Hello class,
In class today, we shifted gears from discussing various financial metrics and ratios to benefits of open innovation. For the blog today, please discuss the potential organizations your company could benefit from cross-sharing through open innovation. Additionally, please go on to comment how your projects could potentially encourage open innovation and the benefits of doing so.
Look forward to reading and have a great weekend!
Innovation is one of UnitedHealth Group’s core values. They have the Optum Labs, which is a collaborative and innovative research center. This center provides access to loads of information, technology, and scientific expertise. UnitedHealth Optum Lab scientists do research on the most effective ways to engage consumers in healthcare. In July 2014, UnitedHealth came out with a mobile application called Health4Me. This application allows patients to comparison shop for different providers and treatments while anticipating their healthcare expenses. It also allows patients to have a digital insurance card.
Although this application is innovative, it is not retaining users — it is missing an addicting fun factor to keep users coming back. United Optum could partner with Amazon and incentivize users to use their rewards cash on Amazon “Health and Personal Care” items. We could allow users to use their Optum rewards on any item; however, for it to be a true win win relationship, it is best that the user spends their rewards on health related items. United Optum could also partner with Whole Foods, Nike, local farmers markets, and other health related companies.
Going off what Alex is saying – we can tie in open innovation by using the platform we plan to develop to help companies “get in bed” with each other. Imagine a place where you keep ALL your rewards and can track them all. Now imagine being able to combine points to access a reward. Not only are you given a single marketplace for your rewards, but you are sent incentives to receive more rewards. For example when its time for your annual check up you will receive a notification saying if you take a certain test when getting that check up you can receive an instant $200! You can then take that $200 and spend it where fit or receive an added bonus (we are still working this out) such as double points for using that money towards something healthy like a gym membership or a gift card to whole foods. Additionally this opens up the discussion between, say, United and gyms to work together. We would hope that opens more doors for collaboration and innovation between the companies.
Back to the subject at hand, I am curious to hear about United’s open innovation methods. I know they buy at least one company a month because they are scared of competition and want to keep the upper hand. Looking at the balance sheet it seems to be working for them and I wonder if they can make even more money by collaborating in some instances.
I believe that my company could benefit a lot from cross-sharing. There are so many companies (established and start ups) entering the internet of things industry, it is crucial that everyone’s product can talk to each other. The value proposition of IoT is that by leveraging the network effect created by the communication of different devices, we can create a system that is greater than the sum of the individual parts. We proposed in our business model to create a IoT protocol or standard that any company can adopt, and allow all company’s product to communicate with each other. This will actively encourage open innovation, as companies can utilize our technology to create different innovative products in different spaces that Wipro might not be able to create, as there are just so many possibilities out there.
Cross-sharing goes hand in hand with open innovation. The more we’ve researched Wipro and the IoT space, the clearer it has become that no one company can come to really dominate or own this space. There is too much going on at once and too much keep track of for one company to undertake by itself. This space will be defined by partnerships and cooperation between firms, creating a common ecosystem for everyone. This will have an interesting affect on each of these company’s financials. By partnering and innovating together, these companies will all have adopted an open balance sheet. When one company starts doing extremely well, it will bring many other companies into prominence with it and we’ll see revenues growing with IP is traded and licensed.
Today’s lecture was quite informative. For Fujitsu, by open innovation the company could sell the trash assets and benefit from external R&D. Since Fujitsu is doing closed innovation with every aspect of technology frontier, the company is over structured and it spends a lot of resources on different projects. By sharing its platforms with other parties, Fujitsu would definitely benefit from an increase of ROA and ROE. In our challenge with higher education, Fujitsu could work with Microsoft and Google for its software platform. Also, Fujitsu can partner with higher-education startups to foster this environment and invest in these IPs and companies.
Adding onto what Nan’s stated, Fujitsu has an overwhelming number of products and services, yet their ROE and ROA do not look promising. Therefore they could greatly benefit from open innovation by reducing their expenses in developing these new products and services and focusing on collaborating with other companies, borrowing their ideas as well as sharing their own ideas. Since our challenge revolves around higher education I see a partnership with universities as a great way of utilizing open innovation. By placing their products in universities and allowing students to develop their own programs or software using Fujitsu platforms/servers they are fostering innovation and creativity, much of which can be returned back to Fujitsu. Aside from partnering with well-established companies I think there is great potential in working with universities and start-ups where people are constantly coming up with new ideas. Fujitsu can spend more of their money on purchasing IPs and less on internal R&D.
For J&J, we are planning to develop an engagement platform that would benefit the whole healthcare system. It has the potential to be an information hub that provides valuable information to not only the patients, but also researchers, doctors, hospitals, and governments. With those shared information, all the beneficiaries can engage in a new round of open innovation and therefore contribute to the well-being of human kind. The potential organizations J&J could benefit from cross-sharing include information technology companies that are experienced in dealing with big data and analysis, research universities that have knowledgeable individuals, and other healthcare companies that are developing technologies in similar fields.
An important note is that the digital platform is open and is not solely J&J focused. Its main aim is to improve communication and efficiency among patients and engage patients in actively sharing their health experiences with one another. One benefit of this shared and open platform is the enriching experience that customers can experience through J&J, which helps create a stronger bond between the customers, patients, doctors and many other parties within the healthcare ecosystem pioneered by J&J.
As my peers from other groups,we also believe that GE could benefit a lot from cross-sharing.I think open innovation is the solution for the declining situation that Ge is going through.They have to make the most of their potential and be opened to new challenges with other companies. India is a huge market for them where they can partner with local clinics. This projet can help GE to make money and ameliorate its ratios and at the same time it is a good way of improving the health system in the rural areas.I also think that knowledge can flow out and in exchanging the data with other institutions such as universities ,hospitals or even the government.
Some possible organizations that GE could benefit from cross sharing with in terms of telemedicine in India include hospital organizations. Since the majority of the revenue we hope to attain through our new business model recommendation for GE is based on information sharing and big data analytics, it would be beneficial to partner with clinics and NGO’s that set-up these clinics in order to reach the diagnosis centers of India. This would allow us to be able to reach the entire Indian clinic and lab market with ease instead of reaching out to each one individually.
Open innovation is very important among tech companies to keep up with the high pace. Wipro performs a lot of R&D by its own, but by sharing research and discoveries with others it can increase its knowledge base while cutting down costs. There are many companies in the market to share innovation with. Wipro can benefit from sharing innovation with the major competitors like IBM, Cisco, Siemens etc but also invite these to joint ventures for excelling leverage when building smarter cities. Theese major actors have tons of knowledge to share but it is also important to not forget all the smaller actors out there in the IoT market. Theese companies might just have one or a few new technologies but their importance is not to neglect.
I agree with what you are saying – that Wipro has a lot to gain from sharing innovation with others. If Wipro is to succeed with building smart cities and setting a standard for it worldwide they will need to cooperate with IBM, Cisco, Siemens etc. Not only to gain access to new technology but also to reach new, or where Wipro isn’t as big, markets. Open innovation can unlock all this potential and make the pie bigger and subsequently Wipro’s share of it.
I also agree with Gustav that Wipro has a lot to gain from cross-sharing through open innovation. Many companies are trying to enter the IoT and smart city ecosystem, but Wipro has the ability to differentiate itself by focusing on frugality and cost efficiency. Cross-sharing can help with this because by sharing information and knowledge with partners, Wipro is able to cut its R&D costs.
Last week’s class was particularly interesting due to the case study of P&G. Having interned there over the summer, it was intriguing to see what people outside of the company thought about P&G in terms of innovation and building products that people love/need. A cool note to add about A.G. is his recent cut of almost 100 P&G brands that were not among the most profitable, in order to harness the focus of the company. Actions like those will help P&G stay lean and keep innovating for the future.
I definitely think that Coke can benefit by learning from P&G’s innovation model. For example, P&G accelerates its innovation cycles via “Connect + Develop,” their online open innovation website. The online platform enables user submissions to directly feed into the business category leaders, and innovators can access full descriptions of needs, including scale and success criteria. Our team is also hoping to develop a digital bridge that Coke can utilize internally to accelerate the adoption of new technology within the Coca Cola system of business units and bottlers.
Since Coke’s business model involves more internal communication, one partnership they could benefit from is a partnership with a technology company, more specifically one that creates platforms for sharing ideas. The platform would help create a feedback loop that allows the innovation team to hear the thoughts and concerns of every department. It will be a great way for departments to constantly interact with one another. This eliminates the constant face-to-face meetings and conversations, which will decrease time lost and therefore decrease money lost. In addition, by having an ongoing online feedback loop, employees within Coke will be able to establish stronger connections. All in all, the integrated feedback loop expedites the process of technological implementation by giving other departments more of a say.
The biggest takeaway for me from last week’s lecture was our discussion of the open balance sheet. I didn’t understand that “dead” assets on the balance sheet were bad before this lecture. I assumed that having many assets were a good sign for the company, but I forgot how expensive financing those assets must have been. It is very important to recognize these dead assets and to sell or give them to businesses that know how to use them. This share and flow of knowledge will lead to more value creation and capture through a more flexible and fluid balance sheet.
In addition to partnering with clinics and hospitals in India, GE should also move towards partnering with research centers. In addition creating value for patients, GE can sell the data it collects to pharmaceutical companies or international organizations such as Centers for Disease Control and Prevention. These organizations can use this data to identify certain health trends or develop pharmaceutical drugs to combat the next upcoming endemic. By establishing these partnerships, GE can also capture value for itself.
As Epiphany mentioned I think that partnering with clinics and hospitals in India is not enough, we have to take advantage of the benefits of the cloud and internet. GE should open all his products/tools/expertise and assets to other companies in order to bring value to other organizations and this wouldn’t have to had any additional cost from them. If GE says:’ guys just take whatever you want’ then at some point it will be able to capture value for itself.
This class allowed me to understand better financial statement and some ratios that are crucial when comparing companies. I understood as well where assets where coming and why having a lots of assets doesn’t have to mean that it is a good thing but rather that is a thing that needs to be financed. In the other hand these class allowed me to understand what is the situation of GE concerning its finance status and it was really helpful. We can now better understand the company and propose solutions that make better sense.