Product Innovation is the future of IT?

Leapset urged Sri Lankan IT professionals to start focusing on ‘Product Innovation’, at a thought leadership session held recently. The Silicon Valley developer of an end-to-end digital platform for the restaurant industry bases its entire engineering muscle in Colombo, and suggested that focusing on new product development is the future of IT. This call to action challenges the local ICT sector, which has been primarily driven by a consulting centric business models for years.

Leapset’s CEO, Mani Kulasooriya, and MD for Sri Lanka, Shanil Fernando, were the key speakers at the session. They described ‘Creative Technology’ as developing products and solutions that solve business and real life problems, in better and more innovative ways. A lot of these solutions and products are disruptive; they often displace and replace the multiple practices and industries that were built around them. For example, ‘Netflix’, the on-demand internet provider of movies and other video content completely replaced the in-store movie rental business, and companies such as ‘Blockbuster’ who were leading that industry.

‘Being a creative product company has its difficulties,” said Shanil. “You need significant capital investment at the start and there is a greater risk involved, not to mention the fact that you also need a great idea. However, the rewards are worth it; you get to create technology that solves problems and changes the way we do things, you get to be your own boss, and companies built around disruptive products create enormous value in short periods of time.”

Shanil also contrasted Sri Lanka with India saying that the labour arbitrage model that India uses works for them since they have an enormous population willing to work at a relatively low cost. In this model your export earnings are directly proportionate to the amount of IT employees in your economy. “A large percentage of Sri Lankan IT companies are working on the labour arbitrage model, that’s why we have only seen incremental growth in our IT exports over the years, which is currently valued at approximately US$ 600 Million. Sri Lanka needs to consider a different working model and look to countries like Israel as their benchmark,” Shanil explained. “Israel only has a population of 7 million, with around 200,000 in the IT industry, but they have 63 companies listed in the NASDAQ and earn just under 4 billion (USD) in exports. They couldn’t have achieved this using labour arbitrage; they did it by building great products. Sri Lanka has a great foundation; our engineers are capable of building great global products right from within Sri Lanka, but if we are going to create exponential value the shift needs to happen now.”

Mani spoke on his experience being at the helm of a disruptive company like Leapset, and what it takes to be a disruptive company. In addition to emphasizing that being a product company was vital, he said, “You need to create a culture of risk taking, people need to feel free to embrace ground breaking ideas and learn from their mistakes. You also need to foster business acumen within your engineering staff, if they can’t understand the final user’s perspective and the business problem you are trying to solve, they will never be able to create best solutions possible.”

Mani went on to say, “You also need to foster a culture of open communication, your engineering team needs to gel perfectly with your product team, and they both need to provide creative solutions on how to develop the product.”

Leapset is strategically aligned with Sysco, the world’s largest food supplier, whose 9,000 strong sales team is marketing the Leapset platform to restaurants all over the USA. Leapset intends for its platform to be the default Operating System used by all restaurants in the future, and to be listed on the NASDAQ in 4 years.