R&D and Innovation programs
Enablers
An innovation taskforce
No matter how successful a company might be, the sooner or later a change in the environment (political, economical, legislation etc.) might have a striking impact on future success. Innovation is always a crucial factor for differentiation. But especially in the enterprise software industry, radical innovation is very difficult to achieve for the large 500-pound gorilla companies (SAP, Oracle etc.) The innovativeness of these companies has sunk to the level where SME’s are being much more creative nowadays. A company-wide strategy for innovation, where a special taskforce is concerned with the task of the two fundamental drivers for innovation: sensing and exploiting of emerging technologies and opportunities might be the best solution.
These taskforces trigger R&D and corporate Innovation programs because companies are still re-inventing the wheel instead of challenging the old assumptions. A new business model where a cross-functional group of strategy managers detect trends in technology and an R&D facility which tries to capitalise these identified trends to challenge old assumptions is what these enterprise IT companies need the most. We foresee that enterprise IT vendors with the most efficient and effective business model for leveraging new technologies will have a bigger chance to attain a sustained competitive advantage. An innovation taskforce is thus a very important enabler for constructive R&D and innovation programs to arise.
Inhibitors
Rigor
Innovation in the enterprise software industry is difficult because this type of software is usually constrained by well-known industry accepted regulations, procedures and standards. This is a destructive force, as this rigor inhibits companies to think ‘outside the box’. An R&D facility or company-wide innovation strategy might overturn this effect.
Old assumptions and old processes
Usually companies that have R&D facilities are rendered to reason from an inside-out perspective, disregarding any market developments about emerging technologies or opportunities. In the upcoming five years we may expect the business models of these companies to change. I expect that enterprise software will be no longer driven by industry rigor and assumptions about architecture. At this point in time, the enterprise software industry can be compared to a communist regime. A database is always in the center of everything and to make such a thing as BI work for you⎯which doesn’t make predictions but merely reports about your historical data⎯you need a very expensive SAP implementation. Which in turn requires you to make huge expenditures in service and consulting to make it all work. Enterprise software companies put too much emphasis on derivative products like databases and other tools. Old assumptions or processes are continued even though newer technologies exist.