Negative side effects of customer integration

Abstract

Customer integration has many recognised advantages, but also entails negative side effects that may impair the success of innovative activities. These negative side effects have not yet been sufficiently investigated. Whereas some may occur within the entire early innovation phase, others are likely to affect only few sub-phases. Each sub-phase, defined in a slightly new way as compared with existing models to meet the investigation subject, has different activities and aims, and therefore requires special integration methods and customer types. On the basis of extensive research and empirical studies, the paper illustrates different integration methods, negative effects of customer integration, and measures to avoid them.

Protection of Customers’ and Suppliers’ Knowledge in Software Development Projects with Fixed-Price Contract: Using Property Rights Theory

“…In order to make possible such decisions, the supplier must share the information in a way that the customer can generate knowledge regarding the underlying technical facts, methods, and constraints. This knowledge is worthy of protection for the supplier, because the generation of such knowledge makes the customer more independent from the supplier's services [35]. Furthermore, the customer may use this knowledge in other projects and may share it with the supplier's competitors [36].…”

Management of the Fuzzy Front End of Innovation

“…Central elements of the lead user process are the identification of relevant trends, the identification of appropriate lead users as regards these trends, and workshop sessions with lead users for the purpose of developing or refining ideas and product concepts. Although lead users were found to contribute to innovations in several industries (e.g., outdoor sports equipment, medical equipment, open source software), their integration may entail negative effects, such as developing innovations that serve only a niche market (Gassmann et al 2010a). …”

“…Pyramiding has proven an effective method to find such lead users ), along with self-selection procedures such as crowdsourcing mechanisms (Piller and Walcher 2006). In practice, B2B companies often use important current customers as lead users and then wonder why these customers do not provide the information they have actually been looking for (Gassmann et al 2010a).…”

“…Yet the company pursues such projects, as art and culture are important corner posts in the company's culture, and because they elicit positive publicity and image effects. Criteria for selecting architects as strategic partners include innovativeness, high standards of quality, and a track record of top-end building experience (Gassmann et al 2010a). …”

New Business Models and Value Creation: A Service Science Perspective

“…Firms may obtain some benefits from the participation of end-users in the innovation process. Despite these benefits, integrating users in the innovation process can be a challenging task involving transaction and agency costs related to opportunist behaviours of users, causing inefficient product development or excessive orientation towards niche markets … (Athaide and Stump 1999;Brockhoff 2003;Jeppesen 2005;Alam 2006;Gassman et al 2010). Despite these benefits, integrating users in the innovation process can be a challenging task involving transaction and agency costs related to opportunist behaviours of users, causing inefficient product development or excessive orientation towards niche markets … (Athaide and Stump 1999;Brockhoff 2003;Jeppesen 2005;Alam 2006;Gassman et al 2010).…”