Corporates Identify Start-ups as Key Partners in Post-COVID Response Plans, Says Zinnov
BANGALORE, June 17, 2020 /PRNewswire/ -- Zinnov, a leading global management and strategy consulting firm, released the findings of its impact study titled, 'Impact of COVID-19 on Corporate Start-up Collaboration Programs', today. The study analyzed how COVID-19 has affected corporate start-up collaboration programs in terms of budget allocation, internal stakeholder interest, and the programs' operating model, to sustain on the other side of recovery.
In the pre-COVID era, India witnessed a steady and consistent increase in the number of active corporate start-up collaboration programs. The key driver for this increase was a growing willingness of corporates to leverage open innovation to strengthen their business and access innovative solutions by engaging with cutting-edge technology start-ups. In fact, as of 2019, there were 60+ corporate start-up collaboration programs in India, with a majority of them being incepted in the period between 2015 and 2018 alone. Among these, 25% of them are focused on the BFSI sector, with HiTech vertical coming in second at 18% and the Energy sector rounding out the third spot at 14%.
One thing that has been consistent across both pre- and post-COVID corporate action plans, is the clear and present need for corporates to leverage the external innovation ecosystem. Some of the key attributes that are a part of every post-COVID action plan include technology-first, innovation-driven, agile, nimble, as well as frugal and efficient solutions. Since start-ups fulfill all these criteria, it becomes all the more critical for corporates to engage with cutting-edge start-ups through structured programs.
Zinnov's analysis also revealed that although the pandemic has affected nearly every industry vertical, structured corporate start-up collaboration programs with high maturity have witnessed only a negligible to moderate impact. About 45% of structured programs - mainly with low maturity - have reported a reduction in their budget and around 80% of program leaders are embracing a wait-and-watch approach. Further, 25% of programs intend to reduce the number of start-ups engaged per year, with a goal to have fewer but deeper engagements, while nerly 65% intend to either maintain status quo or reduce external partnerships to conserve cash.
The study highlighted that nearly 80% of leaders believe that COVID-19 has presented a definitive opportunity to add tangible value to the organization through structured corporate start-up collaboration programs. Potential opportunities that these collaboration programs can explore include expanding program scope to new products, collaborating with global start-ups from India, and engaging with stakeholders in overseas markets. However, these programs need to overcome major challenges in the wake of COVID-19 like reduced internal stakeholder participation, increased expectations from all involved stakeholders, decreased resource allocation, difficulty articulating direct business impact, and absence of remote work capabilities, giving rise to issues pertaining to cybersecurity, access to facilities, data security, risk and compliance.
To capitalize on the opportunities, corporate start-up collaboration programs are revisiting their operating models. The programs are being reconfigured to optimize the spend without sacrificing the strong value proposition for start-ups to build cost-neutral programs. Further, the corporates are realigning the programs at an objective, charter, focus areas, and KPIs level to reflect organizational priorities post COVID-19. Program processes are also being redesigned to factor in remote work conditions with minimal in-person interactions and capabilities.
Speaking about the impact study, Atit Danak, Principal & Head of Zinnov CoNXT, said, "COVID-19 has re-emphasized the need for corporates to explore open innovation through structured programs. However, 90% of the programs are not proactively pivoting their core operating models to align with the post-pandemic reality. It is critical for corporates to revisit start-up collaboration program operating models, especially for low maturity programs, to derive real value in the new normal. And Zinnov's 5-step approach, comprising of Reconfigure, Realign, Redesign, Rebuild, and Reimagine is a derivative of our hands-on experience, and will help ensure that corporates are able to engage with start-ups effectively and drive tangible business outcomes, even with a reduced budget."
Founded in 2002, Zinnov is a leading global management and strategy consulting firm, with presence in Santa Clara, Houston, Bangalore, Gurgaon, and Paris. Over the last 18 years, Zinnov has successfully consulted with 250+ Fortune 500 enterprises and technology companies to develop actionable insights that help them create value - across dimensions of both revenue and optimization. With core expertise in Product Engineering, Digital Transformation, Innovation, and Outsourcing Advisory, Zinnov assists clients by:
With their team of experienced consultants, subject matter experts, and research professionals, Zinnov serves clients from across multiple industry verticals including Enterprise Software, BFSI, Healthcare, Automotive, Retail, and Telecom in the US, Europe, Japan, and India.
For more information, visit http://zinnov.com.
About Zinnov CoNXT
Zinnov's open innovation practice, CoNXT, enables corporates to build effective start-up collaborations to drive tangible business impact. The practice executes a variety of corporate mandates ranging from investments, acquisitions, acqui-hiring, and commercial partnerships.
Zinnov CoNXT specializes in building customized corporate start-up collaboration programs (e.g., Cisco Launchpad, GE Healthcare Edison[X], NetApp Excellerator) and scaling them to consistently deliver clear and definitive value.
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