS,TCSetc.,
Client Retention ->
LargeCapfirmsengagetheirclients’needsin
deliveryandemphasisisputon retainingexisting
ones thancreatingnew.
 MostLargeCapITfirms
ChannelPartners ->
LargeCapfirmseitherdonotneedachannel
partnerortherearepartnerswhoareeagerto
workwiththem,forSmallCapfirmspartnersare
important.Findingone, whocan workfrom
unexploredmarketsisa hugeplus.
 Unidesk(partneredwithDELL)
Service and Support ->
LargeCapfirmsdoubleuptheirrevenuewith
serviceandsupport.Thisisone ofthoseareas
whereperpetualrevenuecanbe created.
 MostLargeCapITfirms
Acquisition ->
LargeCapfirmshavethe moolahtoacquire
potentialcompetitorsorunexploredmarket
players.SmallCapfirmsshouldconcentrateon
anunifiedapproachratherthanacquisition.
 Facebook,Google,Infosysetc.,

Types of non-customers
Unexplorednon-customers
areorganizations whose domain of working
does not feature in your vertical orvice-versa.
Refusing non-customers
arebig fishes, whodoubt yourcapability to
deliver (remember, the certifications) or
sustain the business.
Soontobenon-customers
areyourirateclients, who have decided to
move out, due toincompetent resources or
poor/mediocre delivery or service orsupport
orhigh cost orany other reason they see fit.
17

Pioneer-Migrator-Settler Map

Buyer Experience Cycle

Price Corridor of the Mass
 IT services unlike the products donot have mass buyers.
 Mostof the buyers belong to either lower level pricing orupper level
pricing category.
 However, the mid-level groupcomes intopicture when channel partners
areinvolved in providing alternate services which areimperative to
enterprise operations.
21

Four Hurdles to Execution
Cognitive–
Change the status quo,
look for projectsbeyond
comfort zone.Do the
ground work.
Political–
Don’t let corporatered
tapes seepthrough, allow
greatertransparencyin
functioning.
Resource –
Stock enoughHorsesfor
Courses
Motivational–
Keepyourresources
aligned with yourgoals
and objectives.
ALWAYS

Now…,
Get Started
in.linkedin.com/in/vinodbasi Vinod Govindan

Blue Ocean Strategy for Small-cap IT and ITeS

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