Innovation as a Service: The Future of Driving Business Growth
Businesses across all industries are looking for new ways to stay competitive in today’s fast-paced market. One approach that is gaining popularity is adopting an Innovation as a Service model. This new business model sees companies leveraging external partners and service providers to help generate innovative ideas and solutions instead of relying solely on internal R&D efforts.
What is Innovation as a Service?
Innovation as a Service refers to procuring innovation through an external partnership rather than developing capabilities internally. Under this model, companies outsource their innovation needs to specialized service providers that have expertise in areas like design thinking, product development, digital transformation, and more. These service providers help businesses drive innovation through consultancy services, hackathons, accelerators, startup partnerships, and other collaborative approaches.
Some key benefits of the Innovation as a Service model include:
Access to Specialized Expertise
– Partnering with external service providers gives companies access to deep technical expertise across various disciplines like AI, IoT, blockchain etc. that may not be present internally. This helps accelerate innovation.
Focus on Core Business
– Outsourcing innovation allows companies to focus their internal resources on core competencies and business operations while leveraging partners for innovation needs. This improves efficiency.
Reduced Costs and Risks
– Innovation as a service is typically offered through outcome-based, pay-for-performance models which reduce upfront costs and risks compared to setting up large internal R&D units.
Faster Time-to-Market
– External partners are more nimble and better equipped to quickly generate, test and implement innovative solutions through their dedicated innovation centers and processes.
Keeping Pace with Disruption
– The model helps companies stay abreast of emerging technologies and changing market needs by continuously sourcing innovations from partners attuned to latest trends.
Realizing the Innovation as a Service Vision
There are multiple ways the Innovation as a Service model is being realized in practice:
Crowdsourcing Innovation
Large corporations like Unilever, GE and P&G utilize global innovation crowdsourcing platforms to source solutions from a broad pool of experts. Platforms like GE’s Imaginatrix allow any innovator to propose and develop ideas.
Startup Accelerators and Incubators
Many companies partner with accelerators and startup incubators that provide funding, mentorship and pilot projects to help scale promising startups. This generates new innovations and partnerships.
Corporate Innovation Labs
Established by companies like Google, Microsoft and Intel, these labs tap into internal and external expert networks to explore emerging technologies with both business and social impact.
Hackathons and Challenges
Organized regularly, these events bring together developers, designers and domain experts to collaboratively solve business problems over weekends or in a few days. wins receive pilot project funding.
Digital Transformation Partners
As businesses make the digital shift, IT service providers like AWS, Salesforce and Adobe are leveraging their digital platforms and consulting expertise to drive innovation for clients.
Challenges in Adopting the Innovation as Service Model
While the potential of Innovation as a Service is immense, there are also challenges companies need to address:
Cultural Shift
Many companies have deeply entrenched internal R&D cultures and it requires effort to embrace open innovation models involving external partners.
Security and IP Concerns
Companies must put strong contractual agreements and review processes in place to ensure partner engagements don’t compromise sensitive data or intellectual property.
Managing External Relationships
Proper governance framework is needed to effectively coordinate, monitor progress and extract value from multiple innovation partnerships.
Transition to Commercialization
Not all innovations sourced through open models get successfully commercialized. Partnerships require focus on piloting solutions and seamless transition to business operations.
Measuring Impact
It can be difficult to directly correlate innovation initiatives with business metrics like revenue and growth. Robust evaluation frameworks are important to gauge ROI.
The Future is Open
As the pace of industry disruption accelerates, more companies are recognizing Innovation as a Service is key to staying ahead of the curve. While initial adoption may not be straightforward, organizational preparedness to embrace open innovation models will determine success in turbulent times ahead. Multichannel partnerships that strengthen core operations while scouting new opportunities present the clearest path to competitive advantage through continuous technology-fueled innovation.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
