Why R&D sourcing is critical

With the speed and extent to which digitalization is progressing, it is very challenging for companies to simultaneously develop their business model and new products and services using only internal resources. More and more companies are opting to outsource R&D in order to overcome the dual challenge.

Globalization, digitalization, new work methods and general changes in individual behavior and consumption patterns are driving companies to adapt established business models in an attempt to meet the requirements of a new digital reality. New networks and sourcing models are critical for ensuring future success.

“To be successful, you need a combination of talent and experience. Having one of these attributes is good, but now it is vital to have both,” says Markus Ekman.

Ekman is one of the keynote speakers of the upcoming “600 Minutes of Innovation and Product Development” conference in Helsinki which brings together leaders in the industry. With his vast experience of industrial product development, Ekman currently serves as Executive Advisor of the IT company Nagarro Software.

His reasoning regarding the concepts of talent and experience further strengthen the argument for the necessity of sourcing R&D.

“You may just have a brilliant idea, but it takes more to actually implement it. This is where solid experience comes in.”

The basic question still unanswered is where to find talent, experience and resources in this day and age. Or how to develop new, winning concepts, investments and a consumer base for new services.

“Companies must also ask themselves if it's still good business to take on all the new expenses and increased work that may result.”

Once a company has mapped opportunities, it must develop tangible models for collaboration and prototyping with their customers.

“You must be aware that prototyping is an iterative process with your customers.”

This is best achieved in collaboration with an external provider and Nagarro Software has extensive experience in outsourced R&D.

“The company has been active since 1996 and possesses the combination of knowledge, qualifications and experience needed.”

Nagarro presents its innovation model in “Nagarro´s Digital Transformation Toolkit”. Ekman also highlights Nagarro's own Digital Mobilization model for collaborating with customers in hackathons.

“Hackathons allow customers to focus exclusively on particular problems and come up with solutions that are sustainable for more rapid and radical changes in consumer behavior.”

Essentially, the current arguments for sourcing R&D are reminiscent of the arguments that, at one time, led to the sourcing of production and operations in IT infrastructure.

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