Just recently, coMakeIT and the ICT Update magazine carried out their yearly benchmark survey amongst Independent Software Vendors. Through their report, it was quickly concluded that achieving growth was one of the most important goals of the ISVs. The results aren’t really that surprising considering that the market and customer behaviors are constantly evolving. The only way for a business to grow, no matter what its size, is through innovation. The risks associated with not innovating are pretty clear: losing market share to competitors, declining profit margins, productivity and efficiency going haywire and losing talented employees that are looking to work on innovative projects.
And therefore, it is imperative that innovation become an indispensable part of the business strategy of any ISV. In this post, I have listed my top five reasons for an ISV to innovate:
- Competitive edge: It gives you an edge over your competitors! In the cut-throat market that most ISV businesses now operate in, your customers are not just looking to get their needs met but they want to know how engaging with you is going to give them an advantage over your competitors. To truly stand out, you have to be able to constantly and successfully implement new and efficient ideas so that you can bring new or improved products and services to the market.
- Increase your brand value: Through innovation, you can build the value of your brand. This is important for multiple reasons. Yes, you want to be known in your industry as the company that never fails to work on becoming better and better. But also because, if you truly want to make an impact, you have to be able to attract innovative talent for which you have to be a company that seeks to grow through giving growth opportunities to its talent force.
- Resilience to market trends: The reason most companies fail is because once they’ve reached a certain degree of success, they assume they can remain that way by using the same old formula for success constantly. But truth is, there is constant flux and shifts occurring in the corporate market and customers want to know that you are on top of your game. As the often repeated quote goes, customers don’t know what they want. It’s your job to figure that out. You have to position yourself to be able to gauge problems or wants that the customer may face not just now, but also well into the future and work towards a solution to resolve them speedily.
- Efficiency: Just as mentioned earlier, well thought-out innovation can help improve business processes which directly impacts productivity and also reduce costs. Through implementing fresh and relevant ideas and extending the range or quality of existing products and/or services, a company can increase turnover and improve profitability
- Sustainable market leadership: The goal of any ISV business should be to become and remain a market leader. This requires constant rethinking and innovation. It isn’t enough to be just the first entrant into the marketplace, but it’s also highly crucial that you cannibalize your own sales eventually and monopolize the market. Just remember, market share reduces as the number of competitors increase. This is why, an early win is really important for you.
By making innovation a crucial part of your business strategy, you are giving yourself a fighting chance to place your company in a strategically viable spot. As long as you are doing your market research and monitoring trends in your specific industry, you will know just which areas to focus your innovation efforts on. So what are you waiting for? Start getting your thinking caps on!
If you are an ISV or a service provider that wants to innovate but are faced with challenges such as a lack of experienced talent, issues with quality assurance, technology complexities and so on that make it difficult to execute your business plan, perhaps you would like to consider offshoring. We are offering you a free book giving you access to best practices for quality software offshoring.