Mindtree bets on crowd-sourcing of business ideas to drive growth

Software exporter Mindtree is betting on internal crowd-sourcing of business ideas as it chases growth and seeks to stay in sync with the evolving technology needs of enterprises.

With the outsourcing industry confronted with rapid technology changes and exacting customers, the $437 million ( 2,750 crore) company has turned to its more than 12,000 employees to come up with innovative solutions. So far, it has commercially launched two service offerings based on ideas proposed by employees.

 Two years ago, when it first started doing it in a formal way, the company generated 120 ideas and shortlisted one, which it then estimated had the potential to generate sales of $ 50 million over five years. This year, it hopes to get some 200 ideas and shortlist 2-3 of them.

"Our customers are not only looking for services, but solutions and proactive value-add from us. We felt Mindtree has reached a certain level of maturity and it is time for us to create a platform to meet such aspirations," said Srinivasan Janakiraman, president and chief technology officer, Mindtree.

The crowd-sourcing initiative came about after the success of an employee's idea that led to a solution centered around a digital video surveillance product to help analyse digital video streams from multiple cameras to search for patterns.

 "There was a shift from analog to digital, and we wanted to ride that change," said Sharmila Saha, technology evangelist at Mindtree and originator of the idea. The success of the digital surveillance product prompted Mindtree to launch a formal process to crowd-source ideas from employees in 2011. It was called the 5/50 programme, referring to the idea's potential to garner $50 million in sales in five years.

"The real test happens when these ideas get rolled out," said Sharad Sharma, software product evangelist, angel investor and a former Yahoo! India R&D chief. Today, the digital surveillance solution has over 15 customers in the domestic and overseas markets. So far, its application has primarily been in security but Mindtree is now looking at extending it to the retail industry where there is a lot of interest in consumer behaviour.

"The employees are not just idea-givers. They should have the potential to translate it to a business," said Janakiraman.

To incentivise employees, Mindtree has instituted a reward mechanism where the employee stands to earn ten to twenty times the variable pay if the idea can be converted to a successful revenue-earning business. The employee formulates a business plan with the help of the chief strategy officer and the team and nurtures it into a business, like any entrepreneur would.

A cloud management and security software VMUnify - the result of an employee's idea from 2011 - won two customers last quarter after its launch six months ago. Mindtree expects both the cloud and the digital surveillance software to break even in the next year.

Industry body Nasscom said that more companies will look internally to generate fresh ideas.

"Clients are asking what more can you deliver and service providers often look within the organisation for new ideas. We hope to see more and more of this," said Nasscom president Som Mittal.