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Cornelius Streit
Manager, Singapore
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When to Outsource Innovation?
According to Michael A. Stanko, Jonathan D. Bohlmann and Roger J. Calantone in the article “Outsourcing Innovation” (Executive Adviser, November 2009), outsourcing research and development and the creation of new products can help companies to slash costs, speed development time and tap into talent outside the company. Based on an analysis of 359 companies, following four situations call for outsourcing innovation:
1. When companies would need to add lots of new knowledge to innovate.
2. When intellectual property is not well protected in the industry and new ideas can spread quickly from company to company to limit spending.
3. When companies have had lots of experience with outsourcing, as they are able to better manage the situation to produce effective results.
4. In the early stages of a project, when there are lots of technical hurdles to be overcome and the outcome is far from certain.
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Abhishek Tiwari
F&A Professional, India
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When to Avoid Outsourcing of Innovation Though sometimes be the best option, outsourcing may not be the best choice for innovation:
A. If an innovation is critical to a shortly scheduled product launch, outsourcing should be avoided.
B. If innovation can be done by a single individual, outsourcing can be avoided.
C. If innovation is inexpensive, outsourcing should be avoided.
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Harpreet Singh
Student (MBA), India
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When to Outsource Innovation Outsourcing is excellent idea, specially in environment where competition is very high, it helps in reducing cost of production for companies and provide them cost efficiency to face competition and it provides growth to countries economy.
But, as far as outsourcing of innovation is concerned it is not advisable to outsource innovation or inventions because there is really any opportunity for creativity and implementation of new ideas.
Secondly there are other crucial factors like environment of countries, availability of skilled people, and time period how long one can continuously go for outsourcing.
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Arturo Granados
Partner, Peru
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Collaboration better than Outsourcing Innovation Outsourcing is perfect for a company that produce commodities, like mining. Because companies in the same industry do not compete.
Most of the time, innovation is done with university collaboration and with certain institutes. This sort of collaboration empowers not only research, it also develop new ways to do business.
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David Matthews, United Kingdom
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Outsourcing Innovation is a Bad Idea Daft idea, if you don’t do any internal innovation specifically R&D then you lose absorptive capacity. The firm will not be able to recognise the benefit of an innovation or its context in the outside world. Do your own R&D and use the knowledge gained to recognise value and buy up other companies/ip that contain value.
Innovation is a core capability - Do it in house.
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Darren Harrop, United Kingdom
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When to Outsource Innovation Many organisations do not have the in-house skills to deliver an entire innovation project. On that basis, rather than carry additional risk exposure, outsourcing all or parts of a project is often a very sensible idea.
Offshore outsourcing is particularly suitable for reducing cost, as long as the right partner is selected. Outsourcing is often used as a way to commoditise skills, driving costs down. It can be an effective way to mitigate cost and risk within product development.
As for security and intellectual property rights, an effective way is to avoid bundling the project into a single site. Within Epiphany, we use our own outsourcing capabilities, but because of the nature of our work we often split projects into discreet parts spreading them geographically. This adds another layer of protection.
Overall, there is no doubt that in the right circumstances, outsourcing innovation, research, or development can be the right thing to do. But I think this view is not new, rather, it is widely held.
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Elena Palkina
Manager, Russian Federation
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When to Outsource Innovation To my opinion, inno-outsourcing is suitable for the big companies. Any way, this process should be held and controlled by a customer in order to protect IP.
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PELMONT
Consultant, France
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Outsourcing Must Be Monitored Outsourcing innovation is a key for product development, and so for business development. Nevertheless, outsourcing must be monitored.
Monitoring: fixing objectives, milestones and deliverable, but also provide reversibility.
In this way, outsourcing can be a real added value for any company.
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kvssiyer
Consultant, India
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Selective Outsourcing Innovation True outsourcing innovation reduces cost of innovation but also minimises the flexibility of the extent and scope of innovation. So judicious selection of participants and items to be innovated need considerable thinking and extensive discussion within the company.
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Ceferino Dulay, Jr.
Philippines
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Outsourcing R&D: Hard to Find Know-How On the surface, outsourcing R&D and product development may seem cost-effective but there are many other things that come in play.
If a company stays close to its knitting, the know-how may not even be found outside. For example, product extensions and those where existing equipment will be used are better done in-house.
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Allemeersch Johan, Belgium
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Insourcing of Innovation I would prefer to use insourcing of innovation, where I don't have own resources. Why should you outsource innovation? To only keep the old process and products in house? How will you survive on the long term? At a certain moment you don't add any value anymore to your customer.
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Elena Palkina
Manager, Russian Federation
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Outsourcing R&D I'd like to point out that investments in innovation (R&D) can be extensive nevertheless they not always ensure return of the capital employed (nobody knows when and what result will be achieved).
So, I think, in the case of successful research (even if it seems to be out of required pay-back period of investment) the management of a company can sell the rights on IP to other firms but in a defined period of time. This will allow, on the one hand, the company to be more competitive than its rivals, on the other hand - by further selling the rights to use this IP - to ensure profitable initial investments.
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Svein Ulset, Norway
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Outsourcing Innovation Many oil companies regularly outsource innovations (new technology). These are developed in joint R&D project with upstream suppliers. Oil companies buy, sell or share property rights in the new technology with the end purpose of creating competition among suppliers in producing and selling the new product, later also to rival oil companies.
The sponsoring oil company may acquire the exclusive right to use the product for a limited period of time before it is also sold to competing oil companies. Thereby the sponsoring oil company will get a head start over their competitors, not only from participating in the R&D project, but also as first innovative user of the new technology.
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Simon Gray
Manager, Switzerland
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Outsourcing R&D is Needed Due to increasing complexity it is close to impossible for any single organisation to maintain specialisation in a growing range of fields. The answer for large organisations (with long-term developme...
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Prashant
Business Consultant, United Kingdom
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Outsourcing Innovation and Transformation Innovation can be of three types:
1. Innovation in values, ex- marketing, advertising
2. Innovation in usage, ex- phone
3. Innovation in product/ service, ex- cars, cornflakes etc
If the company ...
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L. Harnamsing
Mauritius
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Outsourcing Innovation Minimizes Cost but Hampers Morale Outsourcing is good for organisations when it comes to maximising profits or minimising cost because it has a direct relation with the competitive environment organisations are facing. The other side ...
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hamid mohamed ahmed
Accountant, Sudan
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Outsourcing Innovation Most organizations are operating in a very competitive environment and to stay alive through the dangers of competition the organization should build and support competitive advantage to reduce cost o...
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desu rama mohan
Professor, India
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Outsourcing of Human Resource The concern should be getting enough intellect who are committed to sustainable growth of an organization, protecting the individual rights and confidentiality.
Organizations are in search of committ...
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PAT O REILLY
Ireland
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Outsourcing of Innovation is Outsourcing your Core Business To outsource can have advantages and disadvantages. To outsource a service which you can undertake yourself is negative thinking - good management practice should be able to do the work and provide th...
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SIVASUNDARAM, India
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Outsourcing Situations Three situations when outsourcing should be done:
- When internal resources are dry.
- When there is an immediate need for a drastic change.
- When the company has a short time period and a long...
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Natasha Shamlou
Student (MBA), Iran
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Outsourcing Has Become Easier and Cheaper According to Jeffrey Phillips Raleigh in June,10.2010: over the last 20 years or so, as global barriers fell and telecommunications and information infrastructure increased, it has become easier and c...
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Alonso Acosta
Manager, Mexico
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Outsourcing Innovation? NO -- Co-Sharing: YES Innovation is too critical a competitive advantage to be fully delegated to a third part, co-sharing might be a wiser choice so as to be able to tap in to external creative sources and know how, but e...
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Norm Nopper
Managing Director/Consultant, Canada
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Outsourcing Innovation... Can you outsource learning? Cornelius, I’d never seen the phrase “outsource innovation” until your post. It struck me as strange because those two words just don’t seem to go together. It’s a thought provoking question.
Being a...
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