Table of Contents

What is Innovation Outsourcing? Top Trends

Table of Contents
What is Innovation Outsourcing?

In today’s cutthroat global market, businesses are always scrambling to up their game through innovation. But let’s face it, innovating isn’t a walk in the park. It’s pricey, finding the right brains to work on it can be a headache, and coming up with something genuinely new? That’s another story. So, what’s the solution many companies are turning to? Outsourcing their innovation. Yep, you heard it right. Instead of trying to do it all in-house and maybe not getting it quite right, they’re handing over the reins to those who specialize in this stuff.

This article is about why outsourcing innovation is the new go-to move for many businesses. Plus, we’ll throw in some handy tips on picking the best provider for this important job.

What is Innovation Outsourcing?

So, what’s innovation outsourcing all about? In simple terms, it’s when companies decide to pass the baton of their innovation work – thinking of brainstorming new products or services, strategizing how to bring these ideas to life, and prepping them for their big market debut – to outside experts. It’s like saying, “Hey, you’re great at this, so you handle it while we focus on what we do best”.

The real deal with outsourcing innovation is that it lets businesses zero in on their main game while leaving the nitty-gritty of innovation to the pros. This way, companies can play to their strengths, using their time and resources wisely, without missing out on the cool stuff that comes with innovating.

Now, here’s what sets innovation outsourcing apart from the usual outsourcing stuff. It’s not just about cutting costs. Nope. It’s more about sparking new, creative ideas, adding real value, and turning those lightbulb moments into something you can use.

Why is Innovation Outsourcing Important?

Did you know that a whopping 70% of companies are either in the middle of a digital makeover or just about to start one? But here’s the kicker: in 2018, U.S. companies were shelling out an average of $14 million for these projects. Sounds like a lot, right? Well, it often isn’t enough to kick off big digitization projects from scratch. And let’s not even get started on the challenges of cooking up innovation in-house – it’s time-consuming, needs skilled folks, a bunch of tools, and guess what? It only works out about 30% of the time.

So, why are so many businesses turning to outsourcing for their innovation fix? Here are a few reasons:

  • Racing against time: In today’s fast-moving market, companies need digital solutions, and they needed them yesterday. The slow, trial-and-error process of in-house development just doesn’t cut it. Outsourcing to digital development experts offers a quicker path to getting things done.
  • Talent troubles: According to Gartner, 54% of big shots in the business world say finding skilled workers is their number one headache. This shortage means talent gets snapped up by the big players, driving up wages. Outsourcing opens the door to this world of talent without the hefty price tag and hassle of hiring them directly.
  • Money matters: Developing cool new stuff takes time and money, especially when skilled people are hard to come by. This can blow up budgets, especially for smaller businesses and startups. Outsourcing? It’s often the more wallet-friendly choice.
  • Experience gaps: Even if a company has the dough and the people, they might not have the know-how in certain tech areas. Like, being great at making mobile apps doesn’t mean you’re a whiz at blockchain. That’s where outsourcing steps in, bringing in the experts for these special projects.

The Advantages of Outsourcing Innovation Management

Innovation outsourcing is increasingly replacing traditional methods of innovation, offering a host of significant benefits. Here are some key advantages:

Cost and Time Efficiency

Think outsourcing is a money pit? Think again. It’s a smart move for cutting costs while keeping quality high. The MIT Sloan Management Review even says strategic outsourcing can slash innovation costs by a whopping 60% to 90%. This means businesses can breathe easier financially and spread their budgets around more effectively. Plus, there’s no need to spend big on specialist recruitment or building fancy infrastructure. And if an innovation project flops? Well, that’s not on your dime anymore. Outsourcing also means faster development – we’re talking 30% to 50% quicker – freeing up precious time for things like marketing and sales strategies.

Access to a World of Expertise and Innovation

Many businesses just don’t have the in-house chops to handle the whole innovation shebang. Outsourcing fills this gap with a diverse pool of talent and niche pros. These experts come loaded with knowledge and cross-industry insights, ready to inject fresh, creative ideas. They’re not boxed in by your company’s usual way of doing things, which can spark some out-of-the-box thinking.

Risk Reduction and Failure Minimization

Innovation is a risky business, with a failure rate for internal projects hovering between 80% and 90%. That’s a lot of potential for time and money down the drain. Outsourcing shifts this risk to external teams who are on the hook for delivering results that match your company’s goals. This setup tends to be less dicey than going it alone.

Accelerated Time to Market

In the race to get new products or services out there, speed is key. Outsourcing innovation can seriously speed up this process. External teams focus purely on cooking up new ideas, unburdened by day-to-day tasks, which means getting to market faster.

Leveraging Mature Processes

By outsourcing, you tap into established technologies and processes that providers have been perfecting for ages. This lets you skip the trial-and-error phase, saving a ton of time and resources that would’ve been spent figuring things out from scratch.

In a nutshell, outsourcing innovation management is a smart play. It saves time and money, gives you access to top-notch expertise, cuts down risks, speeds up market entry, and lets you take advantage of tried-and-tested processes. It’s a lot like the benefits you get from outsourcing software development and other IT services.

Essential Guidelines for Effective Innovation Outsourcing

Feeling a bit lost in the world of innovation outsourcing? No sweat! Here’s a rundown of some key tips to help you get it right:

Figuring Out What to Outsource vs. What to Keep In-House

First things first, decide what parts of your innovation process you should outsource and what you can handle internally. This choice should be based on a good look at your company’s strengths, weaknesses, culture, and goals. Be clear about what you want to achieve with this partnership and make sure these goals are in line with your company’s innovation strategy. Getting everyone on the same page from the start is super important.

Picking the Perfect Outsourcing Partner

The partner you choose can make or break your outsourcing experience. Do your homework to find someone who fits your needs. Look at their industry experience, services, past clients, and success stories. Chatting with their team can also give you a feel for their expertise and how they work.

Take EZtek in Vietnam, for example. They’re a top-notch IT outsourcing company known for their tailored services and competitive pricing.

Setting Up a Solid Governance Framework

Creating a governance model for outsourcing can be tricky. You need to be clear about who does what, how decisions are made, and how everyone will communicate. This helps avoid confusion and keeps things running smoothly.

Crafting a Detailed Service Level Agreement (SLA)

Once you’ve chosen your partner, it’s time to hammer out a service-level agreement. This should cover everything from the project scope and timeline to deliverables and payment terms. Don’t forget to include how to handle changes and when it’s okay to call it quits.

Staying on Top of Things

Just because you’ve outsourced a project doesn’t mean you can just forget about it. Keep a close eye on things and stay in touch with your outsourcing partner. Regular updates and feedback are key.

Evaluating the Results

After the project wraps up, take some time to see how it went. This helps you figure out if the partnership was a success and what could be better next time. It’s also a good chance to decide if you want to work with the same partner in the future.

Share

Related articles

Common Myths About Outsourcing
Outsourcing

10 Common Myths About Outsourcing

Outsourcing is a popular business strategy used in many industries, including IT. Companies team up with IT service providers to make their operations smoother and

Read More

Share

Let’s get in touch

Kindly fill out the form below, and our team will get back to your inquiries ASAP.

*By submitting this form, you have read and agreed to EZtek Term of Use and Privacy Statement

CALL US

0918 653 003

OTHER ENQUIRIES