Many software companies fail to clearly define their innovation strategies. This is a major failing as they are not explicitly spelling out how research and engineering work can be combined to produce new product ranges.
The starting point with any innovation strategy is establishing a research team. These individuals may be embedded within engineering groups especially in smaller companies. The important element is that they have enough time to research new product concepts as well as what cutting-edge technologies are being made available that can be used in your product range. These researchers then need to prototype or flesh out these ideas to establish an initial value. Larger companies will have huge budgets for this type of research work which can even incorporate the possibility of takeover strategies when considering technologies being created by small startups.
Research work does however have to line itself up to your own software development lifecycles. This is critical since you want to make sure you have a constant stream of new ideas being channels into the new product ranges and product features. This requires careful project management and hiring of staff are necessary to ensure the stream of good quality innovative ideas are being produced. Many software companies develop products in quite short life cycles (anything from 3 to 12 months). Consequently, the needs to extensive amount of research being done into what future technologies could be useful as well as what business growth strategies the company should be considering.
The final element required of all innovation strategies is proper communication. This includes the communication of ideas from research groups into engineering. Smaller companies will be able to do this much easier as your research individuals will probably already be working within engineering teams. Larger companies need to explicitly defined indication channels, architecture board’s and set up meetings to ensure prototype ideas are specified, documented and handed over to your engineering group.