Open Service Innovation
Henry Chesbrough, world-renown scholar who coined the term open innovation unveiled the idea of his next book “open service innovation” at the opensource.com webcast sponsored by Red Hat community service together with one of management guru, Gary Hamel. I particularly like these two scholars because of their creative but also inspiring perspective stems from the industry experiences at the trenches.
Henry mentioned about the commodity trap from the examples of Motorola and then Nokia.
Henry Chesbrough, world-renown scholar who coined the term open innovation unveiled the idea of his next book “open service innovation” at the opensource.com webcast sponsored by Red Hat community service together with one of management guru, Gary Hamel. I particularly like these two scholars because of their creative but also inspiring perspective stems from the industry experiences at the trenches.
Henry mentioned about the commodity trap from the examples of Motorola and then Nokia.
He articulated the Porter’s value chain and explained that Porter’s value chain which put the services at the tail of the chain was wrong. He claimed that service should be placed at the center of value chain to differentiate the competitive landscape, and perhaps by devising the different business model towards more lucrative businesses.
First thing come to my mind at this moment was, innovator dilemma expressed from Clayton M. Christensen. Great company focused on relationship with current customer, hence often to neglect the disruptive technology or innovation. Motorola and Nokia focused on operational excellence to compete against market share, whereas Google and Apple crafted the strategic positioning through the shaping of platform based service business model.
Henry described the so-called a “service value web”, in which customer experiences were centered around the cycles of value activities.
He also exampled the case where service view of transportation has unlocking the hidden business value. If transportation was viewed as service from the inception, untapped large amount of parts became a source of value. Henry attempted to explain this differentiated value proposition by illustrating the term as “utilization differential”.
Argument here is, how can you sustain differentiation in services? The answer is, service platform. Service platform can sustain the differentiation. Certainly iPhone and Android would be a great manifestation of this. Henry showed the UPS, Amazon, and TSMC foundry Semi conductor business as a examples of service platforms.
My impression? This is nothing new to me. But I think this is natural consequences after the open business model debut if we take into account the rising tide of iPhone and SW service or networked business model. All of these stems from the flourish of external network effect and increasing return cycle of effect in ICT environment. Given the consideration that Henry’s main researches are Open Innovation, Open Business Model and Service Science, it is expected to augment to these service area, and in fact, it is timely and smart approaches to augment the research into the platform based service spaces.
Henry described the so-called a “service value web”, in which customer experiences were centered around the cycles of value activities.
He also exampled the case where service view of transportation has unlocking the hidden business value. If transportation was viewed as service from the inception, untapped large amount of parts became a source of value. Henry attempted to explain this differentiated value proposition by illustrating the term as “utilization differential”.
Argument here is, how can you sustain differentiation in services? The answer is, service platform. Service platform can sustain the differentiation. Certainly iPhone and Android would be a great manifestation of this. Henry showed the UPS, Amazon, and TSMC foundry Semi conductor business as a examples of service platforms.
My impression? This is nothing new to me. But I think this is natural consequences after the open business model debut if we take into account the rising tide of iPhone and SW service or networked business model. All of these stems from the flourish of external network effect and increasing return cycle of effect in ICT environment. Given the consideration that Henry’s main researches are Open Innovation, Open Business Model and Service Science, it is expected to augment to these service area, and in fact, it is timely and smart approaches to augment the research into the platform based service spaces.
If you want to see this webcast, please visit here to watch the 1 hour presentation with Q&A from Henry Chesbrough and Gary Hamel. But I think you are required to register to join this webcast.
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