Let’s get down to brass tacks. What is the purpose of innovation for many companies? Is it to advance technology? You could say that. Is it to create a better world? That’s definitely the purpose of many R&D projects. But why do most companies choose to innovate?
The answer is to achieve more financial success.
Investors, CEOs, and employees all invest a great deal of time and/or money into innovation. It’s hard work, can be time-consuming and is riddled with setbacks. What keeps them moving forward in their pursuit of innovation is the little light at the end of the tunnel: returns. It’s the return on these investments that keeps organizations going, so why wouldn’t you want an innovation process that promises the greatest return on your time and money.
How Open Innovation Maximizes ROI
No investment can guarantee returns 100% of the time, and no innovation project is guaranteed to succeed, but in a game of numbers, maximizing your odds is essential. Open innovation increases the chances of success, reduces risk and maximizes ROI by its very nature.
What is the true ROI potential of open innovation? There are benefits to be gained by taking full advantage of this revolutionary process.
The quantifiable cost savings of using open innovation over traditional methods are the result of the “pay for performance” model of open innovation challenges that are created by InnoCentive. As an investor in open innovation, you pay a small fee and then a reward to the solver/s whose ideas you deem worthy of pursuing. This is a significant cost savings over the time and money you will spend pursuing ideas through traditional channels.
Cost savings are also found by increasing productivity of internal employees. By transferring some of the innovation responsibility to the crowd, your internal employees are able to shift their focus to other initiatives, allowing for a faster and more cost-effective supplemental research process via open innovation to take the brunt of the work away from internal employees.
Many other cost savings include:
- IP transfer and licensing efforts (InnoCentive handles this process for you).
- Efficiency savings for the organization as a result of successful Challenges (open innovation challenges have a higher success rate.
The ROI provided by open innovation extends far beyond the numbers that can be added up. There are many non-quantifiable benefits to the process. Open innovation:
- Fosters a more innovative research culture within the organization.
- Increases innovation success rates.
- Grants organizations access to professionals who are experts in new fields and can provide unique solutions.
- Evolves and enhances an organization’s innovation capabilities through facilitation of cultural change and producing new ways of innovation.
- Improves internal collaboration and the research process.
- Allows organizations to work swiftly and become more nimble with available resources.
- Creates a less stressful environment for employees that boosts production.
For more information on the powerful ROI that can be achieved through open innovation and InnoCentive’s Challenge-Drive Innovation process, read our case studies with clients like Syngenta and Essity.