Innovations Through Networks: Turning Strategic Suppliers into Innovation Partners

Abstract

There are two reasons why digitalization will lead to greater dependency on external partners than ever before: First, the gradual reduction of vertical IT integration leads to a shift whereby activities are externally outsourced. The keywords in this context are IT outsourcing and cloud computing. Second, the digitalization of many companies requires skills and competences that are not yet available. Although these can be developed in-house, it takes time, which is rarely available. For this reason, partnerships and networks will become more important. For example, trends such as smart grid or smart home technologies will have a lasting impact on the energy sector. Intelligent systems can search for relevant patterns based on mass data concerning the usage behavior of energy consumers to optimize energy consumption, as well as energy generation and supply. However, only a few energy companies have the necessary IT know-how to implement these disruptive innovations completely on their own. In such a case, strategic partnerships with technology companies can be an option to address the lack of competence. In the following, we describe and discuss the trend towards innovation partnerships. We first review the traditional sourcing strategies and their limitations.