UGB269 Innovation Management: Open Innovation Assessment Report

This report delves into the concept of open innovation, examining its role in business and innovation management. It defines open innovation as a blend of internal and external factors that foster a culture of innovation, emphasizing the sharing of information to drive business growth. The report high...Read More

Innovation Management
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Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
OPEN INNOVATION:...............................................................................................................3
BENEFITS OF OPEN INNOVATION:......................................................................................3
Few limitations of the open innovation process..........................................................................5
FINDINGS.......................................................................................................................................7
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INTRODUCTION
Innovation management refers to the process of innovating something new in business
and planning, processing, transforming and managing innovative ideas into action. It is a
systematic procedure of developing new product, services or business models. This framework
allows business to lead market and gain competitive edge. The reason is that is analysis needs
and wants of customer and introduce effective product for satisfying target market. Innovation
management is a necessity for business to sustain with increasing competition in this rapidly
changing global era (Engen and Magnusson, 2018). Organization can apply innovation in several
ways, such as, brain storming, market research, empathy mapping etc. The chosen theme for this
report is assessment of benefits as well as limitation with relevance to open innovation. Open
innovation indicates internal innovation that encounters silo mentality and encourages sharing of
information. This report consists evaluation of managing innovation with detailed methodology.
It further includes explanation of findings and methodology.
MAIN BODY
OPEN INNOVATION:
Open innovation is a combination of internal and external factors to boast the innovation
culture in the market. In other words, open innovation is a business model that promote you to
connect with the external environment so that company can earn more profit from the new start-
up and product opportunities. For example Microsoft, Cisco etc. have 8-10 strategies to
implement in the market. Think companies considering suppliers, start-ups, consumer or
universities for the open innovation ideas. Open innovation seems that it is made for big
organisation but this innovation can be used by every organisation. It can be simple as inviting
trusted supplier to help firm to develop ideas or launching a website, etc.
BENEFITS OF OPEN INNOVATION:
 Development of new product and services- there is a start-up in the industry, there is
nothing exciting than getting their launching of first product in the market. But this tough
in focusing on sale of their first product rather than investing time in what else could
company can offer to the customer. Sometimes this is difficult to invest in more
resources with the consideration that start-up have limited budget. Start-up can add third
party interest to create innovative and help the firm to ear maximum profit. New product
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is developed by an organization is helpful in attracting customers which makes strong
customers based to be formed within an organization (Engen and Magnusson, 2018).
 Working on existing products- Sometimes, firms do not need to create new product.
Older product have potential to sustain in the market and earn more profit with different
clients. This is done only when firm have creation team than can improve the quality or
can add on something in the product. There a benefit of open innovation that process
never ends, company can always think about how organisation can do better things in
order to generate more sale and profit for the organisation with open innovation. If an
existing product is enhanced then it impacts an organization by increasing profit
generation from that product to be more.
 Building a strong community- Lego is a best example of how a company is building good
fan base by the involvement of fans. The size of the organisation doesn't matter, there is
always a benefit of open innovation that firm can take time to invest in their fans, new
talents etc. Analysis the needs of the customer and serve them accordingly. Meanwhile
firm will came to know that there is strong community, who can give valuable ideas for
creating something better. These relationship is the basis of good foundation of the
community and build strong project.
 More contribution from the employees- When the employee is feeling dissatisfaction,
There is a lack of feeling of ownership on the work. Sometimes, the team have some
innovation idea but group is not initiating forward to implement that idea. By bring open
innovation in the work place this is easy to express of ideas forward. In a big planning of
a project. When people feel more invested in the bigger goals of the organisation, it make
more excited to come in the morning and working with full heart and soul. Organisation
must implement open innovation for the betterment of the organisation with the
employee’s involvement (Bouwer, 2017).
 Forward looking for competition- organisation needs to keep their employee engaged and
thinking about new ideas. Use of open innovation will help organisation to target the
potential customer with the unique product. It is required to be aware about the
competitors to gain sustainability within market with more effectiviness.
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 Costs reduction- when firm is working with different companies, cost will be split and
firm will more efficient because each company's member is doing their best role for
targeting the right market with product development.
 Time to market growth- firm just need to start collaboration with the company that
already has all it, leave figuring out how to make desired product, train you people, buy
equipment etc.
 New business opportunities- Working with other companies will allow you to have more
new opportunities in the market with the existing product.
 Reduction in risk- Any thing happened with a risk. if firm do the innovation with
experts, risk will be minimize, especially if organisation is getting proper feedback with
their potential customer.
 Feedbacks of the customer early in the development process- Early participation of the
customer will help the firm to rectify the product according to the customer choice and
preferences.
 Access Talent- This is the major benefits of open innovation that lack of talented or
skilled employee is harming their ability to work. Open innovation acts as a bridge
between internal teams and outside environment. Organisation take new ideas and
solution together to make better skills on a large platform.
 Accessing the right infrastructure- Working with the big organisation help to develop the
funds properly and could allow employer to bring firm product to market.
Innovation is a source for an organization which is used by them to gain higher productivity
by inputting lower amount of money, time and efforts. Innovation is a process which brings up
more value to the company which would not have been possible by the company themselves.
Open innovation is one way to gather and generating new ideas from the external environment
and developing better and innovative solutions foe those whom are highly affected by the firms
initiatives that are its customers. It is very common for businesses to fail while innovating as
they lack integration capabilities to combine number of projects.
Few limitations of the open innovation process
 Unclear Goals and Wrong Audience– Open innovation idea have to be clearly stated
and needs to present clear purposes and goals. Otherwise the implementation of the
process will be affected and productivity will be reduced. This is a major limitation of the
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whole phenomena of open innovation. Another factor is the selected audiences have to be
correct for the specific agenda of pursuing the aims collaboratively. This is a key
limitation if the audiences and goals for the process of open innovation are not precision
determination. If unclear goals and wrong audience is targeted then sales is directly
impacted and also growth of the company is affected in negative manner this is going to
make goodwill of the company to be spoiled in market.
 Diminishing returns- Innovation is a costly affair which is pre-known by all, searching
for knowledge and ideas outside to the organization lead to increased coordination costs
along with other types of costs and risks, both internally and externally. The main reason
behind it is the incurring opportunity cost which is attached to every decision of
management. Also, external engagement with third parties and partners induces the risk
ratio because of the uncertain nature of the parties. This increases costs too, as well with
time implementation of open innovation do diminishes the returns. Therefore, it is a
limitation if the strategic approaches adopted are not properly planned to innovation, the
risk can be an increased like risk of wasted ideas, time as well as costs. In this cost of
investment is dependent on the basis of which returns is distributed (Bagno, Salerno and
da Silva, 2017).
 Operational and structural challenges- Another limitation of the open innovation
concept is the decision making for executing plans made and strategic decisions. It is a
complex field which develops a necessity rethink and examine the current ways of
working and processes before application on open innovation practice successfully. A
strong open innovation concept have to be developed with clear goals and needs to be
communicated clearly. The limitation arises when the support provided is poor to the
stakeholders, the strategy is lacking integration and alignment with other operational
plans and structure. Decision makings should be enhanced and introduced in market
because it helps in enhancing operation that has to be performed by an organization. Also
structural challenges is being solved in order to make an organization work in proper
manner with effectiveness.
 Developing and implementing ideas- Another limitation arises when the ideas
developed do not become effective enough to place externally and introduce in the
market as they are not worked further. This is a critical challenge which is faced by
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organizations while implementing open innovation. It is a challenging task to find a way
for ensuring that various ideas in the developmental stage in appropriate structure and
timely manner. Hence, the challenges that are encountered by the businesses includes
prioritizing ideas, capacity of the team, availability of resources and many other. Ideas
are required to be developed in a way that innovation is required to be used which makes
goals and objectives set by an organization to be achieved in effective way.
FINDINGS
As stated above, concept of open innovation is rapidly increasing as numerous
organizations are adopting this framework. This notion enhances knowledge expansion and
encourages innovative thinking within firm. It enables organization to develop products by
keeping in view requirements of customers which leads to increment in satisfaction level of
customers. Open innovation improves brand image of company by enhancing value creation
activities, hence, customer loyalty increases along with it ability of business to retain its
customer also improves. It also improves collaboration with other organizations and people
which enlarges scope of business. It enhances creative thinking and continuous improvement as a
result of which company attains higher productivity. Digital transformation and usage of social
media has further boosted utility of open innovation.
In view of Engen and Magnusson, Innovation refers to procedure of creating, developing
and implementing new ideas and concepts. Open innovation helps organization in tapping
various ideas and knowledge and commercialize it. From the above report, it can be determined
that open innovation has several advantages (Santos and et.al., 2018). This process of open
innovation ensures increment in company's product and service portfolio and development of
business models to ensure smooth functioning of operations. It helps entity to align with
changing trends and customer needs. It ensures development of value-offering product to
customers and also it is a time-saving concept. Example of Proctor and Gamble can be
considered that invented a innovative toothbrush with the partnership of Japanese firm.
It even saves cost and time of research and development of organization. While analysing
another example of open innovation, it can be stated that Hewlett Packard utilized open
innovation concept successfully. The company organized lab for the purpose of collecting
innovative ideas and developing them for the benefit of business with the help of open
innovation. Open innovation team is formulated that links researchers and entrepreneurs and
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encourages them to provide innovative solutions of business problems. Primary goal of this team
is to develop technologies. Among all, most essential benefit of open advantage is to gain
competitive edge and save cost. It contributes to overall performance, productivity and
profitability of business. It serves as a bridge between internal team and external network.
There is an example of open innovation that is above discussed is Cisco, it is a Residence
program in order to invite early stage entrepreneurs with big ideas for the solution to join
incubation program (Bouwer, 2017). This include investment from the company for the
cooperative work with product as well as engineering department. Open innovation mean create
new revenue step for the organization. It is used internally in the company. Through this entity
enjoy competitive advantage over others. There are some benefits are it helps in improving the
performance with full planning and increase the profitability.
From the above discussion, there are certain limitation of this. First, if the implementation
is not execute properly, it creates lot of pressure. There is lack of planning in the company if
there is no open innovation. If the information is collected is not used in effective manner, then it
gets disclose which is not good for company. It also harms the routine workflow due to increase
in fault.
On analysing above points, open innovation is dependent on knowledge sources through
external factor. It is innovating through people outside the county. There are some cases in which
flexibility is lost, and control over knowledge is also ruined. There is more benefit is occurring
rather than limitation so every entity is using that in their workplace. In market the entry is easier
because there is lot of information is available. In this resources are fully utilized and their
learning experience is also increased (Ercan, 2019). It gives access in limited broader so it is
implement in effective manner. They can only use by that company which provide value
products to the customers. This makes compatibility and productivity to be enhanced which
make sure that internally an organization is enhanced. Also from view point of crime various
aspects is also been covered. Due to this work flow increases and can get collapsed due to fault
increased. This makes compatibility and productivity to be enhanced which make sure that
internally an organization is enhanced
There are some elements which are not taken into consideration is overlooking criminal
aspects which are not remain magical or tough. Open innovation has to build on the mutual
believe, it can harm the company as an internal structure. There is terms and condition is
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discussing the thoughts which are to be handled which thoughts have been submit. The rights
and protection related to theory and thought has been captured in a right manner because if
someone use this they collect thought and use that platform for innovation. It also involves
paradigm which mean it become projects in cooperation with outside company due to acquisition
and merger. The final result is that product come in marketplace with aid of complete inner
assets from initial concept. End product is also end result of incorporating external data at
various degree of the development. It is an alternative to the conventional method of performing
innovation where information has to stay with present confines (Potts and Ratten, 2016). It is the
transparent utilization of external contributor to achieve a goal. It is the first innovation which
collaborates the external users. Their main focus is to connect and integrate. Therefore, it is said
that open innovation is important which help in improving the performance of company.
CONCLUSION
From the above report it can be marked out that innovation is considered to be one of the
most important aspect that has helped in gaining importance. Further implementation across
various industries. As in each phase it is able to describe understanding view to boost innovation
and faucet several assets through understanding in both internal and external manner. It can be
said that innovation is going to be perused within an organization and managing managers within
an enterprise which sells participation of employees at a stage within selection making process.
This is said to pressure innovation in an organization and managing of managers within
enterprise is required to sell participation of employees at some stage within section making
process. In this additionally reinforces is there to emblem and helps in making responses within
competition. End result enterprise profit aggressive advantage within market. Each benefit as
well as barriers to open innovation in a corporation.The use of social media has superior the
usage of open innovation even extra.
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REFERENCES
Books and journal
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Bouwer, L., 2017. Innovation Management Theory Evolution Map.Available at SSRN 3222848.
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Ercan, T., 2019. New three-part model of innovation activity in construction companies.Journal
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