Managing outside innovation

In the process of reviewing literature we thought of cloud consulting as an open innovation for Russia. According to Boudreau & Lakhani (2009), open or outside innovation is “relying on outsiders both as a source of ideas and as a means to commercialize them” (p. 69). Indeed, being a part of crowdsourcing, cloud consulting might also belong to open innovations, because Experts who solve tasks for the Client (Seeker) are all outsiders for both the Client and cloud consulting company. Authors found that most of the time managers are willing to, but have vague understanding of motivating and managing the open innovation. They suggest that companies should organize outside innovations through collaborative communities. Authors found that collaborative communities are useful when innovation problem involes cumulative knowledge, that is continually developing on the past advances. In other words, it seems to be true that attracting outside community of professionals possessing various type of knowledge and expertise for solving tasks set by Client via cloud platform might be effective.

To support the latter view, Boudreau & Lakhani (2009) suggested 3 types of platform business models:

- Integrator platform model. For this type of model, the platform’s owner sells to Client-companies a relatively high degree of control. The Client can monitor and directly control transactions, process of project management, and can even put veto on undesirable decisions.

- Product platform model. Client-companies have less control, and external innovators hae higher control and degree of freedom in making decisions and providing the Clients with the final product.

- Multisided platform. External innovators and client-companies are free to interact with each other directly, as long as they use the online or cloud platform.

The multisided platform seem to be the best option and fit for the cloud consulting model suggestion, which might be better seen after we define the term cloud consulting in the conclusion to literature review.

Examples of successful crowdsourcing companies

The following section of the literature review provides examples of the 3 most successful companies dealing with cloud consulting. All examples are designed in similar structure that consists of the overview of the company, its products, and things making the cloud consulting companies special, i.e. actions that somehow revolutionized consulting and became to certain extent an example of the Blue Ocean strategy.

Innocentive

Company overview

The company was created by the pharmaceutical firm Ely Lilly (US) in 2001, with the objective of bringing together companies with specific R&D needs and scientists from all over the world. The company calls its methodology “Challenge driven innovation”. Innocentive refers to its clients and “crowd experts” as “seekers” and “problem solvers” respectively. The company is incorporated in Waltham, Massachusetts (US) and has its European office in London.

Innocentive provides cloud consultancy to complicated projects mostly, which require experts with solid knowledge in physics, chemistry, and other various natural sciences. Company’s website is used as a platform for connection between client companies (seekers) and experts (solvers). Among Innocentive’s clients are US Air Force Research Labs, EMC Corporation, NASA, Nature Publishing Group, Procter & Gamble, Scientific American, The Economist, and Thomson Reuters.

Company uses Transpay as a payment platform. Transpay is one of the largest cross-border payments platform that offers the world's largest, independent direct-to-bank payment network.

Products

Innocentive struggles to provide ideas and solutions to important business, social, policy, scientific, and technical challenges. The challenges, i.e. products of the company, are divided into the following major groups:

InnoCentive Premium Challenges: Online platform for crowdsourcing innovation problems to talented minds from all over the world who compete to provide novel ideas and solutions to important Challenges. Premium Challenge is developed with the help of Innocentive’s PhD-educated subject matter experts, posted to global community of Problem Solvers in the form of a competition, tracked, rated, and the submitted solutions evaluated and awarded. Challenges are either general (e.g. brainstorming innovative ideas for a process) or specific (providing complex solutions requiring specific experience or education). The challenges are resolved in 45-90 days. Team of Innocentive’s PhD experts fully maintains the challenge, paying a lot of attention to the Seeker’s anonymity and manages intellectual property rights and licensing.

InnoCentive@Work: Cloud-based enterprise innovation management platform for building collaborative internal innovation communities to harness the collective intelligence of employees and partners. Value Seekers get on this challenge is the following:

§ Single Enterprise-wide open innovation System-of-Record - the platform optimizes the entire Challenge lifecycle and enables both InnoCentive-facilitated as well as customer-led challenge formulation and development;

§ Fit-to-Purpose Ideas and solutions to problems – various types of challenges allow Innocentive to support wide array of unique organizational requirements;

§ On-demand access to world class innovation capacity – the platform gives a complete control over challenge distribution to internal and invite-only audiences such as customers or partners. It also provides the full control over who suggests ideas and views and attempts to solve the Challenges. Moreover, Seekers have ability to audit the process of challenge resolving.

Custom Challenge Programs: High-profile Challenge programs and innovation competitions, uniquely tailored to the Seeker’s needs, for solving big problems and encouraging breakthrough innovations. Generally there are 2 types of those challenges:

§ Grand – large problem, requiring complex and comprehensive approach and consultancy. Seeks for radical innovations or breakthrough solutions that can revolutionize the industry Seeker operates in. Provides very high financial rewards to Solvers and often involves experimental testing of the solutions to ensure their effectiveness and worthiness;

§ Showcase challenges – broad problem that calls for innovations (e.g. IT security or energy sector). Innovators are encouraged to submit original proposals that fit into topic and are evaluated by panel of experts consisting of Innocentive’s and Seeker’s professionals. That panel decides on the reward distributions as well. Solvers are encouraged to personally pitch their solutions in front of the panel of experts. Showcase Challenges are often aimed at entrepreneurs, startup businesses, or pioneering small- and medium-sized enterprises (SMEs), giving them an opportunity to promote their businesses and enhance the profile and credibility of their innovations.

Innocentive’s common challenge types include:

§ Ideation: global collaboration for producing a breakthrough idea, these Challenges rapidly engage Solvers and accumulate novel submissions;

§ Theoretical: in-depth written proposals and often includes details on potential implementation options;

§ Reduction-to-Practice (RTP): A prototype that shows an idea in actual practice (though on a non-commercial scale) and requires an “artifact” (e.g., physical evidence).

§ Prodigy "Big Data": a computational challenge with an online scoring and feedback component, often used for statistical analysis, predictions, or optimization of computer programs.

§ Novel Molecule Challenge (NMC): A request for various non-commercial chemical compounds, proteins, extracts, polymers, and DNA sequences.

§ Electronic Request for Proposal (eRFP): A request for a partner or supplier to provide technology, materials, or expertise.

Date: 2015-12-24; view: 452