Upload
frost-sullivan
View
2.746
Download
0
Tags:
Embed Size (px)
Citation preview
Five good reasons Five good reasons to go for Open Innovationto go for Open Innovation
Franck Oliver Sime and Nicolas MeilhanFranck Oliver Sime and Nicolas Meilhan
Defined as the creation of a substantial new value for customers or businesses, innovation has 4 major dimensions: What, Who, How & Where
2
Source: MITSloan – ’06, F&S analysisSource: MITSloan – ’06, F&S analysis
PROCESSES(HOW)
Organization
Networking
Brand
Supply Chain
PRESENCE(WHERE)
OFFERING(WHAT)
Platform
Customer Experience
Value Capture
CUSTOMERS(WHO)
Solutions
Innovation
The central idea behind Open Innovation is that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own capabilities or create new capabilities
3
Source: Chesbrough, H. – ‘03, F&S analysisSource: Chesbrough, H. – ‘03, F&S analysis
Market
Research Development
Company boundaries
Research projects
The closed paradigm The open innovation paradigm
•The smart people in the field work for us. • Not all the smart people in the field work for us. We need to work with smart people inside and outside the company.
• To profit from R&D, we must discover it, develop it, and ship it ourselves.
• External R&D can create significant value: internal R&D is needed to claim some portion of that value.
• If we create the most and best ideas in the industry, we will win.
• If we make the best use of internal and external ideas, we will win.
• We should control our IP, so that our competitors don't profit from our ideas.
• We should profit from others' use of our IP, and we should buy others' IP whenever it advances our business model.
Current market
Research Development
Company boundaries
New market
Research projects
The potential benefits of Open Innovation have never been as strong, driven by a combination of internal constraints and external opportunities
4
Recent work pursued by Frost & Sullivan led us to identify 5 good reasons for companies to go for Open Innovation.
Budget constraints
Limited resources
Distributedknowledge
Accessible communities
Specific know-how
Uncovered areas of the value chain
EXTERNAL OPPORTUNITIES
INTERNAL CONTRAINTS
R&D challenges
Untapped capabilities
Great ideas
Room for
Open
Innovation
Skills gap
Invest your R&D dollars more wisely
5
Issue
In the economic downturn, there is a tendency to reduce R&D
costs and focus only on projects with immediate returns. R&D
is asked to deliver more with less.
Illustration
In 2011, GSK started a long-term
partnership with 10 academic
“superstars”, with the aim of
developing medicines more cost
effectively.
Under the agreement, academics
work more closely with the
company but still retain their
independence. GSK will tap into
their expertise while providing
them with funding, facilities, and
large incentives paid if a
treatment is successful.
Professor Mark Pepys was the
first academic to be selected for
the program.
*OI: Open Innovation*OI: Open Innovation
Open Innovation practices addressing this issue
•Partnering with academia. e.g.: GSK with academic superstars
•R&D outsourcing/partnership. e.g.: Cognizant (Business
Process Outsourcing)
1
6
An open door to a wider community of experts to address specific research challenges2
Issue
Companies often face specific innovation challenges that
require a combination of expertise and experience not found
within the company. In order to make internal R&D more
effective and more agile, companies are increasingly making
use of external capabilities.
Illustration
InnoCentive is an open source
platform that tackles R&D
problems in a broad range of
domains and frames them as
“challenges” for anyone to
solve them. The best solution
for each challenge is rewarded
with a cash incentive.
Founded in 2001, the company
claims to have a community of
250,000 re.g.istered solvers,
more than 1,300 challenges
posted on the platform and
more than 27,500 solutions
submitted.
Open Innovation practices addressing this issue
•Open source platforms. e.g.: InnoCentive, NineSigma, Fold it.
•Open facilities (lab, campus, etc…) e.g.: Stevenage BioScience
Catalyst (by GSK & the UK department for Business, Information
and Skills - BIS); High Tech Campus Eindhoven (by Philips).
7
An open door to benefit from ideas or technologies already developed by others3
Issue
Nowadays companies have a hard time in creating truly innovative
products and differentiate themselves from competition
By extending their boundaries to capture existing innovation,
companies strengthen their internal capabilities and tap into the
potential offered by external networks. This ultimately reinforces
their innovation pipeline
Illustration
Corporate venture capital (CVC)
is the investment of corporate
funds directly in external start-
up companies. Rather than
relying on their own innovation,
CVC is an attempt to benefit
from innovations existing in the
market place
How CVC succeeds?
• Get in early and stay in
• Focus on start-ups which can
help the corporation
• Engage the main stakeholders
in the process: the business
units.
Source: IMD –CVC When it works and when it doesn‘t – ’07; F&S analysisSource: IMD –CVC When it works and when it doesn‘t – ’07; F&S analysis
Open Innovation practices addressing this issue
•Corporate Venture Capital. e.g.: Intel Capital; Pfizer Venture
Investment
•Licensing and similar alliances (manufacturing, distribution, etc…)
8
Involve your value chain partners early in the process to reduce your time to market4
Issue
Time to market is critical to innovation success especially for
industries with short product life cycle.
Involving your suppliers, customers and staff early in the process
will reduce your risk of being blindsided by competitive
technologies or products. The early exposure to market (customer
insights) will also reduce the number of iterations and shorten your
time to market.
Illustration
Connect + Develop, P&G’s
dedicated open innovation portal,
offers the opportunity to
scientists, inventors and SMEs to
bring their innovations to P&G.
Connect + Develop claims more
than 1,000 active agreements
with innovation partners and
more than 4,000 unsolicited
ideas every year.
When solicited, 75% of
responses provide a solution that
can be turned into a product and
eventually launch onto the
market.
Open Innovation practices addressing this issue
•Own operating OI platforms. e.g.: Connect + Develop from
P&G; BMW virtual innovation agency
9
Think outside your industry box to create additional value for your customers (1+1=3)5
Issue
Companies tend to focus their attention only on their own industry
while unique synergies exist outside their box.
By joining forces with a partner outside their core industry with
complementary skills, companies are able to create innovative end
products for customers. When doing so, they increase the chances
of entering a new market more easily or simply reinforce their
presence on their existing markets.
Illustration
Since 2007, Samsung and
Google have entered into a
global cooperation to offer to
mobile users worldwide a
more dynamic experience.
Samsung mobile phones
equipped with Google
software enable users to
search information, find
locations, and manage their
email on the move.
In 2011, GSK partnered with
McLaren (Formula 1 racing
firm) to use McLaren’s
technology and processes to
enhance the performance of
GSK operations
Open Innovation practices addressing this issue
•Partnerships. e.g.: Samsung & Google; GSK & McLaren
•Data sharing systems/ platforms. e.g.: Tres Cantos Antimalarial
Set
10
OI benefits are relevant across industries but the fit of OI practices differs from one industry to another
Five good reasons to go for Open Innovation
Associated practices
HealthcareChemicals Materials &
Food
Information & Communication
Technologies
Automotive & Transportation
1. Invest your R&D dollars more wisely
• Partnering with academia
• R&D outsourcing/ partnership
2. An open door to address specific research challenges
• Open source platforms
• Open facilities (lab, campus, etc…)
3. An open door to benefit from ideas or technologies already developed by others
• Corporate Venture Capital
• Licensing and similar alliances(manufacturing, distribution, etc...)
4. Involve your value chain partners to reduce your time to market
• Own operating OI platforms
5. Think outside your industry box to create additional value for your customers
• Partnerships• Data sharing
systems/ platforms
WeakStrongFit :
11
The key points you need to consider when exploring the potential benefits of OI for your organization
o What Open Innovation practices fit better with your
company goals and culture?
o What approach is most likely to work best when
implementing Open Innovation within your organization?
o How will you monitor and evaluate Open Innovation to
ensure success?
12
About Frost & Sullivan
Sector-based organisation >40 offices worldwide
• Market research and consulting company
• 50 years of experience
• 40+ offices worldwide global coverage & local expertise Collaborative Network
• Sector-based organisation 9 divisions
• 1,700 employees across the globe
24 rue de Londres, 75009 Paris t+33 (0) 1 42 81 54 52
13
Our consulting business delivers business analysis & recommendations, focusing on strategic marketing issues
Key Questions Addressed
What Is the Starting Point?
Where to Go?What to
Achieve?How Do We Get There?
What Is It Worth?
How do we get it
implemented?
Strategy & value creation
Operational strategy
Structure & organisation
Long term opps Scenario & planning
Due diligence
Product portfolio review
Business modelling & planning
New product development/ launch
Sourcing
Performance
Innovation practices
Support function
Competitive intelligence
14
Case Study – Open Innovation within the pharmaceutical industry
Outcome & business impact:• F&S analysis provided an overview of all existing Open Innovation practices used in the pharmaceutical industry
• Open Innovation best practices were identified, highlighting relevant challenges and key success factors; transferable practices within our client’s organization were then selected
• Main findings of this project were presented to a large audience of client’s R&D and Licensing department and are used as pillars to develop the company Open Innovation strate.g.y
Our approach and work:
•We first analyzed the specificities of pharmaceutical innovation process before short listing companies with existing Open Innovation practices to be analyzed in detail
• We then conducted a detailed benchmark of practices among selected companies. Key success factors, challenges and outcomes of these practices were analyzed thoroughly to identify best practices
The Client :A global pharmaceutical company
The Challenge:Identify Open Innovation best practices within pharmaceutical industry and help our client to optimize its R&D pipeline
Project objectives:
• Understand drivers for the adoption of Open Innovation and define key success factors for its implementation
• Identify Pharma Open innovation best practices based on a benchmark of initiatives and programmes among peers
• Provide recommendations to support our client’s initiatives towards Open Innovation
15
Your contacts
Franck-Oliver SimeConsulting Analyst, Paris Office
Worked on this research
+33 1 42 81 38 22 [email protected]
Nicolas MeilhanSenior Consultant, Paris Office
Led this research
+33 1 42 81 23 24 [email protected]