In previous work, the author has innovation argues for the concept of open that companies should both organize their innovation processes to more openness to external knowledge and ideas and can also be more of their ideas and knowledge flow outward when not used internally. But initial discussion of open innovation is contrasted to traditional R & D and product development, which had the effect to focus more on product and technology innovation to service innovation. Open … Read more »

In previous work, the author has innovation argues for the concept of open that companies should both organize their innovation processes to more openness to external knowledge and ideas and can also be more of their ideas and knowledge flow outward when not used internally. But initial discussion of open innovation is contrasted to traditional R & D and product development, which had the effect to focus more on product and technology innovation to service innovation. Open innovation is a little different in service businesses, in part because the role of the client is different, in a service business, the customer is often involved in an iterative process with the company that results in a customer experience. In addition, innovation processes operate differently in the service sector. Few companies have formal R & D activities for the services they provide, and the customer may need to participate throughout the entire innovation process. Some of the concepts of open innovation are easy for service innovation. For example, Amazon. com has not only open service innovation by also by, for example, created “outside-in” thinking customer reviews on Amazon.com and third parties to sell products on Amazon’s website, but the “inside out” by, with internal knowledge and infrastructure to create a business selling cloud computing services to other companies. Companies are interested in moving toward open service innovation can try techniques such as the close cooperation with our customers to develop new solutions for them, to offer utility customers rather than on products, and the embedding of the company in a customer organization. Companies that have traditionally product-oriented some organizational changes, such as changing service make pricing, as they move to a service-oriented approach.
The world’s developed economies are increasingly focused on services, with services. More than 70% of the aggregate gross domestic product and employment in the Organization for Economic Cooperation and Development countries As a result, both individual companies and entire economies are faced with the challenge of how innovation in services.
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from
Henry W. Chesbrough
Source: MIT Sloan Management Review
8 pages.
Release Date: 1 January 2011. Prod #: SMR377-PDF-ENG
Bringing Open Innovation to Services HBR case solution

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