Global spending on research and development among the world’s top 1000 public corporations reached a record high of $638 billion in 2013, according to Booz & Company’s 2013 Global Innovation 1000 study. Higher R&D spending, however, did not necessarily equate to the highest ROI for companies that invest the most in R&D. Booz & Company’s study found that their top 10 most innovative companies outperformed the top 10 spenders on R&D on both five-year revenue and market-cap growth averages.
Companies today need to be at their best as they conceive and launch new software products into the marketplace for consumers or constituents. Ongoing product innovation is becoming a focal point for companies looking to build or protect their businesses by extending beyond their traditional product lines or industry verticals. One way to ultimately save time and money on new product ideas is to quickly test assumptions with potential users via rapid prototyping.
In an ideal world, no enterprise would want to outsource any business function, much less their own software product development. Today, however, enterprises are no longer living in a ‘know-it-all, do-it-all’ cocoon. They are expanding their horizons and looking beyond the periphery of their own organizations to forge strategic partnerships when it comes to product development.
The emergence of what Forrester calls the Product Development Services 2.0 space is happening for a number of reasons.