Making Open Innovation Ecosystems Work: Case Studies in Healthcare

In the mist of tightening budgets, many government agencies are being asked to deliver innovative solutions to operational and strategic problems. One way to address this dilemma is to participate in open innovation. Two Aspects of Open Innovation A recent IBM Center report, Making Open Innovation Ecosystems Work: Case Studies in Healthcare, by Donald Wynn, Jr., Renée M. E. Pratt, Randy V. Bradley explores these two aspects of open innovation: Adopting external ideas from private firms, universities, and individuals into the agency’s innovation practices Pushing innovations developed internally to the public by reaching out to external channels Open Innovation within a Technological Ecosystem To illustrate how open innovation can work, the authors employ the concept of the technological ecosystem to demonstrate that fostering innovations cannot be done alone. The author’s define an ecosystem as: "The set of individuals and organizations operating within a given market space in order to provide a complete value proposition to the end customers, who are also part of the ecosystem." Based on their research, successful technological ecosystems can be managed by paying attention to five key elements of an organizational ecosystem: Resources – the contribution made and exchanged among the participants of an ecosystem Participants - the characteristics of the participants Relationships – the relationships and interaction among the participants Organization --of the ecosystem as a whole External environment in which the ecosystem operates Management Challenges to Open Innovation However, open innovation introduces three managerial challenges: 1) an agency must be able to motivate administrators and line employees to contribute intellectual property that is developed internally to those outside their organization; 2) the agency must be able to identify and access promising ideas developed outside the organization that can benefit its internal processes; and 3) an agency must develop the capability to incorporate these external ideas, along with internal resources, to improve its innovation pro­cesses. Making Open Innovation Ecosystems Work: Case Studies in Healthcare This report posits that government agencies can increase the benefits from their open innovation efforts through the use of sponsored participation in technology ecosystems. Based on the research, government agencies can capitalize on the available benefits in one of two ways, depending on whether or not they have existing technologies around which to base an ecosystem. For government agencies with previously developed technologies or systems which are effective for their internal needs, one strategy for capitalizing on the existing technologies would be to create an ecosystem of external participants around the technology in an effort to capture the innovation that exists elsewhere. An alternative strategy is to join an existing ecosystem. The report presents two case studies from the health care sector that describes how technology eco­systems work and can effectively stimulate the development and dissemination of innovation. U.S. Department of Veterans Affairs (VA) built a new ecosystem around its VistA electronic health records software in order to better facilitate the flow of innovation practices and processes between the VA and external agencies and private firms. State of West Virginia selected a variant of the VistA software for deployment in its hospital system, saving a significant amount of money while introducing a number of new features and functionality for the seven medical facilities. Best Practices to Capi­talize on Open Innovation As a result of these studies, the authors have identified 10 best practices for agencies seeking to capi­talize on open innovation. These best practices include encouraging openness and transparency, minimizing internal friction and bureaucracy, and continuously monitoring external conditions. It is impor­tant to recognize that open source is a manifestation of open innovation in general. As such, similar issues and practices are applicable across a wide range of alternative open-innovation programs. In addition, similar results can be found in other industries. For example, the state of Georgia effectively sponsored an ecosystem surrounding an in-house developed open-source, software-based, integrated library management application. In addition, several universities (public and private) have joined forces to develop the SAKAI learning management system platform.