Innovation as a service: How to choose the right IaaS partner

If you’re looking for an innovation as a services (IaaS) provider to partner with, you may be in the following situations: 

• You may be under pressure to innovate quickly. Yet, if you’re executing your innovation strategy in house, it takes time to source the talent with the right methods and experience.
• You may not have the specific expertise in-house that you need to innovate. This often happens if you don’t have an internal culture of innovation or research and development.
• You may not yet have a strategy for innovation. You may be new to innovation and implementing new technology, and are looking for some outside help on where to start. 

IaaS involves outsourcing part of your innovation needs to experts, allowing you to instead focus on what you do best. However, IaaS comes in many different forms, and not every option will be the right fit for every company. 

Before I founded Tenity, I led innovation programmes at SIX, the Swiss Stock Exchange. Now, at Tenity, we help corporates build and execute their innovation strategy. For instance, we’ve supported UBS, Julius Baer, and SIX to learn about, collaborate with, and invest in startups that can help them solve their unique problems. 

In this guide, I’ll explore: 

• What is innovation as a service?
• How to choose the right IaaS partner to work with
• Why work with Tenity as an innovation as a service provider?
• How the Swiss Stock Exchange worked with an IaaS partner to offer a climate solution to their clients

Looking to partner with an IaaS provider that specialises in financial services? Reach out to us to see how we can help. 

What is innovation as a service?

There are two main ways for corporates to innovate:

1. You can build an innovation team in-house and execute the whole innovation process yourself. This gives you control over every part of the innovation lifecycle, from strategy to implementation. However, it takes time to hire the right talent and execute.
   
   
2. You can work with an IaaS partner to support you with certain parts of the innovation process. This allows you to start innovating much more quickly, as you don’t need to build an in-house team, and it lets you maintain your focus on your expertise. However, they may not be as closely tied to your business strategy as someone in-house.

Innovation as a service—the second option here—involves partnering with external innovation expertise that can ideate, develop solutions and technology, test them, and bring them to market. 

Typically, only the very largest corporations have the resources to manage the entire innovation lifecycle in-house. That’s why IaaS often makes sense for smaller corporates, allowing them to innovate immediately without building a dedicated in-house team. 

However, not all IaaS providers perform the same tasks within the innovation process. Next, I break down the specific IaaS that are available to corporates. 

How to choose the right IaaS partner to work with

Every corporate will have different needs and will be at different stages of the innovation cycle, so you want an IaaS provider that is a good fit for you. 

Here are the 4 main types of IaaS partner you can work with.

The 4 types of IaaS partners

1. Consulting firms

Whether smaller organisations or the “Big Four”—i.e. KPMG, Deloitte, Ernst & Young, and PwC—consultancies are one choice for corporates looking specifically for support with putting together an innovation strategy.

Typically, these companies specialise in strategy and can provide bigger-picture approaches to innovation. They can help you to assess your priorities and identify opportunities and threats, or teach you particular innovation methodologies such as design thinking.

While they have their dedicated innovation teams, they typically don’t have specific expertise in any particular vertical. They are also unlikely to have experience building products and executing an innovation strategy. That means that, alongside these consultancies, you’ll need to work with other partners with the skills and ideas you need to help with execution.

Overall, this makes these consultancies a good choice if you’re looking to build a new innovation strategy and are at the very beginning of your innovation journey, for example in response to market disruption, or if you need to find a new avenue for growth. 

2. Open innovation platforms

Another option for corporates is to use open innovation platforms that can connect you to startups that will help execute your strategy. For example, you can use these spaces to link up with a startup that can help you solve a particular problem.

Typically, innovation platforms are a lower cost option, as you’ll need to do a lot of the work yourself. Most notably, the platforms usually won’t include an innovation-scouting service, which provides assistance to help you find the right match for your needs.

That means you’ll need to understand the solution you’re looking for and put the time in to find the right startup yourself. Unless you have some understanding of the startup landscape already, this can be a risk, as you’ll need to trust that your partner will get results. 

Overall, open innovation platforms are a good choice if you already have an innovation strategy and you just require the specific expertise to execute on that strategy.

Read more about startup scouting here: Startup scouting: What's the right way to do it?

3. Research and technology institutions

This is a longer-term option. Rather than hiring talent that can solve immediate innovation needs, corporates can invest in research and development to produce ideas that can later be commercialised. 

In practice, this would involve sponsoring doctoral programmes or research projects. Then, in return, you would receive exclusive access to intellectual property that can then be taken to market and give you a competitive edge on your product.

This way, your company can demonstrate industry leadership and ensure you’re producing fresh ideas. However, it’s a very expensive option, and it won’t produce immediate returns. 

As such, it’s a good choice if you’re horizon-free and looking for innovation without any deadlines. For instance, if you operate in the tech industry where product development is an enduring priority, this option can help you differentiate in the long term.

4. Startup incubators

A final option for corporates is to collaborate with startup incubators such as Tenity. This means partnering with a company that runs startup incubators, either independently or on behalf of the corporate. 

These startup incubators already have the reputation and network to attract the best startups in the industry. They also do all the legwork to scout the startups, run masterclasses and organise the whole program.

By working with external startup incubators, corporates can leverage an external industry network and build relationships that can benefit them in the long-term. Tenity, for example, specialises in startups in the financial services sector, and can support corporates to learn about, collaborate with, and invest in these fast-growing companies. 

Overall, all corporates can benefit from working with startup incubators. For instance, if you’ve not yet built your innovation strategy, you can still gain exposure to startups that are solving problems in your vertical. Or if you’re ready to invest in businesses, this is an opportunity to do that too.

Learn more: How to execute a corporate incubator strategy

What factors to consider when choosing an IaaS partner 

As I’ve mentioned, not all of these IaaS partners will be appropriate for every corporate and business model. And within each option, there are nuances you’ll need to be aware of. For example, the specific service they offer will differ, as well as the corporates they work with. 

As such, consider these questions when choosing an innovation as a service partner:

• Do you need support putting together your innovation strategy? If you’re still at the beginning of your innovation journey, then you’ll want to partner with an IaaS partner that leads on strategy. That could be either a consultancy, or a startup specialist like Tenity that also provides strategic guidance.
  
  
• How mature is your company with regards to innovation? What types of innovation expertise and resources do you have already in-house? Do you have strategic talent, or a team that can develop new products, test them, and bring them to market? It may make sense to only outsource the functions that you’re lacking—such as industry-specific product development expertise. Alternatively, if you're at a very early stage, you may need external guidance throughout the whole innovation lifecycle.
  
  
• What budget and resources do you have at your disposal? How much are you able to invest to bring in the right expertise or to develop an innovation strategy? Crucially, what are the risks of not making that investment? If your budget is tight, consider what new services are a priority.
  
  
• What timeline are you looking at? Are you eager for fast results, or is your product innovation strategy horizon-free? For instance, if you want to create a product that can get to market quickly, then finding specific solutions via an innovation platform may be the best choice. If there’s no pressure for quick results, however, you may benefit from longer-term investment with a research and development partner.
  
  
• What type of external expertise are you looking for? For example, a consultancy may be methodology-oriented, but they may not have first-hand knowledge of your sector. If you’re looking for execution support in the financial services industry, you’ll want an IaaS partner that has an understanding of the regulation, network, and activity in your industry. 

I’ll now explain why and what type of corporates work well with what we do at Tenity.

Why work with Tenity as an innovation as a service provider?

At Tenity, we were born out of corporate innovation in the financial industry. That gives us the experience, know-how, and network to help financial corporates to design and implement an impactful innovation strategy. 

Here are 3 specific ways you can benefit from working with us.

You get an innovation program that’s bespoke to your needs

It’s very hard to put us in just one box at Tenity. We don’t provide a one-size-fits-all service offering for corporates. Instead, we help you work out the right innovation management system for you. Whether you’re still putting together your digital transformation strategy, actively looking for startups or needing help measure the success of your efforts, we can support you. 

If you work with a consulting firm, ultimately you’ll only get consulting. But at Tenity, we work together with you to find the right combination of tools for your situation. Our three-stage process is completely adaptable to the position you’re in:

1. Learn. Firstly, we’ll provide you with the resources and the network to help you learn about innovation. You’ll gain exposure to the startup ecosystem and the solutions they’re working on, through community and executive events, conferences, and our startup database.
   
   
2. Collaborate. Whenever you’re ready, we can help you collaborate directly with startups, either by participating in our incubator programmes at Tenity or by letting us organise accelerator events for you.
   
   
3. Invest. Finally, we help you invest in startups. You can either invest via our early-stage fintech fund or directly into startups themselves. We can also help guide your innovation and investment strategy, and offer advice on startup acquisition. 

Before all this, whenever we start working with a corporate, we first spend the required time at the conception and ideation phase. This involves understanding what your specific innovation needs are, as well developing a thesis to help you define the structure of your programme. 

Then, we’ll take care of setting up the startup accelerator in its entirety. We’ll scout for relevant startups, organise masterclasses and cocreation workshops, and handle all of the organisation. This way, you’ll have an accelerator built for you, without having to deal with the day-to-day management of the programme.

Learn about the incubator we built for Julius Baer: Julius Baer Global Web 3.0 Program

You partner with someone who understands financial services inside out

We only work with startups in the financial sector. This puts us in a unique position to provide the best knowledge and people to support your innovation. It also means we can provide realistic innovation that’s feasible in the context of local regulation.

As I mentioned earlier, Tenity started out as an innovation initiative at SIX, the Swiss Stock Exchange, and that’s given us first-hand experience of corporate innovation. We’ve experienced the challenges of building a culture of innovation, and, after over 100 collaborations, we know what successful innovation looks like. 

Our industry specialism has helped us to build a robust ecosystem of industry-specific partners and professionals, including:

• 200+ mentors in fintech who can share their industry knowledge
• 270 startups that have graduated from our programs
• Proprietary database of over 2,000+ fintech companies
• 2,500+ startup applications that are fintech-only.

When it comes to setting up fintech startup accelerators, we’ve run 150+ accelerators since 2015, with a total of 1600 startups having graduated from our programs. 

By working with Tenity, you can benefit from this finance-specific network, to partner with whichever skills you need. 

You work with someone who has skin in the game

With other IaaS providers, you may receive help with ideas but they typically don’t play a role in the execution. That means that they may not know the challenges and the risks involved.

At Tenity, alongside being an innovation partner, we’re also an investor. Whenever a startup joins one of our incubators in select countries, we exchange a certain investment for a share of their startup which is then part of our investment fund. Our corporate partners can then choose to invest in this fund, involving over 300 startups, and receive a financial as well as strategic ROI. 

We've also done follow-on investments alongside our corporate partners with many of the startups in our program. One example is PXL Vision which graduated from our program in 2019 and received a CHF 4.6m seed round in 2020 from SIX Fintech Ventures, one of our partners. Since then, PXL Vision has become a leader in automated identity verification in Switzerland.

How the Swiss Stock Exchange worked with an IaaS partner to offer a climate solution to their clients

Since we went independent in 2018, we’ve continued working closely with SIX, the Swiss Stock Exchange, and we remain their go-to partner for innovation. Part of that partnership has seen us help them collaborate with the climate fintech Deedster to bring an innovative CO2 footprint calculator to market.

bLink is SIX’s open banking platform, developed to connect banks with fintech companies in Switzerland. The platform helps banks to access innovative products, such as accounts or wealth management solutions, which they bring to their own clients via API-based services. 

In particular, bLink was interested in exploring ESG-related innovative solutions. As part of our partnership, we helped them scout for startups for a potential collaboration. When Deedster, a Swedish climate fintech, joined our startup program, bLink was able to get to know them and explore working together.  

After a pitch event and exploration of use cases, the two companies partnered and put together a successful proof of concept with anonymised data. 

Fast forward to today, and the two entities are still working together. Banks in Switzerland that are part of SIX can offer Deedster’s climate solution to their clients, and Deedster now works with clients across the globe. 

The partnership between SIX bLink and Deedster is a great example of SIX working with an IaaS provider (Tenity) to enable innovation. By joining our ecosystem, we were able to help them put together a strategy, decide on which startups to search for and then facilitate a partnership—all while ensuring the startup is also ready to execute on this sort of partnership.

IaaS: A great tool for corporates to innovate

There are many ways for corporates to benefit from outsourced innovation expertise. But as I’ve explored in this article, the right partner depends on what stage you are at in the innovation cycle, the maturity of your company, and your innovation strategy.

If you’re a corporate in the finance space, choose an IaaS provider like Tenity that specialises in finance. Whatever stage in the innovation lifecycle you’re at—whether you want to explore the finance ecosystem, or you’re ready to invest—we can help. 

Reach out to us to find out more.