Customer Integration in Innovation Processes via Operating Information Systems

Potential And Challenges Of Customer Integration In Innovation Processes

One of the advantages is the increased efficiency and shortened innovation cycles. Including the customer in the process not only raises the number of absolute ideas for new innovation projects but also produces ideas that are more realistic, more significant, and more likely to be implemented successfully. Actively involving the customer reduces uncertainties in the market and lowers the risk of not meeting the demands of the target audience (Herstatt, Stockstrom, Verworn, & Nagahira, 2006, p. 48). Reciprocal learning processes and the joint creation of offers also allow further knowledge to flow into the innovation process, give the customer additional product knowledge, and convey an increased sense of customer proximity (Luettgens & Gross, 2008, p. 32). When developing new services, it can be particularly important to include customers because they represent such a major part of the service itself. Observations suggest that companies involving customers in the development process tend to offer higher quality services than those that do not. A study performed by Matthing et al. (2004, p. 488) shows that customer ideas in the service sector are more innovative in a joint development setting with instruction provided by company employees. In summary, one can state that customer integration positively affects the efficiency of new services (Alman, 2006).

Science knows two problems that are not sufficiently taken into account when designing innovative processes. On the one hand, R&D departments focus too much on their own capability and the familiar solution space (“local search bias”). On the other hand, customers possess information about customer demand. This implicit knowledge is hardly accessible for the company (“sticky information”). By involving customers, this information can be obtained more easily and thus be incorporated in the solution finding process. The knowledge base created this way is difficult to imitate, which makes it a long-term competitive advantage. The customer therefore plays a central role in open innovation processes (Luettgens & Gross, 2008, p. 30ff). Companies should value their customers' opinions highly, incorporate them in the process early on, and aim for a close level of customer cooperation (Tan, Xie, & Shen, 1999, p. 284).