Reading a cover article about ICICI Bank, in the June issue of Outlook Business, revealed an interesting strategy. Instead of merely treating the IT department as an internal cost center, the largest bank in India considers IT an enabler for new business opportunities. This approach uses the technology department as a springboard to launch new products and services. Once considered to be a department easily outsourced, IT is now closely aligned to the core business strategy with a mission of innovating premium, profit generating programs.

By placing the technology team at the center of the strategy, ICICI Bank expects to generate solutions before consumers and retail businesses realize the need. Although creating the world class infrastructure, necessary to fuel such a business, is expensive, once it’s complete, rapid growth happens with incremental costs. Contributing to the cost reduction strategy, the choice to use open-systems architecture is lowering the overall cost of ownership. The end result is the ability to rapidly innovate and release groundbreaking products and services.

While businesses today are searching for ways to cut costs and relieve themselves of employee overhead, ICICI bank has found a formula that capitalizes on the individual’s corporate knowledge to turn a cost center into a profit center. This is a radical organizational innovation.