CRM News: Business: Reinventing Innovation: The Next Level of Outsourcing

Manage and Measure the Innovation Process While not all innovation comes from R&D and product-related functions, it is an important strategic outcome for R&D organizations along with other performance targets. If your mission is to identify and execute new products and services that materially contribute to revenue, margin, and market share, then you are living the "innovation imperative." R&D outcomes, not the amount an organization spends on R&D, are the true measure of the value of innovation. An important shift needs to be made from concentrating effort on sustaining innovations, which only add incremental value, to ensuring a better balance to also achieve a steady stream of breakthrough innovations. A strong and steady stream of invention generation -- and tight execution processes to transform them to innovations -- is the key. Because of its subjective nature, innovation is often thought of as something that can't be measured. On the contrary, innovation must be treated as a business process managed across culture, process and technologies -- with a focus on metrics that track outcomes. However, the ultimate measure is an external measure called the Vitality Index (VI), which looks at the ratio of product revenue generated out of sustaining and breakthrough innovations compared with all other existing revenue. A quantifiable measure that shows the impact of innovation helps companies understand the health of their innovation capabilities and indicates changes development teams may need in order to meet expectations. As the increasingly global workforce and improved innovation techniques add value to product engineering, forward-looking software companies will be able to leapfrog their competitors. Enterprises that embrace R&D globalization and forge strong partnerships throughout their ecosystem will bring cutting edge innovations to market faster. Meanwhile, less globally-minded competitors will lose market share. A highly collaborative relationship with the right outsourcing partner can help you stay at the forefront of your industry.