Between outsourcing and Open Innovation : An intercultural case study in the Telecom industry

Abstract: As the competition is increasing both nationally and globally, the companies are looking for new ways to decrease costs and gain innovation. The latest hot topic is Open innovation (OI), which can be seen as the ultimate limit in terms of accessible expertise, since it makes no difference in valuing an idea in terms of its origin. The trend is that companies are increasingly acknowledging the relevance of external resources, engaging in OI rather than relying exclusively on internal research and development (Chesborough, 2006). There are many types of supplier relations and innovation networks that the companies can take part in, but OI can be seen more as an approach and mindset that should determine how the companies act, whether it’s a question of being more open for ideas from another department, or even towards a competitor company. The companies are often using different types of collaborations and strategy and, potentially, trying to move up “the scale” towards OI.  With this thesis work I propose that there are many different aspects that the companies have to be aware of when moving up the scale from in-house development towards global OI. In reality, not many companies are taking the full advantage of OI, nonetheless knows the perquisites for doing so. OI may be the trend for development of companies, but today the nature of this is complex as companies are using different layers of the supplier and collaboration types in different parts of the organization. The success stories which Chesborough uses to exemplify the concept of OI do not address the grey area, or place on a scale, where many companies are situated in. This study will therefore explore the complexity in managing these collaborations that is not so present in the literature. How do you manage a collaboration that includes supplier relation, partnership and a want for OI at the same time? This means that there has to be a selection on which projects to collaborate with, as well as strategies for collaborating in a more innovative way and the steps that needs to be taken to get there.  In this thesis I am going to use this broad definition of innovation: Innovation is the total set of activities leading to the introduction of something new, resulting in strengthening the defendable competitive advantage of a company. (van der Meer, 1996) My partner company in this study is a global Telecom company (DU Technology) who would like to learn more about this and improve their collaboration with an Indian Service provider (ITC). These companies will be used as a case study to provide an example on how complex the movement towards OI can be, and what it demands from the companies to succeed. As the companies are working in a global context, I will also highlight the importance of an understanding for the cultural differences that affects collaboration and how to manage these when they are not a part of your own company.