As New Technologies Emerge, Can Businesses Find the Right Opportunities to Outsource Innovation?
September 29, 2021
As the global economy becomes increasingly complex, the need for an organization to innovate is brought into sharper focus. To protect their businesses and grow, leaders need to be able to make the right decisions when it comes to selecting the right technology partners. Essentially, those partnerships can allow businesses to outsource innovation.
Finding the right partner to whom you can outsource innovation means a business can stay at the forefront of available technology and constantly bring fresh ideas to its clients.
This trend can be seen across industries. In 2019, the Mayo Clinic entered a 10-year partnership with Google to accelerate healthcare innovation. More recently, the partners have embarked on the creation of an “AI factory” focused on developing artificial intelligence solutions that can be integrated into clinical workflows.
In the financial space, financial institutions are partnering with FinTechs — financial technology companies — to develop innovative ways of better meeting customer needs. JPMorgan Chase & Co. announced this year that it was purchasing OpenInvest, a FinTech startup whose products allow financial advisors to build, manage and report on environmental, social and governance (ESG) portfolios.
The insurance industry has seen numerous instances of companies partnering with InsurTechs. For example, Allianz Global Corporate & Specialty partnered with the InsurTech Flock to deliver app-based on-demand drone insurance.
Making these partnerships work involves three key elements: business strategy, monetizing the partnership, and bringing technologies into the organization’s support function ecosystem.
“None of those three aspects is more important than the other. They have to work in sync,” says Preeti Asthana, director and head of global programs — innovation and partnerships at Aon. “The business needs to apply the model in a consistent way as it looks at emerging technologies, apply the same framework as it evaluates them, match the technologies to clients’ needs and then execute.”
There are several different categories of emerging technologies that might offer valuable innovation partnership opportunities. For example, digital experience partnerships could help with a client’s user experience across an organization’s systems. Analytics and data can be used to develop client solutions that deliver improved business insights and cut through complexity. Innovations based on sensors and the Internet of Things can help clients collect vast amounts of data and get real-time insights on everything from industrial processes to the supply chain. Advanced technologies such as blockchain are new to insurance, but cost and efficiency benefits are being realized.
Finding the Right Opportunities for Innovation
An effectively outsourced innovation program can allow a business to remain at the forefront of what’s available in its industry. “Organizations can ask themselves a few questions to identify the challenges technology partnerships can help solve,” says Asthana. “How do they see themselves evolving as they address those challenges? What initiatives do they have in place and what gaps do they need to address? Understanding that spectrum of needs takes the business to the next step of matching the right technology or solution.”
That process can take on even greater significance in volatile times, such as the current COVID-19 pandemic, when clients place greater value on business partners that can identify and deliver much-needed solutions in exceptional circumstances.
One area where the pandemic created great opportunities for innovative solutions was in managing and monitoring a remote workforce and getting an organization ready for a return to the workplace. This included monitoring pandemic conditions in various locations, readying workplaces, engaging employees, tracking vaccination data, as well as tracing contacts and employee infection information.
Delivering a Winning Partnership
For most organizations, making an outsourced innovation partnership work requires addressing three key factors: business strategy, monetizing the partnership, and bringing the partner technologies into the organization’s support function ecosystem.
The first element is understanding what sorts of technology and innovation fit appropriately with the organization’s overall strategy. “What is the firm’s strategy and how does it apply emerging technology to advance that strategy,” says Asthana. “How can it employ emerging technology to benefit clients?”
The next factor is how to achieve value from the partnership. “What is the monetization opportunity?” asks Asthana. “Where are you seeing needs in the market? Where are the real opportunities to generate incremental value?”
Finally, it’s essential to integrate the innovation partnership with the organization’s overall ecosystem. “How do we bring together legal, finance, marketing, procurement — all the support functions — in connection with the partnership in a way that they’re working cohesively and in a way that the partnership can achieve scale?” asks Asthana.
Applying the three factors together can allow businesses to make the right decisions when it comes to finding the right technology partner for innovation and use the resulting innovation to advance the business. Given the pace of technology startups, there’s no shortage of possible partners.
“There is immense availability of emerging technologies that greatly expand opportunities to outsource innovation,” Asthana says.
Taking Advantage of Innovation Outsourcing
For many businesses, the ability to deliver innovative solutions that help clients overcome their business challenges can be a key to long-term success. In many cases, outsourcing innovation to technology partners can be an efficient way of doing so.
“Many of these partnerships drive solutions across industries, while others are targeted toward specific industries,” says Asthana. “An emerging technology partnership model focused on how to collect better data, help clients understand it, provide better analytics and deliver useful solutions can be valuable to a variety of industries.”