A blog I wrote yesterday about how Taiwan Semiconductor Company has established a formal Open Innovation Platform with its customers has had me thinking all night (dangerous, I know).

While the cynical could legitimately argue that there's nothing new here - rather, it's a formalised version of relationships that have existed for some time - the problem comes when you try to analyse the ownership of the work that is being done in these loosely organised "networks". 

News today that Intel and Nokia are joining forces to work on a next generation of mobile architecture, further illustrates how large organisations are seeing the potential of collaboration on product development and how they are going to some effort to formalise the arrangements so that intellectual property rights do not become an issue. 

However, formalised arrangements are still in the vast minority and, assuming that developing informal innovation networks is a valid - read vital - component of business, whose job is it to maintain them and ensure they deliver?

Most would argue that it's the responsibility of the product division head to control these networks. After all, he or she has the overall ownership of the item being developed. But, that in itself brings a fair amount of constraint (innovations rejected because they don't match product roadmaps, certain suppliers ignored because they aren't historic partners just for starters...) 

A SAP-sponsored report Integrated Product Development put together by analyst IDC last year argues that the product division head should be the ultimate owner of the process. Happily, it also puts procurement in a particularly advanced position - alongside R&D. But is this enough?

Should procurement, considering its role in supplier relationship management, have an equal responsibility to the product division head? Should the CIO be equally involved? 

It's a difficult puzzle to solve. There's a huge amount of untapped potential residing in the boundaries between companies. That area where sales meet procurement, suppliers' product design meet buyers' product development - a grey area of the knowledge economy which noone can really lay claim to but which is responsible for huge amounts of value. 

SAP itself, along with many other software companies, have recognised this - designing software to control this intangible universe of knowledge and innovation. There's even a Wikipedia entry - Collaborative Product Development - which tries to get to the bottom of it (it's a relatively new entry, admittedly, with much more input needed). 

While a night of thinking has certainly not provided me with the answers, it's definitely prompted many questions. And one of the starkest is whether procurement (perhaps we should call it supply management for the purpose of this) can play a more active role. 

Speaking to Rob Hemsley, European procurement director at Heinz, last year, he said that collaboration with a supplier led Heinz to launch a new type of plastic bottle (much more attractive packaging, which makes the product stand out). Who own's that  innovation? Heinz or the supplier? Does the supplier take a cut of any increased sales? Should it? Who owns the process, procurement or packaging? 

In another conversation, more recently, with Erik Dam at Scotts Miracle Gro, we discussed original design manufacturers, and the place they have. The idea is simple, in return for designing product that the buying company goes on to sell, the supplier gets the business. IP belongs to the buyer, regardless of development being carried out by the supplier. Is this a valid approach? Would there be improved innovation through collaboration? Should IP ownership be shared? Surely if both (or all) organisations are set to benefit from the success of a product's development, better products will be developed, won't they? 

It's a huge area full of quandries and conflicts - but one if correctly harnessed could provide the foundation for the next great leap forward in business. Procurement must make sure it makes its presence felt...