Foundation for business model

In this section of the report, we were trying to represent our understanding and vision of cloud consulting in the form of business model. That model was drawn from reviews of businesses of the three companies that currently work either in certain forms of crowdsourcing or open innovations, which are the closest areas to cloud consulting. After our suggestion of the cloud consulting company business model, there is an attempt to see how that model fit into Russian business environment, how can the major potential issues and obstacles be overcomed. For the sake of achieving the most practical representation possible, we decided to focus on the major issues identified by the interview respondents, i.e. managers.

As for the precise type of the business model, we decided to choose Business Model Canvas approach (BMC). BMC approach usage allows organizations to create structured model, with elements liked with business main issues: resources and activities, partners and clients, value propositions and channels of doing business, revenue streams and cost structure. It helps organizations conduct structured, tangible, and strategic conversations around new businesses or existing ones. (Hbr.org) Big companies use BMC in order to manage strategy or create new growth drivers, while start-ups use it as a template or draft for the right business model, so as an instrument of business model choice. What is more, using of BMC allows companies to shift from product-centric thinking and towards business model thinking. One of the advantages of BMC is that you can simply compare different models. In addition, as we have compared three business models of companies, mentioned above, we wanted a tool that could be easily used not only for building a business model, but also for their comparison. That is why BMC was finally chosen as a template for business model creation.

After completion of three companies` BMCs, we tried to create a unified BMC for cloud consulting in general, as we see it. Our final suggestion about new company that can operate in cloud consulting in Russia is also was completed using BMC approach.

Review of the companies

Innocentive

This section of the report is of great relevance. It provides the detailed description and analysis of the Innocentive’s business model. After thorough research we found that this company is the best successfully operating example of the cloud consulting services firm. In the most important part of the report we provide the roadmap for IBM on implementing cloud consulting in Russia. The business model of Innocentive is a foundation for that roadmap.

General description of the business: the major idea and model

Innocentive is a crowdsourcing company based in Walthman, Massachusetts that provides platform for research and development problems in engineering, computer science, math, chemistry, life sciences, physical sciences and business. The company was established in 2001, when some former employees of Eli Lilly and Company, a huge pharmaceutical company, decided to realize their ideas of application of the Internet to business that was generated during their mutual project at Eli Lilly and Company. Today, the company is the one of the leaders in this industry operating all over the world with a solver network of more than 350 000 users from nearly 200 countries. The majority of experts are well-educated, 68% of them are holding PhD.

The major idea of the company is to be an intermediary between the client, as a rule a huge company, and an expert. The client, a “seeker”, has a problem, so called “challenge”, that it wants to solve. From another side, there are scientists, engineers and other talented experts or “solvers”, who are ready to solve the problem. Innocentive provides those two parties with cloud-based innovation management platform that ensure collaboration of seekers and solvers. Seeker posts their challenges at the platform and appropriate solvers provide it with the solution. The proven Challenge Driven Innovation methodology and huge community of solvers lead to the rapid innovation and R&D process that helps seekers to be an advanced innovative company with the better cost and time efficiency than ever before. A good example of that was provided by Lakhani (2008). He found that between 2001 and 2007, Seekers had awarded over 200 prizes (total worth $2.6 million) to Solvers from 30 countries. All of this was accomplished by Innocentive’s 30-person staff.

Date: 2015-12-24; view: 438