TRIZ in IT Outsourcing
Editor | On 05, Mar 2007
By Ramkumar Subramanian
TRIZ, a Russian acronym for the Theory of Inventive Problem Solving, is a methodology to generate innovative ideas resulting from the investigation of commonalities among patents. Outsourcing, which involves transferring the execution of areas of an industry to a partner to improve time-to-market and reduce cost, has become one of the key growth areas in the world. This paper highlights how various components of the TRIZ methodologies can be applied in software engineering and business models of the information technology outsourcing industry. The aim of this paper is to develop appreciation TRIZ among the readers and enable them to proactively apply it to their day-to-day activities in the outsourcing arena.
TRIZ (pronounced “trees”) was developed by Genrich Altshuller who found that scientific literature lacked a method for inventing new solutions. Altshuller and his colleagues subsequently analyzed thousands of patents to develop TRIZ and its methodological toolbox. One of the basic concepts of TRIZ is that inventive solutions are needed to remove technical contradictions. For example, information system designers encounter contradictions such as improving quality vs. writing new features, improving memory management vs. improving ease of design. Outsourcing companies also know of management contradictions – maintaining rising salary costs when profit margins are dipping or how to do well when your clients are not doing well.
Altshuller also discovered that inventive principles found in one industry can be applied to other industries. Subsequently the use of TRIZ has spread to a wide spectrum of industries. Today TRIZ finds itself being used in a large number of Fortune 500 organizations like P&G and Ford and Global 500 companies like BEA and Samsung. Today, with TRIZ as a mature technology use to solve problems, it makes sense to ask how it can be used in outsourcing.
Outsourcing is a buzzword that denotes a process by which tasks can be executed by an external entity at a lower cost and with a shorter time to market. Essentially, outsourcing evolved due to a technical contradiction in software (i.e., improving profit and quality while lowering labor costs). Outsourcing primarily started in the information technology industry, because of the ease of transporting bits and bytes rather than material goods and is slowly but surely making inroads into other industries.
This paper focuses solely on outsourcing in the information technology industry. The current market reality in the information technology industry is one of low cost of entry, increasing use of standard methodologies to deliver on-time quality and lowering cost advantages due to competitive pressures. With commoditization looming in the future for information technology outsourcing, there is a need to learn from other industries that have passed and survived the same business cycles. The key differentiators of successful outsourcing companies will be those that make a leap to productive partnership and consulting by leveraging their knowledge and positioning themselves as innovative and quality conscious.
One of the key problems for the information technology outsourcing industry – comparatively speaking – is the fundamental complexity of designing, maintaining and building software. TRIZ can serve the dual role of analyzing the big picture and the details to sift out software engineering innovations and innovative business models.
40 Inventive Principles
The 40 Inventive Principles are the most popular beginner TRIZ tool. This matrix lists the principles and provides examples for how they can be used to identify innovations in software engineering and in outsourcing business models. This paper is based on the author’s limited industry understanding; this should be a starting point for more complete analysis by others. It also should be noted that since TRIZ evolved from manufacturing and engineering industries, creative license is required to apply them to problem areas in information technology outsourcing.
40 Inventive Principles for Outsourcing and Software
Application to Outsourcing
Application to Software
(2) Taking out
(3) Local quality
(7) “Nested doll”
(9) Prelimary anti-action
(10) Preliminary action
(11) Beforehand cushioning
(13) “The other way round”
(14) Spheroidality – curvature
(16) Partial or excessive actions
(17) Another dimension
(18) Mechanical vibration
(19) Periodic action
(20) Continuity of useful action
(22) “Blessing in disguise” or “Turn lemons into lemonade”
(27) Cheap short-living objects
(28) Mechanics substitution
(29) Pneumatics and hydraulics
(30) Flexible shells and thin films
(31) Porous materials
(32) Color changes
(34) Discarding and recovering
(35) Parameter changes
(36) Phase transitions
(37) Thermal expansion
(38) Strong oxidants
(39) Inert atmosphere
(40) Composite materials
Laws of Ideal System Evolution
What is an “Ideal System”? An ideal system is defined as the best possible solution to a given contradiction when there are no constraints on resources. The idea behind discussing an ideal final system is to free the mind of the participant or designer and focus solely on the solutions rather than the intervening problems or contradictions.
Ideality can be defined asIdeality = SBenefits / S Costs + S Harm)
When the costs and harm are zero then the system is ideal or the ideal final result has been reached. The ideal final result has three major characteristics:
- Eliminates shortcomings of original system
- Preserves or builds upon advantages of the original system
- Does not make the system more complex or introduce more disadvantages
An ideal outsourcing operation should:
- Have zero total cost or negative total cost to what the company can do for itself.
- Enhance the outsourcer by providing it with more competitive and strategic advantage.
- Simplify the affairs of the outsourcing company and not add overhead like monitoring staffing, quality or IP.
A perfectly ideal outsourcing industry is one that gets the work done without even existing. The leading law of TRIZ is all systems will evolve toward the ideal final result. Some basic rules that help to achieve the ideal final result are:
- Reduction of parts
- Increase in functions
- Increase in parameters
- Advanced equipment or processes
- Elimination of side effects
- Use of disposable objects
- Effective usage of resources
Now, we can look at the laws of ideal system evolution and look at the future of the outsourcing industry.
Law of Unity or Interpenetration of Opposites
Technical growth happens when opposites interact. Philosophically, the Yin and Yang must interact and overcome each other for growth to happen.
In outsourcing there is widespread angst against transferring labor from one country to another. Cost is a major driving factor with quality and time serving to buttress this obvious advantage. Cost contradiction is a fundamental rationale for the outsourcing industry.
However, this contradiction may not exist for long so the industry must learn to address newer contradictions, including quality, the widespread knowledge base created by working with multiple external partners and the intellectual property transfer between the client and outsourcing organization. These situations illustrate how the law can be used to predict and ameliorate contradictions evolving in the industry.
Law of Negation of the Negation
Evolution consists of repeating the same steps again and again, but each phase of the repetition occurs at a higher level of evolution using newer technologies, skill sets and elements.
Companies have information technology outsourcing down to an exact science by their process orientation and quality consciousness. However, the next leap forward will happen in areas like nanotechnology, robotics and genetics and also more advanced software and powerful hardware. Current business models can be said to have an asymmetric power structure between the outsourcer and outsourcing company that will become more symmetric and result in value-based partnerships in the consulting space.
Law of Transformation of Quantity to Quality
Quantitative changes take place on an S-curve and certain qualitative changes take place after a period of time.
This raises the question as to how long outsourcing companies can maintain their double digit growth margins with increasing bottom lines running into billions of dollars. Although the outsourcing industry is on the accelerating portion of the S-curve, it must be able to face the challenges of maturity – quality rather than cost being a significant differentiator of the industry.
Law of Non-Uniform Evolution of Sub-Systems
Various parts of a system evolve at non-uniform rates. As a result, system conflicts arise because of non-uniform evolution.
In information technology, the growth of hardware has far outpaced the growth of software. While processor power has doubled, memory prices have fallen and multi-core processing has become common, software and operating systems have a slower evolution curve. The mainstays of operating systems, namely Windows and UNIX, have been prevalent for decades. Even though there has been substantial improvement in programming languages release cycles have yet to take less than a year and languages like COBOL and C refuse to die out. The opportunity in this system conflict has been exploited by the likes of Java, which provides simplified automatic memory management and virtual operating systems make the program less efficient in terms of memory and speed, but have the bonus of ease of rapid application development.
In outsourcing, while the quality and quantity of work seems to be rising, there remain significant shortages in terms of adequate labor. This system conflict can be removed by closely collaborating with educational and vocational institutions to ensure adequate qualified labor to meet the requirements.
Law of Transition to Higher Level Systems
Systems evolve from mono- or single-function systems to bi- or poly-functional systems.
This law is the easiest to observe in everyday life – with a cell phone, a pure voice device evolving to become a music player, camera and personal information system. In information technology, dominant players like Microsoft constantly update components of OS to serve newer functionality like introducing a free browser, a free media player and a free security suite.
The rationale for outsourcing has been the provision of quality labor at low cost. It is likely that the evolution will happen when outsourcing companies are called upon to do market analysis, product design, original research, end-to-end execution from conception to delivery, and consultancy.
Law of Transmission from Macro- to Micro-level
Technological systems evolve toward an increasing fragmentation of their components.
This law is easy to observe in the service oriented architecture model of information technology in which various fragmented pieces of service logic are stitched together using glues like UDDI, SOAP and web services.
In outsourcing it is evident that various micro-competency centers will evolve, each focusing on a niche market segment with an increasing knowledge base. The outsourcing industry should make use of models that knit together and orchestrate these micro modules – embrace specialization while maintaining a coherent generalist vision to improve its bottom line.
Although it is beyond the scope of this paper to discuss all the laws of technical evolution a few are mentioned as pointers for exploration.
- Law of abundance: 80 percent of the work is done by 20 percent of the elements, functions or links in a system. This is the well-known Pareto efficiency that has served as a yardstick in numerous industries
- Law of harmonization: An effective technological solution requires coordination between the periodicity and resonant frequencies of its components.
- Law of completeness: Any technological system has four components: working means, transmission, control and engine. As evolution happens, these systems are replaced by mechanical or autonomous means as compared to human means.
- Law of shortening of energy flow path: Systems evolve toward shortening the distance among the energy sources and working means. This can also be called the “eliminating the middleman” strategy.
Levels of Solutions or Levels of Inventions
One of the key findings of Altshuller and his colleagues was that there are discrete levels at which innovation happens. The following describes each level and how each is applicable to outsourcing, with a corroborative example in the writing industry.
- Level : Routine design problems solved by methods well-known within the specialty. This would mean leveraging the existing knowledgebase in outsourcing in the form of case studies, developed components and processes to be more effective. Example: using coal to write.
- Level 2: Minor improvements to a system using methods known in the industry. Using technologies like Six Sigma, Lean, Six Thinking Hats and other techniques to do incremental evolution in outsourcing. Example: graphite pencil – coal with a good wrapper.
- Level 3: Fundamental improvement to an existing system using methods known outside the industry. Use technologies borrowed from fields like manufacturing, retail, construction, art and cinema and apply them to outsourcing. The outsourcing industry abounds with paradigms borrowed from the construction and manufacturing industries when we talk about productivity, deliverable, design and architects. An effort must be made in the industry to borrow paradigms from industries that have not yet been explored. Example: the ink pen instead of coal.
- Level 4: A new generation of a system that entails a new principle for performing the system’s primary functions. Outsourcing could explore avenues of artificial intelligence, robotics, nanotechnology, expert systems automatic code generation and other avenues that can improve the pure resource arbitration model of outsourcing. This shift has yet to be made. Example: the printer.
- Level 5: A rare scientific discovery that fundamentally shifts the paradigm of the industry. In outsourcing, an example of this is the use of atomic or quantum computing, neural computing and neural augmentation, lightning fast data transfer for everybody and teleportation that are currently science fiction but may be reality in the future. Example: digital pen and paper (like Microsoft Word).
TRIZ contains scientific methodologies for invention and innovation, including the tools explored in this paper: the 40 Inventive Principles, Laws of System Evolution and Levels of Evolution.
Such TRIZ techniques can be applied in the information technology outsourcing industry for both software engineering and invention of new business models. The TRIZ laws of technical system evolution can be used to predict market trends and be prepared to latch onto newer opportunities.
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