Title: Extreme customer innovation in the front-end: learning from a new software paradigm

Authors: Oliver Gassmann, Patricia Sandmeier, Christoph H. Wecht

Addresses: Institute of Technology Management, University of St. Gallen, Dufourstrasse, 40a, 9000 St. Gallen, Switzerland. ' Institute of Technology Management, University of St. Gallen, Dufourstrasse, 40a, 9000 St. Gallen, Switzerland. ' Institute of Technology Management, University of St. Gallen, Dufourstrasse, 40a, 9000 St. Gallen, Switzerland

Abstract: The front-end phase of the innovation process constitutes up to two-thirds of the total cost of new product development (NPD). In response to the new open innovation paradigm, new ways to integrate customers| knowledge into the innovation front-end must be explored. In an attempt to learn from analogous situations in which the interface between developers and customers has been managed successfully, this article analyses the Extreme Programming (XP) approach of software engineering. Through its iterative but disciplined probe-and-learn cycles, the approach helps companies effectively develop advanced products with the help of their customers. Using case studies from interviews with R&D directors of 20 technology-intensive companies, the applicability of successful practices from XP to traditional NPD is analysed. The authors identify four determinants for front-end management that reside between creativity and resource efficiency. These determinants dictate the potential for front-end effectiveness improvement and enable the maximum amount of knowledge generation and absorption from the customer.

Keywords: innovation process; front-end management; new product development; NPD; open innovation; customer integration; knowledge absorption; extreme programming; XP; probe and learn process; innovation management; software engineering; technology management.

DOI: 10.1504/IJTM.2006.008191

International Journal of Technology Management, 2006 Vol.33 No.1, pp.46 - 66

Published online: 22 Nov 2005 *

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