Innovation management

Innovation cycles are getting shorter and shorter. As a result, we must be agile and flexible in how we manage and budget our innovation projects. We orient ourselves to best-practice approaches used by innovative startups and successful companies, and to the latest findings from research and academia.

PORTFOLIO AND INNOVATION BOARD

Established 2013, the Portfolio & Innovation Board (PIB) plays a central role in managing our innovations. It ensures that we prioritize correctly by identifying and selecting key areas of innovation for our Group and deciding on the method of implementation. Our efforts are guided primarily by the four innovation areas and we create full transparency across the Group regarding our investments in innovation.

CORPORATE INNOVATION FUND

Our Corporate Innovation Fund (CIF) is managed centrally by the PIB. Similar to a venture capital approach, the CIF offers all business and product ideas generated within the Group a flexible and results-oriented form of funding for a specific project phase. The provision of additional innovation budget allows us, for example, to fund new innovation projects at short notice and with little red tape. Such financing is granted independently of annual planning periods, and therefore intensifies our focus on market and customer requirements. Innovation can take place anywhere across Deutsche Telekom, as long as the proposed business and product ideas fit within our Group’s central innovation focuses.

For example, in the reporting year, the Corporate Innovation Fund (CIF) funded the startup and financing phase of the Paketchef solution. Paketchef targets the last mile of parcel delivery services by giving the customer the freedom to choose when and where they receive their parcels. Our Group-internal entrepreneurs’ platform UQBATE (www.uqbate.com) also supported this project. Paketchef is thus a good example of successful corporate entrepreneurship and was singled out as the second-best corporate startup at the Corporate Startup Summit & Award in November 2017. 13

INVESTMENT COMMITTEE FOR THE 4+1 TOPICS

We established the Investment Committee to speed up investment decisions on our 4+1 areas of innovation. Its objective is to act like an (internal) venture capitalist. The Investment Committee allocates funding according to success, orienting itself to the startup industry and the venture-capitalist approach of tying funding to the achievement of key milestones. This gives us the flexibility we need when developing innovation topics and focuses efforts on success. Funding is only made available for the next project phase when specific outcomes that are relevant to our customers are achieved.

The deciding factor for us is always that our ideas and innovations are developed closely in line with the demands of our customers from the very start. Projects that become less promising over time are stopped immediately.