Ask most executives whether their organisation is good at finding new technology for their pressing needs, and they will say yes. Ask them to walk you through the actual process the last time they dåid it, and the answer often gets vaguer fast.
It is surprising how many companies, including some with real innovation budgets and genuine ambition, still struggle to scout efficiently and effectively critical new technology in any structured way. It is not unusual to still see organizations go with whoever answered the phone first, or whichever vendor happened to be at the last industry conference, or a “mate who knows someone”.
This gap is not for lack of appetite. A Capgemini survey of a thousand large organisations found that three quarters consider open innovation critical to solving complex business problems, and PwC has separately reported that around six in ten companies now lean on it rather than in-house R&D alone.
The interest and strategic importance is substantial but what is often missing is the use of a robust, nuanced, specific methodology behind it.
In the past 20 years myself and my teams worked directly with more than eighty organisations (either internally or as client), with global corporates, non-profits, and public sector bodies among them, helping them source, invest in and deploy new technology.
The good news is that there are strong, well tested methodologies and best practices for doing this properly. The bad news is that they are rarely used, because most people assume new technology scouting is common sense rather than a discipline with its own tools.
Here are a few of the core ones that I covered in my book on industrial innovation.
Describe the outcome, not the product.
“We need computer vision” narrows the field before the process has even started, and tells every vendor exactly which box to tick rather than which problem to solve. “We need to catch a specific defect before it reaches the next production stage without slowing throughput” does something different. It keeps the field open to solutions nobody on the team had considered, sometimes ones that do not resemble what was originally pictured at all.
One of the best tools for doing this properly is sometimes called a sourcing brief or a challenge statement in innovation speak but it is really nothing exotic: anyone who has written a specification, an ITT, or a standard procurement brief already knows the shape of it: context, requirement, constraints. But it is surprising how many times organizations over or under do it, or miss this step altogether for highly innovative solutions. The key nuance, when scouting for something genuinely new (esp. for the organization) is that there is much uncertainty, and it often pays to keep a brief relatively loose and use the due diligence stages to refine and learn.
Know your position in the market before choosing how to search.
Organisations that overestimate their “pull” may design a search process around the expectation that vendors will simply arrive, then wonder why the responses are thin and generic. Organisations that underestimate it swing the other way, spending unnecessary time and money on intermediaries and outreach when a straightforward internal process would have worked just as well. Either mistake wastes months before the real evaluation has even begun.
In my experience, two key things determine where an organization actually sit: a) how narrow or specialised the technology is, and b) how attractive the organisation genuinely looks to the vendors in the target tech market(s), as opposed to how attractive it assumes to be. Plotting those two against each other and four distinct scenarios emerge, calling for different strategies (see diagram below extracted from my book)
Choose the sourcing model with the best fit. Each situation calls for a different sourcing model and tools, and organisations that only ever use for one, or the wrong one!, may experience misfires (delays, cost overruns, poor choices of vendors, etc.) or leave the best options to their competitors. These are the most common ones:
- Off-the-shelf procurement is the right call when the technology is mature and several proven vendors already exist. It is fast and low risk, but the downside is that it is unlikely to surface anything genuinely new or with the right fit.
- Internal scouting keeps the search close to the people who understand the operational reality, and builds institutional knowledge over successive searches. Its weakness is that it can be slow, or a team may find only what it already knows how to look for.
- External specialists, consultancies or dedicated sourcing firms, bring market breadth and vendor networks an internal team usually lacks. These can be useful when speed matters or the landscape is unfamiliar, though relying on them permanently means an organizations never build the experience or capability.
- Open innovation challenges publish the problem to the wider market and invite responses, deliberately reaching earlier stage companies that would never show up in a conventional vendor database. To be run well, they take often more effort than one thinks, and external outreach is key, something not all innovation or tech teams are experienced in. But they are often the best route into a genuinely narrow, low visibility market.
And, needless say, scouting like a pro today means accepting and embracing that AI is disrupting everything in this process, from developing sourcing brief, surfacing long list candidates from adjacent industries, speeding up due diligence on vendor claims, and much more. It does not replace judgement, niche and organization specific expert knowledge, development of internal buy-in or trusted external relationships, and many more “soft” aspects of the process. But it is proving hugely disruptive in terms of cost, skills required, time-to-selection, decision on using external open innovation partners vs in house, and more. I will cover much more on this in a separate article.
Sourcing is typically just one stage in a wider innovation methodology, running from selecting the right use case through structured assessment, piloting, and scaling. But it often a critical one to get right in order for innovation to deliver business outcomes.
DM me to compare notes, visit us on www.exenem.com or find out more in my industrial innovation book, available on Amazon: https://www.amazon.co.uk/dp/B0H1XYFWYW