Customised Software Fosters Innovation Success of Service Providers

Firms using customised enterprise software are more innovative than their competitors that are mainly using standardized software. This is the finding of a study conducted by the Centre for European Economic Research (ZEW). The study analysed the impact of standardized software and customised software on the innovation success of service companies.

Enterprisesoftware is differentiated between standardized and customised software and is used for planning, supporting and controlling a firm’s internal processes. Standardized enterprise software is used for processing, storing and generating knowledge as well as editing and presenting information. Moreover, standardized software is essential for services in certain economic sectors. For instance, standardized software is used by architects for architectural drawings or by accountants for filing tax returns.  

Customised enterprise software on the other hand is specifically tailored for the companies’ needs. Customised software provides firms with the possibility to include their long-term experience and the obtained knowledge in the development of the software, thus optimizing it for the firms’ requirements.

The ZEW study indicates that the use of standardized software does not affect the innovation success of firms in the service sector. Using customised software, however, does have a positive impact on the innovation success. When compared to firms that are not using customised software, service providers using customised software are 19 times more likely to introduce an innovation to the market.

"In comparison to standardized enterprise software, customised software supports the innovation activities of firms," says Miruna Sarbu, ZEW researcher. "A reason for this could be that customised software offers firms the possibility to actively participate in the development of the software, thus establishing their own IT knowledge. This helps firms to optimize their time management and internal processes, hence freeing up resources that could be used for developing new innovative services."

The study is based on data collected in the survey among service providers of the information society, which is conducted on a regular basis by ZEW in cooperation with Creditreform. The service providers of the information society include firms in the ICT service sector, like software, IT-specialised trade and telecommunications companies, as well as knowledge-intensive service providers, like tax consultancies, accounting and advertising companies. In total, the study analysed information on 335 firms.

For further information please contact

Miruna Sarbu, Phone +49 621/1235-334, E-mail sarbu@zew.de

Benjamin Engelstätter, Phone +49 621/1235-134, E-mail engelstaetter@zew.de