Innovation Systems – Making Sense of the Noise

Technology is recognised as an enabler of innovation and growth. Having a software tool, specifically the right software tool, can greatly accelerate your innovation results by creating an easily accessible and self-sustaining platform for ideation and innovation management. Over recent years, however, the innovation technology systems market exploded and an influx of players are contributing to an ever increasing maze of offerings with functionality that features internal and external collaboration capability, enterprise communication tools and in some instances the integration of various ecosystems for co-creation.

The result is an increasingly growing and crowded landscape of innovation management tools that are becoming more and more difficult to navigate – a trend that is expected to continue as new and existing offerings incorporate more radical technologies such as artificial intelligence and crypto currencies.

The current innovation technology market is estimated at over $200 million and boasts up to 250 vendors (and counting), almost doubling its size in the last two and a half years. In a fragmented innovation system market differentiation is not easy to come by. This does not come as good news for increasingly frustrated customers trying to make sense of it all. The very reason the innovation system vendors make a case for their software (to help organisations innovate and differentiate) might become a paradox in itself that begs the same question from them – how are innovation technology vendors creating new value and differentiation in an increasingly dynamic market?

At Innocentrix we understand this problem as we work with both vendors and clients to make innovation intentional, repeatable and supportive of next level growth. One solution will not universally fit all needs. Organisations need to understand the functionality on offer, how it fits the organisation’s own requirements, the financial and business models available as well as how this aligns with current innovation maturity levels and future goals.

Where to start is not always easy to figure out. The aim of this article is to offer a practical point of departure to assist organisations to navigate this landscape better.

But we can Build?

Customers increasingly look for a voice in the development of a solution that best meets their needs and prefers “exceptional service” as opposed to traditionally offered technology services. This might be one of the reasons investigating in-house development is often one of the first activities undertaken by organisations when the need for an innovation management system has been identified. It is possible that certain organisations by the nature of what they do have the ability to develop in-house and it seems like an attractive option when one ponders the crowded innovation technology landscape mentioned above. Add to this foreign currency hurdles if you are considering best of breed international solutions that also naturally comes with geographical and time zone challenges. The other reality is the speed of change, the impact of digital innovation and the requirement to have to run hard just to stand still, for what could be considered to be a non-core activity. Building you own is not impossible but with the rise of mobility and SaaS offerings, it is becoming increasingly challenging to do so well. 

Apart from functionality and development costs, organisations need to consider time available for development as well as servicing the organisation’s future innovation aspirations.

Other considerations should be:

Insight

Does your development team understand the organisation’s technical and innovation-critical requirements to enable it effectively? Can you map the minimal viable product (MVP) and do you have a good understanding of the future roadmap for the product? Moreover, does the development team really understand innovation and innovation software development?

Skill

Does your organisation have the required technical in-house experience to deliver a solution that is reasonably comparable to what is available off the shelf right now? Will you have continued access to these skills in the future and do they have the time available to bring the product to the organisation reasonably quickly?  

Relevance

Innovation software vendors have been in the game for several years, they understand the dynamics of the market and are trusted by some of the world’s largest companies. This is their core competency, the reason they exist. It is in their interest to remain relevant and at the forefront of best practice in innovation management. Consider the internal stakeholder challenge as the organisation has to continually justify the investment and when it becomes a cost/price game the 3^rd party vendor has the scope to offer compellingly lower prices.

Total cost of ownership

It is necessary to consider the complexity of total cost of ownership. The allure of building your own is attractive when one considers the ubiquity of the tools and seemingly low barriers of investment, but what costs are associated with personnel, ongoing maintenance, and continuous development. Opportunity costs if this is not a core competency for the organisation also need to be considered.

Building an in-house solution is possible but it is not straightforward. Initially and at low levels of innovation maturity in-house built systems can serve their purpose, but they soon fall by the wayside as maturity levels and the complexity of needed functionality increases. Another challenge is that in house development can become someone’s pet project. Organisations often fail to maintain their systems due to a change in roles and responsibilities over time, resulting in an eventual waste of not only money but time as well.

So how do you make sense of it all?

It is important to select a fit for purpose tool to fulfil the organisation’s objectives in support of its innovation business case, and to be able to adapt as the organisation matures on its innovation journey, or as needs become more varied.

Answering the question is, in essence, coming back to basics. Innovation is a business necessity but it is important to understand what you are trying to do and what good looks like for you. What are the organisation’s aspirations in this regard? Once that is defined, the road to find the best tool and operating model might be less complex.   

The Forrester Wave Report (2016)[1] used 26 criteria to evaluate a list of 15 current Innovation Management vendors and grouped them according to (1) current offering in the market (2) strategy of the vendor and (3) market presence. This resulted in a list of leaders and strong performers that according to the report represent strengths and trusted expertise in the field. But the picture is much more complex as the authors allude to in the introductory contextualisation.

Consider the following nuances.

Technology firms operate on very similar business models

Industry operating models chase brutal quarterly targets, a maximisation of licenses sold to customers and discounts for multi-year deals.  Painstakingly logged and managed, sales discussions will focus on these main aspirations which can be counter to client needs. Continuity with staff presents another challenge. Direct dealings with a vendor can become problematic as staff turnover impacts on relationships and the history with the vendor. Consistency becomes a moving target. One can argue that the technology sector is still in its formative years. Standards and interoperability across platforms are limited, with the story often being about the ‘best’ widget in town. Some have compelling features that are more influenced by the development of user interface design, but in many cases, there are much maturing to do. 

Many organisations want a voice to get what they view as valuable. They prefer more flexibility in their engagement models with vendors, as the needs of the organisation will change with a maturing innovation capability and as new learnings are integrated.  Which brings us to the next point.

An innovation system does not create an innovative culture

There are many great systems out there. None of them is going to guarantee that innovation work in your organisation. Your system will most likely become your cornerstone for success and enable innovation if managed well, but your people and doing the right things will be your secret sauce. You will need to consider many things like strategy, leadership, management, effective communication, impacting on engagement, measurement of outcomes, ROI and much more. It is important that you manage this from the beginning.

The need for partners

Many vendors have not eloquently addressed the need for partners. Strategic services are being offered by some whilst sharing their view of best practice for the use of their solution with customers is part of the package. But as put forward by Forrester’s report, few innovation management solution vendors can address wider business transformation requirements alone and need to work with outside consulting partners. Recent partnerships between KPMG and Idea Factory and IdeaScale and the content platform InnovationManagement.se play to this point. It will, however, require vendors to actively build and contribute to the market in a collaborative manner. In too many instances the opposite is still true and vendors are found to dilute the innovation ecosystem instead of positively and actively contributing to it. The winners in the innovation systems market will most likely be those that recognise the exponential power and value of true collaboration to the benefit of all parties, especially their client’s. The most valuable partnerships will be those between a vendor and a partner offering expert strategic innovation expertise. Trust, ethics and respect still make good business sense and often provides an indication of vendor reliability. Choose your vendor well in this regard.

The market, maturity and attitude

In all of this, however, the client has a responsibility too. Do you have real strategic intent for innovation in the organisation?  In other words, do you have a budget in support of building an innovation capability and culture, and are you open to working with your suppliers to make it work? It might seem like an obvious question but it is an important one. Why invest in an innovation management system if you do not intend to enable it. Tripping over dollars to pick up pennies does not make sense, especially in this scenario. Your innovation team, if you have one, needs to be empowered for success. They cannot be expected to go at it alone. That is setting them up for failure from the beginning. And just like your vendors and your strategic partners, it is necessary to pull together a dynamic innovation team internally as well. This is no place for ego’s, immature jockeying for power or feeling intimidated by partners or team members for fear of being stood up for expertise. You will need to collaborate to be successful. Your external team are there in support of your success. If your innovation team cannot appreciate this your efforts will be compromised and your investment will most probably be wasted.  Take heed, this is a leadership responsibility.

So when starting out on the road in evaluating innovation management systems, think further than the obvious. Whichever way you dress it up, innovation is a complex coming together of multiple capabilities. Getting it right is hard and finding the right solution takes effort.

This article attempted to call out a number of the key tenets to consider when setting off on the journey.  Like in all relationships, it is often the little foxes in the vineyard that can destroy something good.

This article is written by Mrs Henra Mayer, CEO of Innocentrix and Da Vinci Head of Faculty related to the Management of Innovation.

About Innocentrix

Innocentrix is an ideas and innovation company. We help our clients to deliver the future. We improve existing offerings or bring to market new business models, projects, products or services. We help our clients to Create, Engage and Deliver. Find us at www.innocentrix.co.za.

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[1] The Forrester Wave™: Innovation Management Solutions, Q2 2016 

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