Innovation sourcing is a top organizational goal for leading organizations. The process is different from traditional sourcing, definitions of innovation sourcing vary and the skills needed cross functions. As the ordinary becomes more automated innovation sourcing may even replace cost as the top Purchasing priority by 2020

1. Innovation Acquisition
Top Purchasing Organizations, “Have a Defined Role in bringing innovation
into the company, which is a key driver of enterprise value”
IBM Institute for Business Value and Economist Intelligence Unit Survey
Sourcing Innovation is more important than ever but is different than
traditional goods and services purchasing
Bill Kohnen Jan 2015

2. Summary
• Innovation Sourcing is a high priority for
leading organizations
• The process is different than traditional
materials and services purchasing
• Measures of success for innovation sourcing
are different than traditional sourcing
• As the ordinary becomes more automated
innovation sourcing may even replace cost as
the top Purchasing priority by 2020
Bill Kohnen Jan 2015

3. Leading Organizations Make Innovation Sourcing
a Priority
Bill Kohnen Jan 2015

4. Traditional Sourcing vs Innovation Sourcing
Traditional Material and Service
• Defined Requirement
• Historical data for
comparison
• Cost measurable
• More know sources
• Established process for
business relationships
• Internal Stakeholders have
“framework” for process
Innovation Sourcing
• Concepts and Needs
• New for Buyer
Organizations
• Cost not clear
• Consideration of new
sources
• New relationships and
business terms
• No existing internal
framework
Bill Kohnen Jan 2015

5. Google “Innovation Process” and You
Get Hundreds of Different Options
• Need
• Concept
• Exploration
• Develop Ideas
• Test Ideas
• Develop Ideas
• Trial
• Implement
• Adoption and Diffusion
Bill Kohnen Jan 2015

6. Innovation Sourcing includes…
• New Process
• New Products
• New capability
• New Markets
• Can include improvements with existing
products/ services
• Can be with current or new suppliers
Bill Kohnen Jan 2015

7. Steps and Measures
• Less linear and schedule driven than Traditional purchasing or
Strategic Sourcing
• More Collaborative
• Success Measured over longer period of time
• Leading process measures more relevant
• Requires more face to face interaction
• Interaction outside of traditional meetings important (more
seminars, tradeshows, visits, meetings, benchmarking)
Bill Kohnen Jan 2015

8. Innovation becomes an Organizations
Purchasing Priority
• Technology enablers (M2M, Cloud, SaaS, Mobile)
with fully automate the ordinary purchasing and
supply chain activities or place tactical decision
making in the hands of requestors
• Even “higher level activities” such as Strategic
Sourcing, SRM and Risk Management will see
standardization and delivery of solutions which
increase productivity by 5X to 10X
• Innovation will remain as an area that requires
Human to Human interaction
Bill Kohnen Jan 2015

9. Bill Kohnen Jan 2015
Purchasing
Skills
2015
Innovation
Sourcing
Need for
System
Automation
and
Maintenance
Need for
same skills
2020
2020
2020
2015 Purchasing Skills in
Demand will Change
Those that will remain:
• Strategic Sourcing
• Negotiation
• Soft Skill
• Market Knowledge
2020 Innovation Sourcing Is
Top Goal Purchasing Goal For
Organizations

10. What Skills Are Needed
• Broader understanding of business
• Base content knowledge in a category but more
importantly ability to learn and develop
knowledge about markets
• Ability to collaborate as a credible partner with
diverse teams such as: highly technical R&D
teams, Marketing, Product Development and
Executive Management
• Comfort Leading projects without a set process,
goals or timeline but still demonstrating real
value to the organization
Bill Kohnen Jan 2015

11. No Particular Department In Most Organizations Today
Is the Clear Choice to Lead Innovation Sourcing
• Tendency is to have this led primarily by
technical people that may have some project
management OJT.
• Most Purchasing Involvement comes late in
the process if at all
• The skills of most in Purchasing today
probably lend themselves more to working on
details of automating the ordinary
Bill Kohnen Jan 2015

12. Summary
• Innovation sourcing is a top organizational goal for leading
organizations
• The process is different from traditional sourcing, definitions of
innovation sourcing vary and the skills needed cross functions.
• The skills of todays Purchasing Professionals can contribute to the
process but are not sufficient to take leadership for Innovation
Sourcing
• Given that Innovation Sourcing will be a top goal for organizations
purchasing professionals should develop capabilities in this space to
enhance their career goals.
Bill Kohnen Jan 2015