Have you ever wondered how other companies & organizations manage to develop the most excellent, most innovative products and services? While it’s true that some of them have a highly talented team of in-house designers and engineers, most rely on outside firms to help them come up with the next big thing in their respective industries.
Remember what Steve Jobs said about innovation? “Innovation is basically the ability to see change as an opportunity – not a threat.”
These futuristic words fit perfectly in innovation outsourcing. If you haven’t noticed, technology has completely changed everything we do. Everything seems to move much faster these days, and businesses now have to adapt accordingly to survive.
Today’s entrepreneurs are becoming more flexible with their ideas and processes, so it’s no surprise that innovation outsourcing is beginning to gain momentum and popularity among startups.
It has become an essential industry in the business world, as organizations turn to innovation outsourcing to stay ahead of their competition & continuously improve their services and products.
- But what is innovation outsourcing?
- Why would you want to outsource innovation?
- What do the case studies say about innovation outsourcing?
- How to choose a reliable innovation outsourcing partner?
Read on to find out!
What defines Innovation Outsourcing?
Innovation outsourcing is what it sounds like; using a third party to develop creative, innovative ideas that will help your business succeed – or take it to the next level of success.
While innovation outsourcing can seem like a simple concept, there are a lot of details that go into defining it. As with most questions of definition, you have to look at what is done & why it’s done to understand innovation outsourcing. Understanding these elements helps us define what innovation outsourcing entails.
Answering the following early on will help you make a sound decision:
- Should I outsource innovation?
- If so, how much should I spend?
- How much of our staff’s time should I spend on innovation?
- Do I have all of the bases covered, or should we consider adding consultants/experts as part of our outsourcing efforts?
While the rest of the answer depends upon your specific business niche & budget, the first question is what you will explore here. To answer whether or not to outsource innovation, let’s explore its pros & cons.
Top 7 Benefits of Innovation Outsourcing
1) Connect with Your Clients Faster
You can ensure that your firm connects with clients more quickly by outsourcing innovation. Whether it’s faster turnaround or research into new technologies that will improve their experience, quicker response times are always going to be appreciated.
When research and insights are gathered independently, and at different times of the year, there’s bound to be confusion about messaging. Outsourcing innovation keeps everyone on-brand from start to finish! By outsourcing innovation, you’re freeing up your team members and ensuring a consistent message across all marketing channels.
2) Smooth Collaboration With Experts
Even if you’re an expert at your job, some things make your job easier (design and development, marketing, customer service) that you could outsource. It helps you focus on precisely what it is that makes your company valuable.
For example, if your product/service isn’t very visual and brand identity is essential for your customers, consider hiring a professional graphic designer for your creative needs. There are plenty of skilled freelancers available to lend their expertise at a fraction of full-time staff costs.
3) Reach your Goals Faster
The best part about outsourcing innovation is saving time and getting better results. Your internal staff are freed up for other projects and tasks so they can work faster, smarter, and more efficiently. Plus, as a bonus, your team will be spending less time bouncing ideas off each other (after all, they’ve already been discussed), which means they’ll get results that much faster.
That gives them even more time to concentrate on their core strengths! It makes them more valuable in the long run! In fact, by freeing up your employees’ time, you’re helping improve their skills.
4) An Innovative & Smarter Approach
It’s common to be bogged down by the minor details, day-to-day operations, and other time wasters that can keep you from taking a step back and looking at your company as a whole. If you’re serious about your business growth—and who isn’t?—it only makes sense to work smarter. By outsourcing certain aspects of innovation, you’ll have more time to focus on what matters.
The infographic below offers insights into the projected revenue of the outsourcing market.
Source: Statista- IT Outsourcing
According to recent research from Global CEO Research International, 81 percent of CEOs believe that outsourcing will be critical for their company in 2022. The bottom line is that innovation outsourcing is about efficiency and productivity.
5) Cost-Effective Solution to Make the Most of your Idea
When it comes to innovation, you don’t want to sacrifice quality. However, with a lean budget and limited resources, some companies struggle to find ways to innovate. Outsourcing your innovation efforts can be much more cost-effective in the long run because of its efficiency.
Outsourced innovation experts can help you create innovative products and services that meet your needs without breaking your budget. The upfront costs of outsourcing may seem high, but you will be surprised by results when looking at everything outsourced innovators offer.
For instance, outsourcing could give you access to intellectual property (IP) rights such as patents or trade secrets that could save thousands down the road in litigation fees. The significant aspects include strategy consulting, R&D services, etc.
6) Offers Competitive Advantage
Your brand can stand out from competitors who aren’t taking advantage of innovation outsourcing. Your company can differentiate itself by becoming more innovative and adopting an IT outsourcing company sooner than your competition.
The ability to adapt to change quickly creates a strong foundation for growth, which will help your business thrive in the increasingly digital world. With innovation outsourcing, you don’t have to waste resources on research and development; instead, you can focus on other aspects, like marketing & product design.
It allows businesses to spend less money while still getting new products or services at their customers’ hands much faster. From an efficiency standpoint, it’s almost always better to create once & use it many times rather than repeating yourself.
7) Minimizes Risks of Failure
When you outsource innovation, you take a financial risk, but a calculated one. Because outsourcing innovation is less risky than doing it. It gives you room to focus on your core competencies and not worry about failing in an area that your business doesn’t have control over.
The perfect moment to invest in innovation is financially stable but not constrained by resources. It also removes any pressure associated with innovating and frees up time for growth initiatives. Just because you haven’t innovated yet doesn’t mean you shouldn’t start now.
That was the bright side of outsourcing innovation. Let’s explore where it can all go wrong and become distasteful for your enterprise.
The Major Drawbacks of Innovation Outsourcing
Theft of your idea
It’s a genuine concern—you pay someone outside your company to develop your idea, and they take it and run with it, either on their own or with another company. Since you don’t control what happens once you hand over something for someone else to work on, be sure that intellectual property clauses are built into whatever contracts you sign.
Also, make sure everyone working on an innovation project understands how important it is for all of your information—even ideas not yet fully formed—to remain confidential until you’re ready to reveal them.
Innovation isn’t just about a one-time burst of creativity; companies that do more have more success in everything from new product development and improved customer service to the overall growth and market share.
Control over the idea development is reduced
It is especially true if you outsource a creative concept, such as a new logo design. You might not be delighted with what you receive because it may not look exactly how you imagined it would.
Having limited control over how an idea develops can be frustrating for any entrepreneur with a clear vision for their project. If your idea is fundamental to your business, consider handling it in-house so that you have complete control over every step of its development.
An Infamous Case Study of Innovation Outsourcing: Cameron Winklevoss
As a businessman, you must have watched the worldwide sensation of the Social Network. The movie depicts how innovation outsourcing can completely steal ideas.
The Social Network movie is open to interpretations as no one can confirm whether Mark Zuckerberg stole the idea behind Facebook or an original concept. However, we witness how a bright & captivating idea by the Winklevoss twin brothers was lost to Mark Zuckerberg for innovation outsourcing.
So, my suggestion is to go with a strict NDA and only trust reputable firms doing outsourcing for a while. I refer to Clutch when looking for vendors – they vet them all. The most important thing is how you select vendors, rather than which vendor you choose.
You can now decide whether innovation is a suitable investment based on the pros and cons. And, if you are sure to outsource, the next aspect of this article is crucial for you.
How to Choose a Reliable Innovation Outsourcing Partner?
Step1: Define your goals clearly
Before making any decisions about outsourcing your project, it’s essential to define your goals and know what you want.
- Are you looking for an idea partner who can help develop and guide your ideas?
- Or are you looking for a company that can generate ideas on its own?
If you’re looking for an idea partner, look for an IT outsourcing company that has a creative team available. Most outsourcers will have one or more brainstorming sessions to help you come up with ideas. Once you know what you want, it’s convenient to find a suitable partner.
Once you decide on an idea, it’s up to you and your team to make it a reality. Make sure that your outsourcer offers some degree of customer support during development so that you can get in touch if there are any issues with your prototype or final product.
Step2: Find Professional with Technical Expertise
Look for an outsourcer that has proven experience and track record. Make sure your selected partner knows how to work within your industry. For example, some outsourcing companies only offer services specific to certain industries. Customer support should still be provided in case something goes wrong.
Working closely with your chosen partner from start to finish is vital, so check references and ask former clients about their experiences. If possible, take a look at other projects your potential outsourcing partner handles and talk with any current clients they may have (if they’re willing).
When considering all of these factors along with other important information—such as cost and delivery time—you should feel comfortable choosing a service provider that meets all of your needs.
Step-3: Check Certifications
Today, it’s critical to choose an outsourcing partner with a recognized certification. That way, you can be assured that the outsourcing partner will complete your project according to industry standards & best practices. Make sure they have experience delivering similar projects – including client references – so you can ensure that what you’re paying for is being offered.
Checking references is simple: Ask each potential partner’s previous clients about their experiences working with them and what they would modify if given another chance.
Also, look at how a provider communicates about their certification; does it come up in conversation naturally, or do they require some prodding? It’s essential to feel confident in your vendor’s skills and that you work well together on a personal level.
Step-4: Verify Quality of Customer Support
Make sure you select an available partner to answer your questions and offer support with whatever problems may arise. One of the outsourcing’s biggest draws is its potential to free up time on your part.
A valuable partner will ensure that time remains free of concerns and issues. Always check references before hiring anyone, and don’t be afraid to ask tough questions—your project may depend on it!
Outsourcing innovation works. With large companies focusing on their core competencies and smaller companies willing to pay for results rather than ideas, outsourcing innovation is a practical method for small and large firms alike.
If you’re looking for results from your next idea, look no further than outsourcing innovation! Outsourcing innovation works. With large companies focusing on their core competencies and smaller companies willing to pay for results rather than ideas, outsourced innovation is a practical method for small and large firms alike.
If you’re looking for results from your next idea, look no further than IT Outsourcing services!