Organising innovation in services: The case of telecommunications next generation networks (NGN)

This paper analyzes how innovation in services is being organised in the telecommunication industry after the bubble burst in the beginning of the 2000’s and how BT is applying the concept of ‘open innovation’ in order to sustain its competitiveness. The IP (Internet Protocol) has become an unprecedented agreement in the telecommunications industry for the transformation of its traditional PSTN (Public Switched Telecommunications Network) infrastructure. While this infrastructure transformation is under way, another huge challenge is service innovation: to change the way the traditional telecommunications operators create, integrate and deliver new services. Initial findings suggest that incumbent telecommunications firms will be increasingly extracting value from platform and software sharing, exposing its ‘capabilities’ to third parties and developing business models to interoperate with other companies. Thus, the ability to expose their capabilities in services, not to hide them, will be determinant of its success. And, in this context, the concept of open innovation and value innovation also find a fertile ground to be applied in services in the communication industry. Important dynamic capabilities identified in this context are strategic planning, project management, new product/service development (especially software development), supported by systems integration.