Open Service Innovation: Capability Portfolio of Online Intermediaries

Abstract

We integrate service innovation literature with marketing strategy and open innovation thinking to investigate how digital intermediaries facilitate client organizations to innovate their services through the open innovation mechanism of crowdsourcing. Through a longitudinal case study of an online innovation intermediary and its clients, we develop a theoretical framework of the capability portfolio intermediaries deploy in enabling service organizations crowdsource from online customer communities, thus supporting open service innovation. We find that intermediaries cumulatively develop and deploy three capabilities - technological, marketing and co-creation capabilities - to facilitate service organizations in overcoming barriers to implementing open service innovation. Technological and marketing capabilities are developed and deployed right at the start, and help clients overcome project team-level and organizational-level challenges, respectively. Findings show that intermediaries progressively develop and deploy co-creation capabilities. Comprising a portfolio of technology- and market-oriented service capabilities, co-creation capabilities act as a higher-order capability in further enabling open service innovation through two mechanisms. First, through the deployment of client-centric services, co-creation capabilities leverage the intermediaries’ technological and marketing capabilities, thereby amplifying their effectiveness in helping clients deal with identified project-level and organizational barriers to open service innovation. Furthermore, the deployment of co-creation capabilities in intermediaries also enable progressive modifications to technological and marketing capabilities, shifting their very nature to become more relation-focused, in turn leading to better client engagement for open service innovation.