Open Innovation

A few months ago we embarked on what we called the Open Solutions Project with the Open Solutions Alliance (OSA). Our goal was form a collaborative group of IT customers who would work together and with OSA and thought leaders such as Bernard Golden to develop best practices and more importantly, practical use cases including the whitespace for implementing open source. Part of the idea was to invite the suppliers who make up OSA to contribute reference-able customers who could in turn share with each other their successful open source implementations.

After conductive extensive interviews with CIOs and IT executives we confirmed their interest in open source and to develop processes, best practices and risk mitigation strategies to accelerate enterprise level utilization of open source. In addition, we learned that models for implementing open source are extendable to other sources of innovation. This leads me to introduce to you the Open Innovation* Project (OIP).  Its goal is to streamline the processes and mitigate the risks of implementing enterprise IT innovation. Sources of IT innovation can come from mainstream suppliers, startups, open source, other IT organizations, government and university programs, individual contributors, and so on.

I want to share a couple of examples enabling innovation as expressed by our CIOs. The first is and example of how not to reinvent the wheel, and how to earn a return on your internal R&D.  As it turns out, SAP's 6.0 HR solution lacks the versatility to meet the needs of customers. To create a custom solution would cost a mid-sized IT organization about $1 million in custom development plus the cost of implementation and "whitespace learning". Instead of repeating the solution as dictated by silo behavior, a CIO with this problem is now negotiating with a second CIO who already solved the problem to share the solution in exchange for an investment by the first CIO in a project that would benefit both companies.

In a second example, a CIO of one of the top business schools is concerned about how to manage the risk of professors depending on small highly innovative startups where the loss of one key person could crater the supplier. Escrowing the software does not really address the problem. The CIO wants to collaborate with other business schools to find suppliers who will act as second source to these startups. In the traditional silo approach it does not generally make sense for a supplier to be a second source of a startup. However, by acting as a community with other business schools, risks can be shared and the opportunity for providing second sourcing is greatly enhanced.

These are both examples of Open Innovation* Project. The idea is to build models, processes, and risk mitigation strategies to accelerate the implementation of enterprise IT innovation. By engaging and delivering on Open Innovation, IT organizations are walking the model of the virtual corporation and leading by example the transformations necessary for their companies to thrive in the participative web. We see Open Innovation as Open Source for business. By positioning themselves around the brand leveraging both the collaboration and innovation tenants of open source OSA can be perceived a vital force of IT innovation.
* I wanted to acknowledge Henry Chesbrough for his huge contribution of virtual innovation strategies in his ground breaking book, Open Innovation. While his focus was enterprise R&D strategies, my vantage point is about business processes for the virtual enterprise.