Procurement Transformation Blog

Procurement Transformation Blog

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Innovation And Partnerships

Every company, large and small, industrial or service oriented, understands that innovation will be a key driver for competitiveness in the coming years.

The importance of innovation is clearly displayed in two recent studies conducted by Capgemini Consulting in 2012: Innovation Leadership Study, conducted in partnership with the IESE Business School, and Innovation in Procurement. According to these studies, the number of nominations of “Innovation Executives” (a new senior level position focused on innovation) increased by over 30% between 2010 and 2011! This cross-functional position not only works to strengthen the traditional key roles held by R&D or Marketing Directors, but it also works to increase the focus on innovation across all business functions.

In order to better understand best practices and encourage dialogue among business leaders, Capgemini Consulting recently assembled approximately 30 senior executives from 20 different industrial and service companies in an intensive all day workshop. The topic of the workshop was innovation. Here are the five key themes that emerged from this event:

1. Strategic Management of Innovation

Innovation is an important part of a business’s overall corporate strategy. Therefore, it must be led by the business’ executive leadership team whose main challenge in leading the effort will be in managing the change that innovation brings. Middle management leaders, closer to a business’ operations, must also be involved in the process. Specific governance must be implemented to define roles and responsibilities of different innovation leaders.

2. Tapping Into and Exploiting Potential

In order to generate new ideas and opportunities, companies need to view their organization as part of an EcoSystem which contributes to the innovation process. The scope of this Ecosystem can be clearly delineated to include internal employees, clients, partners and suppliers. On the other hand, it can also be less defined and include only professional networks or business incubators. Given the potential for complexity here, multi-functional teams with senior leadership will need to be drawn in to support this new view of the organization.

3. Collaboration and Cross-Functionality

Innovation should not be viewed as an isolated effort or pursued within existing business silos. Rather innovation needs to be the combination of internal skills and capabilities oriented towards a common objective. To succeed, senior leadership must foster an environment that encourages dynamic collaboration. Here, cross-functional teams, structured processes, and knowledge management are key success factors.

4. Partnerships and Trust

Innovation requires transparency and openness to facilitate the free exchange of information and ideas as well as to make people feel comfortable in participating in the effort. Moreover, it requires organizations to adopt a legal and partnership framework that ensures “win-win” outcome for all parties involved.

5. Innovation Beyond Technology

Often we simply view innovation as a technological breakthrough with the past. But this view is a bit too myopic. In fact, business model innovation is one of the most important, and far too often most underappreciated innovation opportunities today. For example, transformation of a product-based business into a service-based business is an innovation that truly redefines the business model and can have an even greater impact on the organization than new technology can.

These five topics, deemed to be vital by the senior executives that participated in Capgemini Consulting’s event, were the central themes of the workshop. In the continuing spirit of transparency, openness and collaboration, we are pleased to share these ideas with you and hope that you use them to further innovation within your own organizations.

About the author

Adrian Penka
Adrian Penka
Mr. Penka is a Vice President in the Supply Chain Practice of Capgemini, specializing in procurement strategy and transformation with a strong background in process design and SRM and ERP implementations. Adrian also leads Capgemini’s Global Procurement Transformation Center of Excellence. Adrian has held a diverse set of roles during his 16 year tenure with Ernst & Young and Capgemini such as Mergers and Acquisitions Synergy Savings Strategy Advisor, Process Design, Sourcing, Contract Analysis and Management, Source to Pay Transformations, Technical Report Development, and Project Manager for full life cycle implementations of SRM and ERP systems such as Commerce One, Ariba, SAP SRM, and PeopleSoft.

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