SMARTY EARS’ OPEN INNOVATION PROGRAM    FOR THE DEVELOPMENT OF IPAD APPS                         ProductCamp Austin 8     ...
Agenda Background Definitions of Open Innovation Industry Successes Open Innovation Services and Software Case Study:...
Legalese•   “The fair use of a copyrighted work, including such use    by reproduction in copies or phonorecords or by any...
Background   Open Innovation is now a very fashionable term    and many companies are rushing to implement an    open inn...
Case Study   We will show how Smarty Ears, a developer of iPad    apps for Speech Therapy and Communication, has    used ...
Clayton M. Christensen• “There’s a better way for  management teams to grow  their companies. But they will  need the cour...
Classical Innovation Process              Idea                           Idea Generation     Idea       2                ...
www.Brioneja.comTwitter: @Brioneja
Classical Stage-GateProcess                               Source: Product Development Institute, Inc.Project is managed in...
The Spiro-Level™ Approach to Innovation                              Resources                                            ...
Definition                    s   What is Open Innovation (OI)?     It is a paradigm that assumes that firms can     and...
The Open InnovationParadigm           www.Brioneja.com           Twitter: @Brioneja
P&G   Connect and Develop – Launched in 2000   Accelerating internal R&D by leveraging the    ideas, knowledge, expertis...
P&G Open InnovationResults   By 2006, 35% of all P&G products had    an external component vs. 15% in 2000.     Over 50%...
Clorox   Clorox wants to use open innovation to:     Find ideas, technologies and products     Outsource entire chunks ...
Keys to Success   OI is a way to speed up time to market and increase    probability of success   OI includes sourcing f...
Open Innovation Services vs.Software   Open Innovation Services offer a    communities of experts in a variety of    fiel...
Open Innovation Services          www.Brioneja.com                                     Twitter: @Brioneja                ...
Open Innovation Software   Spigit     SpigitEngage for Facebook,      organizations can engage their      customers in s...
Open Innovation         Software   Imaginatik     Innovation Central      collaboration platform allows      organizatio...
Smarty Ears’ Open InnovationProgram   Smarty Ears is the largest    app publishing company in    the segment of speech an...
How The Program Works                      Just like in traditional publishing,                       there are authors t...
Royalties   Authors receive a    royalty of 5% to 15%    on all sales for their    app.   The amount of royalty    is de...
ProgramGrowth                In the past Smarty Ears’                 open innovation program                 was limited...
Benefits of Co-Development                                  Submitters are                                   passionate  ...
App Creation Flow Create mockup Create content     Questions Select images Create flow of product Coding Bug testin...
Open Innovation ProgramResults                          ~10 ideas for new                           apps/month           ...
Program Lessons   Win-Win Scenario     Not a one-time payment     Both the company and the      submitter benefit from ...
Acknowledgements Thanks to Smarty Ears, LLC for allowing  me to be part of this exciting new field of  product developmen...
Contact Information Jose A. Briones, Ph.D. Brioneja@SpyroTek.com Twitter: @Brioneja                  www.Brioneja.com  ...
Resources   Making Open Innovation Work. Author: Stefan Lindegaard   Open Services Innovation. Henry Chesbrough   A Gui...
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What is the Benefit of an Open Innovation Process?

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Open Innovation is now a very fashionable term and many companies are rushing to implement an open innovation process without fully understanding its value nor how it fits within their existing product development process. In this Chapter of the “Beyond Stage Gate” series we will discuss the different definitions of Open Innovation, where does it fit in the development cycle, software tools available and a case study. We will show how Smarty Ears, a developer of iPad apps for Speech Therapy and Communication, has used open innovation to greatly increase the number of ideas to market, as well as accelerate the product development cycle.

Published in: Business, Technology

What is the Benefit of an Open Innovation Process?

  1. 1. SMARTY EARS’ OPEN INNOVATION PROGRAM FOR THE DEVELOPMENT OF IPAD APPS ProductCamp Austin 8 February 2012 Jose A. Briones, Ph.D. SpyroTek Performance Solutions Twitter: @Brioneja
  2. 2. Agenda Background Definitions of Open Innovation Industry Successes Open Innovation Services and Software Case Study:  Smarty Ears Use of Open Innovation for Development of iPad Apps www.Brioneja.com Twitter: @Brioneja
  3. 3. Legalese• “The fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright” - Copyright Act of 1976, 17 U.S.C. 107 www.Brioneja.com Twitter: @Brioneja
  4. 4. Background Open Innovation is now a very fashionable term and many companies are rushing to implement an open innovation process without fully understanding its value nor how it fits within their existing product development process. In this Chapter of the “Beyond Stage Gate” series we will discuss the different definitions of Open Innovation, where does it fit in the development cycle, software tools available and a case study. www.Brioneja.com Twitter: @Brioneja
  5. 5. Case Study We will show how Smarty Ears, a developer of iPad apps for Speech Therapy and Communication, has used open innovation to greatly increase the number of ideas to market, as well as accelerate the product development cycle www.Brioneja.com Twitter: @Brioneja
  6. 6. Clayton M. Christensen• “There’s a better way for management teams to grow their companies. But they will need the courage to challenge some of the paradigms of financial analysis and the willingness to develop alternative methodologies” www.Brioneja.com Twitter: @Brioneja
  7. 7. Classical Innovation Process Idea  Idea Generation Idea 2  Idea Selection 1  Project Management Idea 3 Projects www.Brioneja.com Twitter: @Brioneja
  8. 8. www.Brioneja.comTwitter: @Brioneja
  9. 9. Classical Stage-GateProcess Source: Product Development Institute, Inc.Project is managed in a linear fashion“The Stage-Gate system assumes that the proposed strategy is the rightstrategy, the problem is that except in the case of incrementalinnovations, the right strategy cannot be completely known in advance”– Clayton M. Christensen www.Brioneja.com Twitter: @Brioneja
  10. 10. The Spiro-Level™ Approach to Innovation Resources LaunchQuadrant IV Quadrant I Roadmap/Timeline Level Idea Generation Risk Analysis 3 2 VOC Customer Testing 1 Time Time Technology Supply Chain Assessment Analysis Business Value in Use Case Analysis Regulatory Quadrant III Prototype IP Strategy Quadrant II Development Resources www.Brioneja.com Twitter: @Brioneja
  11. 11. Definition s What is Open Innovation (OI)?  It is a paradigm that assumes that firms can and should use both internal and external ideas to further their technology goals. Henry Chesbrough www.Brioneja.com Twitter: @Brioneja
  12. 12. The Open InnovationParadigm www.Brioneja.com Twitter: @Brioneja
  13. 13. P&G Connect and Develop – Launched in 2000 Accelerating internal R&D by leveraging the ideas, knowledge, expertise, know-how of a network of individuals, businesses and institutions from around the world P&G needs are posted on website in classified categories, and then anyone who is interested or has the solution can propose their ideas and get assessed by a specialized team. Payments can range from US$10,000 to US$100,000 (Bessant and Tidd, 2008) www.Brioneja.com Twitter: @Brioneja
  14. 14. P&G Open InnovationResults By 2006, 35% of all P&G products had an external component vs. 15% in 2000.  Over 50% today. R&D productivity increased 60% Today P&G has more than 1000 agreements with innovation partners Source: Veristlabs.com www.Brioneja.com Twitter: @Brioneja
  15. 15. Clorox Clorox wants to use open innovation to:  Find ideas, technologies and products  Outsource entire chunks of product development  License / sell internal ideas and technologies to others Clorox says that for open innovation to work, need:  Strong internal and external networks  Clear choices in corporate strategy that direct the “find” activities  Capabilities, teams and processes to find more ideas  AND capabilities, teams and processes to enable what’s found to be used: combined with other inputs, quickly assessed and built into business opportunities  Source: The Clorox Approach to Open Innovation. Stephan Lindegaard www.Brioneja.com Twitter: @Brioneja
  16. 16. Keys to Success OI is a way to speed up time to market and increase probability of success OI includes sourcing for products, technology, intellectual property and ideas. OI is NOT outsourcing. OI requires constant interactions between companies and inventors. It requires huge partnering capabilities on both sides. OI will not decrease a company’s costs – it will only move it among line items. R&D budget may be less over time, but Legal and Business Development budgets will increase immediately. Source: Open Innovation – Paradigm Shift or Program? September 21, 2009 by Suzanne Harrison www.Brioneja.com Twitter: @Brioneja
  17. 17. Open Innovation Services vs.Software Open Innovation Services offer a communities of experts in a variety of fields.  Problems are posted for a fee to get feedback from the community Open Innovation Software relies in the company’s customer base and a broader reach www.Brioneja.com Twitter: @Brioneja
  18. 18. Open Innovation Services www.Brioneja.com  Twitter: @Brioneja Source: Frank T. Piller
  19. 19. Open Innovation Software Spigit  SpigitEngage for Facebook, organizations can engage their customers in social co-creation by tapping customer insights through idea generation, free thought, campaigns, contests, and game dynamics. Ryma  Ideascope integrates customer feedback with other systems like Help Desk, Customer Relationship Management (CRM), Demand Management www.Brioneja.com Twitter: @Brioneja
  20. 20. Open Innovation Software Imaginatik  Innovation Central collaboration platform allows organizations to include or exclude whichever groups or individuals are most appropriate for the topic Nosco  Idea management software  Publish, rate and collaborate on ideas www.Brioneja.com Twitter: @Brioneja
  21. 21. Smarty Ears’ Open InnovationProgram Smarty Ears is the largest app publishing company in the segment of speech and language development.  34 total Apps  Most for iPhone and iPad but some for Android. Promotion is via Social Media and Website www.Brioneja.com Twitter: @Brioneja
  22. 22. How The Program Works  Just like in traditional publishing, there are authors to books/therapy materials and there are publishers.  Smarty Ears is the App publisher and the submitter is the author  Submitters continue to own the idea and materials they provide, and therefore they get paid royalties for it.  The final application, coding, and any art work developed belongs to Smarty Ears.  Typical contract is 5 to 10 years www.Brioneja.com Twitter: @Brioneja
  23. 23. Royalties Authors receive a royalty of 5% to 15% on all sales for their app. The amount of royalty is decided based on  Level of expertise  Amount of material provided by you to us on the creation of the app  Complexity of the application. Apps have name, bio, photo of author www.Brioneja.com Twitter: @Brioneja
  24. 24. ProgramGrowth  In the past Smarty Ears’ open innovation program was limited  Apps that Smarty Ears could not do on its own because of lack of expertise.  Today the program has expanded to include apps that Smarty Ears could do  Looking for submitters that can devote the time to Co- development and not just submit ideas.  Higher probability of success www.Brioneja.com Twitter: @Brioneja
  25. 25. Benefits of Co-Development  Submitters are passionate about their idea  They want it to be perfect  Test with their heart  Become the most effective salespersons www.Brioneja.com Twitter: @Brioneja
  26. 26. App Creation Flow Create mockup Create content  Questions Select images Create flow of product Coding Bug testing iTunes description www.Brioneja.com Twitter: @Brioneja
  27. 27. Open Innovation ProgramResults  ~10 ideas for new apps/month  1 out of 10 becomes an app.  7 new apps are a result of this process  More apps to market - faster  Recent app release from Open Innovation program “Fun and Functional” is currently on top 50 educational app list on iTunes www.Brioneja.com Twitter: @Brioneja
  28. 28. Program Lessons Win-Win Scenario  Not a one-time payment  Both the company and the submitter benefit from the success of the product % Revenue sharing goes down if author does not participate in updates with content.  Does not include bug fixing www.Brioneja.com Twitter: @Brioneja
  29. 29. Acknowledgements Thanks to Smarty Ears, LLC for allowing me to be part of this exciting new field of product development www.smartyearsapps.com www.Brioneja.com Twitter: @Brioneja
  30. 30. Contact Information Jose A. Briones, Ph.D. Brioneja@SpyroTek.com Twitter: @Brioneja www.Brioneja.com Twitter: @Brioneja
  31. 31. Resources Making Open Innovation Work. Author: Stefan Lindegaard Open Services Innovation. Henry Chesbrough A Guide to Open Innovation and Crowdsourcing. Paul Sloane The Open Innovation Marketplace. A. Bingham and D. Spradlin Open Innovation – Paradigm Shift or Program? September 21, 2009 by Suzanne Harrison Innovation Killers, 2008 - HBR http://hbr.org/product/innovation-killers-how- financial-tools-destroy-you/an/R0801F-PDF-ENG?Ntt=innoation%2520killers Stage-Gate® is a registered trademark from Stage-Gate International’s Product Development Institute Inc. www.Brioneja.com Twitter: @Brioneja

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