Source: Deloitte.com – Traditionally, R&D drives companies’ product innovation and technological advancements. But changing customer expectations and the ubiquity of startup funding, culture, and processes—promoting rapid, agile, and use case–focused innovation—are pressuring leaders to shift their approach to the development of new offerings. This is now truer for B2B companies than ever before, as offering simplicity and strong customer experiences in consumer products have permeated B2B buying processes, customer support, and product updates.
The impact has begun to reverberate not only across the technology and industrial sectors but across the economy, broadly. For example, a major European bank, known for its hierarchical and policy-driven offer development, restructured its product innovation-related functions (including IT development, product management, and marketing) into small agile “squads,” resulting in faster time to market, greater customer satisfaction, and higher employee engagement.1
Many technology buyers are increasingly expecting quicker and easier integration of new products or solutions with their enterprise systems and applications in order to realize a faster return on their investments. This is especially important as technology budgets often extend outside IT managers to line managers, including operational technology groups. More and more, these buyers expect value through integrated solutions.
But developing and delivering these integrated solutions is often challenging for a single company to address independently, cost-efficiently, and effectively. (See figure 1 for examples of challenges organizations typically face when trying to innovate.) While organizations should continue to invest in robust internal R&D capabilities, today’s changing business environment indicates that companies expand their sources of innovation.
As such, companies have begun to look beyond their four walls to break free of organizational constraints and stay ahead of the curve. In this article, we discuss how collaborative innovation compares to other product development and innovation approaches, the types of innovation partners that might be involved, leading practices, and some success stories from across the marketplace.