Leveraging the Benefits of Open Innovation

Open innovation is innovation where companies or organizations reach out to other companies, individuals, and the general public to create innovative products and services. The internet has made this type of innovation far more feasible than it once was. Knowledge is widely distributed, and relying solely upon internal research can limit an organization’s innovative capacity. Open innovation has helped advance many industries, including IT, healthcare, and even public policy. Here you can learn the benefits of open innovation for your business and how this collaborative approach can unlock new opportunities.

Benefits of Open Innovation

An example of open innovation that everyone is familiar with is the mobile device platform. Both Android and Apple have created platforms that encourage app development. That has resulted in huge numbers of apps that people use in countless aspects of everyday life and business. Connecting internal organization resources with external ones to innovate produces many important benefits, including better products and services, lower research costs, better risk spread, and faster time-to-market.

Better Product and Service Offerings

Open innovation can lead to improvements in existing products and services or the development of completely new ones. For startups, in particular, getting that first product to market can lead to reluctance to invest more time. Resources yet another new product right away. Open innovation makes such an endeavor both less expensive and less risky. Think of how the world of apps has influenced phone and tablet makers to improve their hardware specifications over the years to meet consumer demands.

Lower R&D Costs

Today’s businesses must invest proportionally more in research and development than companies of earlier generations did, just to achieve the same level of results. Spending R&D resources wisely is imperative. And open innovation supports R&D while keeping costs under control. Drawing on the ideas of external partners like startups, individuals, or colleges and universities costs less while opening up organizations to new ideas that may never have been conceived under more restrictive internal innovation models.

Better Risk Spread

Risk always accompanies innovation, including open innovation. However, open innovation helps mitigate risks by sharing it among multiple organizations. For one thing, multiple stakeholders invest their resources in open innovation initiatives. And they want their risks to pay off just as much as the originating organization does. Additionally, the multiple viewpoints that open innovation involves can help reduce the chances of innovation going wildly off-track.

Faster Time-to-Market

Internal innovation is a stepwise process that must be carefully managed at every step. A budget hiccup could halt a project instantly, and innovations must all be tested carefully in-house. It not only costs more, but it takes longer. As a result, the time to market an innovative product can be longer than expected.

Open innovation, by contrast, accelerates time-to-market. Because you can do many tasks in parallel, by multiple organizations. This helps improvements on old products and innovative new ones make it to market faster. So capturing ROI sooner becomes possible through open innovation.

Open innovation isn’t a new idea, but it has become more popular with the advent of technologies that make the sharing of innovations and ideas easier. It is becoming a mainstream form of innovation, resulting in new kinds of partnerships. Athletic gear companies may partner with professional athletes, healthcare companies may work with economists, and technology companies may partner with colleges and universities. The resulting innovations not only make it to market faster. But often satisfy unmet or unrealized needs better than would the products of internal-only innovation.

IdeaScale gives organizations the tools they need to manage innovation at every stage, and with every type of partner. We invite you to get a demo and learn how to optimize your innovative processes.