Enabling innovation in information technology outsourcing : an empirical study

Information technology outsourcing has become a pervasive and important phenomenon in business organizations and there is substantial evidence about its benefits and pitfalls. Initially, firms used outsourcing as a way to lower costs, gain access to expertise and focus on core activities. Recently, there is a shift in focus and more firms are outsourcing to attain innovative products and services. However, current research is still unclear about how innovation can be achieved through outsourcing. Drawing predominantly from the dynamic capability theory, the objective of this paper is to explore how absorptive capacity unfolds as a process within and between firms when client firms outsource their information technology services with expectations of innovation generation. In this paper, we propose a research model that links absorptive capacity to innovation generation. We draw on three case studies to focus on how absorptive capacity, as a process, impacts innovation generation. Results show that assimilation and transformation stages are critical in generating radical innovation while acquisition and exploitation play a key role in incremental innovation. The implications of these findings for both researchers and practitioners are discussed.

Collaborative improvement : interplay but not a game

Collaboration literally means working together. Collaborative improvement is an extension of continuous improvement and can be defined as a purposeful inter-company interactive process that focuses on continuous incremental innovation aimed at enhancing the collaboration’s overall performance. Developing collaborative improvement is a protracted and difficult process. Previous research has identified a number of factors affecting that process and suggested that it is not so much the individual factors, but rather their interplay that determines the successful development of collaborative improvement. This article reports research aimed at developing a deeper understanding of that interplay. Ten relationships between ten factors are presented and discussed. It appears that vision, approach, trust and commercial reality are the strongest factors. These factors are, however, influenced by, or affect the other factors, notably national culture, partner characteristics and competences, the use of power, individual behaviour and commitment. The way this interplay develops varies from case to case and has great influence on the development of collaborative improvement.

The use of control systems in new product development innovation : advancing the 'help or hinder' debate

New Product Development (NPD) innovation is a critical activity in the current economic environment. In order to manage their NPD innovation projects, firms use Management Controls Systems (MCS). However, the effect that these systems have on NPD innovation is not clear. One stream of research suggests that MCS help NPD innovation while another stream suggests MCS hinder NPD innovation. Past research has shown that the role and style of MCS used may offer explanations on why MCS can both help and hinder NPD innovation. This paper adds another explanation by examining the relationship between three models (divisional, activity/decision and conversion/response) of a commonly used MCS, known as the Stage-Gate Process1 in the NPD innovation literature, and three types of NPD innovation projects (incremental, semi-radical and radical). The insights from an ethnomethodology informed field study are used to understand how and why the firms may use a different MCS (Stage-Gate Process models) for different NPD innovation project types.

A trilogy on discontinuous innovation. Part I : search

In this article we discuss the concept of Discontinuous Innovation (DI) and how it differs from incremental (or steady-state) innovation. We propose a model to conceptualise the different aspects of DI and discuss the complex nature of the DI process through an investigation of previous literature, and propose a sequence of articles roughly following the key components as described in the conceptual model, beginning with aspects of ‘search’. We then describe an on-going multi-national action research program established to investigate DI through the development of learning networks of firms in several European nations and Australia. The research progress to date is outlined and initial results of analysis on both quantitative and qualitative data collected thus far is used to explore how companies go about searching for clues or ideas about potential discontinuous innovations, which may either create competitive advantage for, or threaten the survival of the business. Key outcomes of the research to date include the identification of the most common search strategies within the participating companies and some descriptive analysis on just how these strategies are implemented in targeted firms. Finally we describe the proposed future research program and the two papers to follow completing the planned three part series on Discontinuous Innovation.