Innovation Budget Planning: 10 Key Components
As a follow-up to our recent blog on “What to Include in Your Innovation Budget” we have created an innovation budget planning components list with 10 key items you should include in your innovation budget for the coming year.
As you will notice as you go through the budget checklist, some of the key components include taking advantage of external resources. As Benjamin Franklin said, “time is money,” so keep in mind that innovation planning may go beyond optimizing internal resources and require you to invest in outside resources in order to speed up production time.
With that in mind, here are 10 key components that should be a part of your innovation budget plan:
Innovation Budget Planning Components #1
Ask yourself: Do we have the skills and resources necessary for our project research and development? Can we bridge the gap with outside consulting resources?
Whether you need help developing innovation and best practices for your workplace for creating a culture of innovation or you want more direct training and workshops for your staff, Ezassi’s consulting services cover a wide range of needs. The ultimate goal of our consulting services is to move products to the market faster while continuing to handle new streams of innovation for improved ROIs across the board.
Innovation Budget Planning Components #2
Internal Staffing (Current and Forecasted)
Ask yourself: Do we have the right people assigned to the project? In our vast organization, how do we identify who possesses the necessary skills and how can we quickly organize the team?
In large global companies, this process can feel like looking for a needle in a haystack. That is why Ezassi offers a unique profiling component as part of the Innovation Software platform that allows you to profile your entire team with quick uploads including: patents, white papers, presentations and social media links. This allows you to quickly find the perfect people from within your organization who have skills to lead a team towards project success.
With this tool, you can also create communities of practice and other subgroups to help organize your teams so that they align with existing projects and your overall innovation strategy. You can find more information here . Unlike other software, Ezassi doesn’t limit the number of users. You can have as many users, internal or external, as you desire. Every employees can belong and you can build unlimited external solvers, experts, suppliers, academia — build out your innovation communities in any way, without limitation.
Innovation Budget Planning Components #3
External Scouting Resources
Leveraging scouting to leap frog a project is a fairly new practice among innovation organizations and something all of us should consider. With technology convergence, we no longer have the luxury of a 3 to 5-year window on R&D development to feel out what we think might be a bright idea.
Just this year alone, we’ve seen Amazon disrupt and revolutionize the grocery delivery business, the pharmacy benefit management business and most recently, the packaged meal business. Overnight, stocks are affected and corporate strategies shift from a growth mode to a defensive stance as they scramble to hang on to their turf.
Don’t get caught up in the notion that this same fast turnaround time is impossible within your company. Scouting external resources can provide you with a detailed snapshot of the current state of the area of R&D you are considering. It will let you know if someone else is already working on the same idea, what patents have been filed, what white papers have been presented and more! Again, you have managed to find the needle in the haystack and made the most of your innovation budget.
Another feature of Ezassi’s software is a unique scouting capability that we call cyber scouting. It allows users to scout out potential talent in a stealth mode or branded mode. If your company has a patent mindset, stealth mode allows you to field questions with prospective scientists and inventors in a way that avoids legal issues and allows for open conversations with external parties. All of these features can be configured according to your needs. You can find out more about the Ezassi cyber scouting solution here.
Innovation Budget Planning Components #4
Ask yourself: Do we need to augment our R&D efforts with external resources? Do we need to extend our supply chain to meet a technology need? Can we partner with people outside the organization to leap-frog our efforts?
These demands can be easily addressed with outside software solutions that can post an open innovation challenge to the world and within week, days and even hours, yield more responses than you could imagine. At Ezassi, as mentioned above, we offer a unique cyber scouting technology solution that allows a customer to pose both branded and unbranded challenges. By leveraging a curated network of over 3 million specialists and implementing dynamic search tools that are customized to your project, you are able to quickly gather responses and score and index. This allows you to instantly identify the best solutions and gauge how close submissions are to solving the challenge.
Our clients have pursued joint ventures based on responses that were minor matches because the body of work represented a new area of exploration that the customer had not considered or thought possible. Once you leverage challenges to pursue open innovation, the possibilities are endless.
Innovation Budget Planning Components #5
There are lots of innovation management software solutions in the marketplace. In fact, some companies have resorted to building their own because they found that existing software solutions had per seat licensing limitations that made solutions expensive and forced the customer into a specific platform.
In response to the clear need for a more affordable, flexible and customizable solutions, Ezassi just released its latest version of our robust innovation software (vs 3.0). What’s unique about this platform is that we designed it with the notion that not all innovation departments operate the same. It is completely configurable and searchable based on how you run your innovation management platform.
In addition, we don’t charge by seat, so that you can stay within your innovation budget. You simply license the software and then enjoy unlimited users, unlimited innovation challenges, unlimited communities and more! Finally, we also understand that innovation leaders need to be able to pull charts and KPI results for steering committee meetings and we’ve included those capabilities in this latest version.
Our latest software version comes with all the features you need to effectively manage open innovation ideas and technologies from beginning to end. You can securely connect with people all over the world and safely exchange ideas through a customized portal that reinforces your brand. Use social integration and gamification tools to encourage participation and further engage with innovators and problem solvers. From there, you can easily identify the best solutions and jumpstart the R&D process so that you are able to focus on growth instead of simply trying not to lose ground.
Innovation Budget Planning Components #6
Make sure you allocate funds in your innovation budget to attend one or two conferences throughout the year. These events are a great way to network with other CIO’s and to learn what’s new in the world of innovation. I personally find these conferences inspiring and fulfilling. Networking with others always leads to an opportunity you hadn’t even considered. It also forges alliances, acts as a great recruiting tool and can actually connect you with people who might just help you solve a problem. My personal favorite is FEI Boston, which draws a large and diverse crowd and has wonderful keynotes from thought leaders from around the globe.
Innovation Budget Planning Components #7
Remember to include annual dues, memberships and fees including those you might consider joining in the coming year. My personal favorite is Innovation Leader and Crowd Companies, which focuses on the collaborative economy. These memberships will help with your networking efforts, keep you up-to-date in your industry and increase brand visibility.
Innovation Budget Planning Components #8
Lab Facilites (Use)
If you need lab space, you can partner with large corporate labs that carve out collaborative space for R&D. At Xerox, all of our labs run on their own P&L and allocate 50% of their lab to working with start-ups. Another avenue to consider is working with accelerator labs. These are cropping up all around the globe and provide support to young entrepreneurs.
Innovation Budget Planning Components #9
Sales, Marketing & Commercialization
Depending on what stage your projects are stratified across your pipeline, remember to budget for marketing and commercialization for those may be ready to go to market next year. Work with your marketing and sales department to make sure they are perfectly aligned regarding when and how products will go to market. Also, remember that your sales team will need to be trained on the specifics of new product, so be sure that is included in the budget.
The Ezassi innovation software incorporates a very robust workflow feature that is easy to implement, with a few clicks you can have an automated idea advancer workflow that takes you from the initial review of the idea submission through all stages, including PLM, go-to-market components and more.
Innovation Budget Planning Components #10
Think through what’s unique to your innovation organization and budget considerations and see where you might be able to use interns to fill in gaps. At Xerox, we loved to bring in Interns from higher education institutions, in part, because these PhD and Master level students became a great recruiting tool for us. Consider hiring your own interns next year and set aside some budgetary dollars to bring them on board to work with your R&D team.
While there may be additional key components that are specific to your industry, the ones listed above are fairly universal and will serve you well as you develop your innovation budget. If you do have additional needs, this checklist will serve as a guide to identify and address areas of need within your budget.
Good luck with your innovation budget planning! For additional resources, check out the article “Budgeting for Innovation: Increase ROI2”