Cross-Industry Innovation Processes

Cross-Industry Innovation Processes

Tobias Hahn Cross-Industry Innovation Processes Strategic Implications for Telecommunication Companies Preface by Prof. Dr. Rüdiger Zarnekow

Tobias Hahn Bonn, Germany Zugl.: Berlin, Technische Universität, Diss., 2014 u. d. T. The Open Service Innovation Process in Cross-Industry Collaboration Networks and its Strategic Implications for Telecommunication Companies ISBN 978-3-658-08826-2 DOI 10.1007/978-3-658-08827-9 ISBN 978-3-658-08827-9 (ebook) Library of Congress Control Number: 2015931211 Springer Gabler Springer Fachmedien Wiesbaden 2015 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Printed on acid-free paper Springer Gabler is a brand of Springer Fachmedien Wiesbaden Springer Fachmedien Wiesbaden is part of Springer Science+Business Media (www.springer.com)

PREFACE Telecommunication markets are experiencing fundamental changes. Political, technological, business and societal conditions are changing and breaking up traditional, historically grown structures and markets. Examples are plentiful and include the deregulation of telecommunication markets, the convergence of telecommunication, media and internet industries, the growing importance of software-defined networking and rapidly changing customer behavior. Competition between telecommunication companies increases and leads to new value chains, business models and products. Rising to these challenges, telecommunication companies increasingly focus on cooperations in the area of research and development. Especially cooperations with partners, that possess complementary skills, play an important role. On an operational level, these cooperations are traditionally implemented in the form of technology partnerships or joint ventures. In recent years the concept of open innovation has gained importance in this area as well. A close cooperation with partners, suppliers and customers is regarded as a promising approach. Nevertheless, in practice open innovation is still at an early stage and the actual success of open innovation projects varies greatly. If the innovative capacity of a single company or a single industry sector is not sufficient, cross-industry cooperations offer a promising option. In crossindustry cooperations companies from different industry sectors jointly carry out innovation activities. Even though in practice the potential of cross-industry cooperation has been recognized, there are still only a handful of successful examples. This is especially true within the high-tech and telecommunication industry. It is therefore very commendable, that this book specifically focuses on describing cross-industry innovation projects between telecommunication companies and companies outside the ICT sector. The insights are extremely valuable from a practical industry as well as from a scientific perspective. They offer deep and detailed information about successful innovation processes and provide practical advice and recommendations for innovation managers. Prof. Dr. Rüdiger Zarnekow Technical University of Berlin, Chair for Information and Communication Management

ABBREVIATIONS AAL B2B B2B2C BMW BPO BT COPD CTO DSL DT EU FedEx FTE GSM ICT IT KPI LOI LTE M&A M2M MoU MS Ambient Assisted Living Business-to-Business Business-to-Business-to-Consumer Bayerische Motoren Werke (BMW AG) Business Process Outsourcing British Telecom Group Plc. Chronic Obstructive Lung Disease Chief Technology Officer Digital Subscriber Line Deutsche Telekom AG European Union Federal Express (FedEx Corporation) Full-Time Equivalent Global System for Mobile Communications Information- and Communication Technology Information Technology Key Performance Indicator Letter of Intent Long Term Evolution Merger and Acquisition Machine-to-Machine Memorandum of Understanding Microsoft Corporation

VIII ABBREVIATIONS NCS NDA NPD NTT OBS OECD P&L QDA R&D SIM SingTel SLA SME TEF Telco TPP TRIZ TSI UMTS VCI VGEI VF National Computer Systems Group Non-Disclosure Agreement New Product Development Nippon Telegraph and Telephone Corporation Orange Business Services Organization for Economic Co-operation and Development Profit and Loss Statement Qualitative Data Analysis Research and Development Subscriber Identity Module Singapore Telecommunications Ltd. Service-Level Agreement Small and Medium-Sized Enterprises Telefónica, S.A. Telecommunication (company) / Telephone Conference Technological product and process Teoriya Resheniya Izobreatatelskikh Zadatch (theory of inventive problem solving) T-Systems International GmbH Universal Mobile Telecommunications System Verizon Communications Inc. Vodafone Global Enterprise Inc. Vodafone Group Plc.

LIST OF FIGURES Figure 1: Research Question... 7 Figure 2: Research Process of the Present Study... 9 Figure 3: Structure of the Present Study... 11 Figure 4: Innovation Funnel... 21 Figure 5: Chronology of Data Analysis and Theory Generation... 36 Figure 6: Categories and Concepts... 41 Figure 7: Innovation Project Process - Energy... 51 Figure 8: Innovation Project Process - Automotive... 63 Figure 9: Intentions of Innovation Project - Automotive... 71 Figure 10: Innovation Project Process - Health... 79 Figure 11: Project Structures (1/2)... 89 Figure 12: Project Structures (2/2)... 90 Figure 13: Platform Innovation Project... 91 Figure 14: Innovation Partner and Pilot Customer... 92 Figure 15: Practical Innovation Process Model for Telcos... 122 Figure 16: Extended Theoretical Innovation Process Model... 149

TABLE OF CONTENTS ABBREVIATIONS... VII LIST OF FIGURES... IX TABLE OF CONTENTS... XI 1 Introduction... 1 1.1 Motivation and Practical Relevance... 1 1.2 Existing Research... 3 1.3 Objective and Boundaries... 5 1.4 Research Approach... 9 2 Theoretical Background... 15 2.1 Product Service and Physical Good... 15 2.2 From Invention to Innovation... 16 2.3 Innovation Processes and Open Innovation Approaches... 19 2.3.1 Generations of Innovation Process Models... 19 2.3.2 Phases, Differentiation and Practical Integration... 21 2.4 Cross-Industry Innovation... 23 2.4.1 The ICT Industry and its R&D Characteristics... 23 2.4.2 Collaboration in Innovation Projects... 25 3 Methodology... 27 3.1 General Considerations... 27 3.2 Selection of Cases... 29 3.3 Data Collection Method... 32 3.4 Design of Guideline... 33 3.5 Realization of Data Collection... 34 3.6 Data Analysis... 35 4 Within-Case Analysis... 45 4.1 Telco-Energy-Industry Service Innovation Project... 46 4.2 Telco-Automotive-Industry Service Innovation Project... 58 4.3 Telco-Health-Industry Service Innovation Project... 74 5 Cross-Case Analysis... 87 5.1 Market and Industry Specifics and Commonalities... 87 5.2 Innovation Project Characteristics... 89 5.2.1 Structure and Management... 89 5.2.2 Process Phases... 93

XII TABLE OF CONTENTS 5.3 Cross-Industry Collaboration... 94 5.4 Organizational Environment... 96 5.4.1 Traditional Resource Allocation... 96 5.4.2 Organizational and Procedural Changes took place... 97 5.4.3 Environmental Rigidity... 98 5.4.4 General Conditions... 100 6 Analysis and Discussion of Findings with Existing Literature... 103 6.1 Market and Industry... 103 6.1.1 Innovation Speed and Approach... 103 6.1.2 Commercialization and Customer Acceptance... 104 6.2 Innovation Project... 105 6.2.1 Pilot Customer and/or Innovation Partner... 106 6.2.2 Innovation Project Phases and Activities... 107 6.2.3 Project Management... 109 6.3 Cross-Industry Collaboration... 110 6.3.1 Partner Selection... 110 6.3.2 Contractual Structures and Trust... 113 6.3.3 Methods and Tools to Improve Collaboration... 114 6.4 Organizational Environment... 116 6.4.1 Processes and Structure... 116 6.4.2 Incentive and Support Systems... 118 7 Practical Strategic Implications... 121 7.1 Conduction of Cross-Industry Service Innovation Projects... 121 7.1.1 Practical Process Model for Telecommunication Companies... 121 7.1.2 Parallel and On-going Activities... 128 7.1.3 Overarching Project Structure and Management... 130 7.2 Organizational Preconditions and Requirements... 131 7.2.1 Located within the Company s Structure... 131 7.2.2 Companies processes... 134 7.3 Collaboration Fit... 136 7.3.1 Mindset and Organizational Conditions... 137 7.3.2 Common Preconditions and Project Structure... 137 7.3.3 Harmonization and Intensity of Collaboration... 139 7.4 Portfolio Expansion... 140 7.4.1 Transfer and Anchor of Innovation... 141 7.4.2 Self-Concept, Strategy and New Services... 142 7.5 Overall Considerations in Practical Realization... 143

XIII 7.5.1 Impact and Interdependency within the Telco Organization... 143 7.5.2 Transferability Deliberations for Potential Partners... 145 8 Impact on Existing Theoretical Innovation Process Models... 147 8.1 Requirements for Theoretical Innovation Models... 147 8.2 Propositions for Theoretical Innovation Process Models... 149 8.2.1 Extended Fuzzy Front End... 150 8.2.2 New Explicit Phase in the Innovation Process... 151 8.2.3 Sequential Phases and Parallel Activities... 152 8.2.4 Innovation Network Additional Components... 154 8.2.5 Innovation Network Characteristics... 155 9 Conclusion... 159 9.1 Practical Contributions... 159 9.2 Theoretical Contributions... 161 9.3 Limitations and Further Research... 163 REFERENCES... 167 APPENDIX... 187 I. Interview Guideline... 187