Technology is changing all business in a drastic way. This can be an opportunity for those that innovate faster than others, and by the same token, the kiss of death for companies that stick to their older business models and technology solutions.
In that rapidly changing environment, many companies will find that the pace of innovation in their sector is too fast and too unpredictable to rely only on its own resources and genuinely flourish. In that regard, there are many examples of how companies succeed by leveraging the innovation of others.
For example, the openness of Apple Store and Android Store made these two ecosystems win the battle in a very short time against other closed systems. The power of innovation that came from thousands of successful app development companies boosted the value for end users.
The big question is can other companies also benefit from open innovation or is this limited to Apple and a select band of major business names? The majority of bigger businesses today already rely significantly on external companies. A lot of technology development is done through outsourcing.
However, outsourcing was not designed for rapid innovation in a very unpredictable environment and in fact, many times it has severely hindered the creative process. The common assumption behind outsourcing is that projects are fairly static and can be defined to a large extent and with that, implementation can then be nicely controlled.
However, the reality is many times completely different. Projects are dynamic and scope is changing constantly, creating a situation where innovation and creative thinking is required at every level. This means that one needs to move away from the hierarchical ‘supplier’ model into a model where a partner company is openly invited to participate in the innovation process.
In most companies this transition fails because of lack of trust, communication issues, culture issues, and similar problems. Companies therefore get stuck in a low value approach where both parts are not satisfied with the cooperation.
“Outsourcing was not designed for rapid innovation in a very unpredictable environment and in fact, many times it has severely hindered the creative process”
Setting up a collaborative environment between companies in which joint work creates significant innovation is not trivial. It requires deep understanding of the technology but also processes, social aspects, business environment and other factors. It takes time to develop such a relationship and it can go sour if approached in the wrong manner.
Comtrade, with a 25-year history and excellent track record, has a profound understanding of all these aspects. Over that time, we have built the methodology that guides the partnerships step-by-step. From initial work to the point where we have set-up a structure in which our partners can fully rely on Comtrade to participate in the innovation process and where we jointly create market value to the benefit of all involved partners.
We have developed new business models that guide such relationships toward common success and reduce risks for both sides. A typical partnership is such that a product and service company in a particular industry leverages Comtrade’s deep technology expertise and innovation capabilities to faster develop new solutions for the market.
If done strategically, this can really boost innovation process and open the environment, not just for Comtrade, but also for other potential technology vendors. As a result, end users significantly benefit – indeed so do all involved parties.
Marko Javornik is director for international services with Comtrade.
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