The New HR The Savvy Strategic Partner

Week 8 DQ 1 and 2/1. Lerning Resources.docx

Required Readings

Euchner, J. A. (2010). Two flavors of open innovation. Research-Technology Management, 53(4), 7–8.

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Note: You will access this article from the Walden Library databases.

 

Henry Chesbrough defined open innovation as breaking down the boundaries of the corporation so that valuable ideas can come from inside or outside the company. Ideas can go to market from inside or outside the company, as well. Open-source innovation requires three large changes in corporate innovation thinking, each of which is difficult. Open-source approaches to innovation require business models that can survive in a more open world.

Wreden, N. (1999, November 15). Navigating uncharted waters. InformationWeek, (761), 138–140.

Note: You will access this article from the Walden Library databases.

 

Most outsourcing arrangements derail over issues that are not adequately explored during negotiations or defined in contracts. The author presents a case study where the most difficult issue revolved around implementation ownership – lessons learned.

Optional Resources

Soylu, A., & Thomas, B. S. (2010). Strategic human resource management in the global environment. International Journal of Management Perspectives, 2(1/2), 1.

 

Week 8 DQ 1 and 2/Discussion 1 & 2 (Required DQ).docx

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Course: DDBA 8580 The New HR The Savvy Strategic Partner

Discussion 1: Looking Forward

In trying to decide what to expect from a friend in a given situation, you might look back at your history with that person for clues. Similarly, you might look at the history of HRM in order to forecast future trends.

By Day 3 of Week 8

Post a response to the following: ( 1 Page)

· In looking forward, if today gives us any sense of what works in creating capacity in organizations using innovative and collaborative efforts (networking), versus isolation strategies, what should we expect in the next 10 years?

· How should HR leaders position themselves for this emergence?

· Explain with whom HR should strategically partner internally to advance an organization’s understanding and readiness?

Discussion 2: Final Course Reflection

By Day 5

Post a response to the following: (200-300 Words)

· In reflecting upon key lessons derived from this course, in content, discussion, and opposing views, what pivotal insight(s) have you identified that will change the way you practice or approach your work?

· This can be the way you work as a leader either within the practice of HR, or within a closely related leadership role requiring similar knowledge and expertise.

By Day 6

Respond to addressing one or more of the following summative considerations:

(200-300 Words)

· As a final thought for the course, think about how you would integrate the information you have learned in this seminar into a philosophy of strategic HR efforts.

· Have your viewpoints changed from when you first began this course? Discuss how your viewpoints changed, if at all, and why.

Required Readings

Euchner, J. A. (2010). Two flavors of open innovation. Research-Technology Management, 53(4), 7–8.

Note: You will access this article from the Walden Library databases.

 

Henry Chesbrough defined open innovation as breaking down the boundaries of the corporation so that valuable ideas can come from inside or outside the company. Ideas can go to market from inside or outside the company, as well. Open-source innovation requires three large changes in corporate innovation thinking, each of which is difficult. Open-source approaches to innovation require business models that can survive in a more open world.

Wreden, N. (1999, November 15). Navigating uncharted waters. InformationWeek, (761), 138–140.

Note: You will access this article from the Walden Library databases.

 

Most outsourcing arrangements derail over issues that are not adequately explored during negotiations or defined in contracts. The author presents a case study where the most difficult issue revolved around implementation ownership – lessons learned.

Optional Resources

Soylu, A., & Thomas, B. S. (2010). Strategic human resource management in the global environment. International Journal of Management Perspectives, 2(1/2), 1.

Week 8 DQ 1 and 2/Navigating Uncharted Waters.pdf

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Navigating Uncharted Waters — Flash Electronics Found That Dedication To Detail During Contract Negotiations Pays Off Author: Nick Wreden Date: Nov. 15, 1999 From: InformationWeek Publisher: UBM LLC Document Type: Article Length: 1,141 words

Abstract: Flash Electronics Inc chose Applicast to host, support and administer its SAP R/3 installation. Determining who would pay for hardware upgrades had been a difficult point in negotiating the contract, and Flash CEO Matthew Liu eventually agreed that the customer would pay in order to ensure that unexpected costs would not hurt future budgets. The intense negotiations are typical of the enormous effort application-hosting outsourcing can require, according to analysts, who say the time is well spent. Dedication to detail is a critical factor in long-term success, and most outsourcing arrangements fail because companies do not explore all crucial issues or define them in the contract. Flash is an outsourcing provider itself, manufacturing electronic products for Nokia and others, and Liu, aware of the benefits, worked out a pioneering three-year contract mapping out terms almost unknown in the industry. Observers say pricing and performance are the two key outsourcing issues.

Full Text: Matthew Liu sat at his desk to review once more the marked-up outsourcing contract with Applicast Inc. Liu, CEO of $40 million Flash Electronics Inc., wanted Applicast to administer and support the SAP application he had purchased. After all, Applicast was chosen for its full-service ability to support and deliver SAP applications. For two months throughout the fall of 1998, the 25-page legal document was passed between the two companies to settle issues such as performance measurements, service-level agreements, and, most important, an exit strategy. The snag: Who would pay for required hardware upgrades?

Not wanting unexpected costs to affect future budgets, Liu eventually agreed to pay for the upgrades as part of Applicast’s monthly service fee. But the intense contract negotiations over such details illustrates the huge effort it often takes to find the right application- hosting provider and ensure a successful relationship. The process required hundreds of hours for Liu, who even interviewed support personnel at the application-hosting candidate firms as part of his due diligence.

According to analysts, this is time well-spent; such dedication to detail is critical for long-term outsourcing success. Most outsourcing arrangements shipwreck on the shoals of issues that aren’t adequately explored during negotiations or defined in contracts. These include the negotiations over response times, availability, and such soft metrics as “innovation” or “business-process improvements.”

“Too many executives, under pressure for an immediate solution, don’t go through appropriate risk analysis,” says Dean Davidson, program director at the Meta Group. “What if core technologies aren’t delivered? What if service is inconsistent or doesn’t meet expectations? Determining these issues up front can avoid communications gaps that later create problems or lead to dysfunctional relationships between the vendor and customer.”

Liu knew the benefits of outsourcing, especially since companies such as Nokia often outsource electronics manufacturing to Flash’s Fremont, Calif., facility. When a previous material requirements-planning system was unable to keep up with its fast-track growth, Flash purchased a complete enterprise resource planning package from SAP. But with a two-person IT staff and budgets that had to be dedicated to manufacturing equipment, not IT infrastructure, Liu knew he could not afford SAP implementation and support for just 21 users. He estimated the break-even point for bringing the SAP application in-house at 60 users.

The three-year contract that Liu and Applicast CEO John McGrory worked out is pioneering in many ways. A lot of unknown terrain, such as best practices, still needs to be mapped out, and the field of “packaged applications outsourcing” is relatively small-it’s expected to reach $21 million by 2001, according to Forrester Research. Phil Wainewright, managing editor of ASPnews.com, which tracks the emerging application service provider industry, faults application-hosting providers-many of which are just out of the venture-capital blocks-for not doing a better job with customers. “Customers have to ask about key issues because, in some cases, service providers have not even thought about them,” he says.

The two key issues when negotiating contracts involve pricing and performance, says Richard Raysman, managing partner of Brown, Raysman, Millstein, Felder & Steiner LLP, which specializes in outsourcing and other technology issues. Raysman says customers sometimes think they have a fixed-fee arrangement, but are surprised by contract exclusions, such as fees for higher-than-expected transaction volumes or new development charges. Defining service levels and measuring improvements also consume negotiating time.

McGrory says the most difficult issue revolves around implementation ownership. Although Flash owns the SAP license, it was concerned about the rights to implement changes, such as alterations to a shipping module. “A lot of proprietary business processes are captured. Customers want to make sure they own what is theirs, even though they don’t have possession of the software,” he says. Applicast tries to structure its deals so that it owns the templates and technology, while the customer owns every instance of it.

Another issue centers on service-level agreements: Which problems require a 15- minute response time, and which can wait for routine maintenance? What are the procedures for keeping customers informed? Applicast works from a generic service-level agreement for two to three months, then revises the pact according to the experience gained. In his negotiations, Liu emphasized specific definitions of responsibilities, down to specific positions, and performance measurements. Other issues included backup, maintenance, security, and Y2K compliance.

Liu’s overriding concern was an exit strategy-a lot could happen in three years. Liu and McGrory spent considerable effort working out the details of various scenarios that would let Flash recover its code quickly.

Although contract negotiations are important, Wainewright cautions against letting legalities alone define a relationship. “It’s like a prenuptial agreement,” he says. “You want to be safe, but you really want the relationship to work without having to fall back on a contract.” Rather than depend on the penalties outlined in the contract, Liu says he prefers the incentive of a good referral in an increasingly competitive business.

The intense initial effort Liu put into investigating providers and negotiating the contract has paid off. “Now we can grow faster without any operational limitations,” he says. Not only is SAP an operational success since going live in March within the facility, but Liu’s staff needs to spend only 5% of its time on ERP outsourcing issues.

At A Glance

Flash Electronics

Operations

outsourced

All major modules of SAP, including manufacturing, financials, sales, and distribution, to enable rapid business expansion, minimize internal IT staff requirements

Outsourcing provider: Applicast

Contract terms Three-year contract; monthly operations fees

Results

SAP deployment in less than half the usual time; ability

to expand as business grows

ASP vs. Outsourcing

ASP Model

– Service provider runs application and

infrastructure

– Client adapts business process to application

– Pricing scales with number of users

– New business needs drive application decision

Traditional Outsourcing Model

– Client maintains control, but can pay per user, per month

– Application customized to client’s operations

– User directs change

– Business needs drive decision

Copyright [copyright] 1999 CMP Media Inc.

Copyright: COPYRIGHT 1999 UBM LLC. All rights reserved. No part of this information may be reproduced, republished or redistributed without the prior written consent of CMP Media, Inc. http://www.ubm.com/home Source Citation (MLA 8th Edition) Wreden, Nick. “Navigating Uncharted Waters — Flash Electronics Found That Dedication To Detail During Contract Negotiations

Pays Off.” InformationWeek, 15 Nov. 1999, p. 138. Gale Academic OneFile Select, https://link.gale.com/apps/doc/A57617809/EAIM?u=minn4020&sid=EAIM&xid=e27c48eb. Accessed 19 Oct. 2019.

Gale Document Number: GALE|A57617809

Week 8 DQ 1 and 2/Strategic human resource management in the global environment..pdf

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Week 8 DQ 1 and 2/TWO FLAVORS OF OPFNINN01MFI0N.pdf

FROM THE EDITOR

James A. Euchner

TWO FLAVORS OF OPFNINN01MFI0N Since Henry Chesbrough published Open Innovation (2003), the paradigm he described has been a subject of great interest and experimentation in corporations. Ches- brough defined open innovation as breaking down the boundaries of the corporation so that “valuable ideas can come from inside or outside the company and can go to market from inside or outside the company, as well.” He contrasted this open paradigm with the more-traditional closed innovation paradigm based on the captive R&D laboratory.

Chesbrough’s work encouraged companies to create porous innovation pipelines and to become more aggres- sive about licensing, working with start-up companies, spinning out concepts that don’t fit with the core business, and partnering with other organizations to produce inno- vations. These approaches have created increased value for firms as diverse as P&G and GE, but they may be only the start of the redefinition of innovation. The emergence of open-source intellectual property (IP) and online com- munities for innovation and customer input is forcing continued rethinking.

Open innovation approaches are designed to source new technology and concepts broadly, seeking the seeds of the next innovation both within and outside of the corpo- rate firewall (see, for example, Slowinski et al. 2009). Such initiatives are often supported by companies like In- nocentive or Gen3 Partners, which help to frame the problem, connect the finn with external sources of exper- tise, and manage resulting IP. Control of the IP is a criti- cal part of the management model. Similarly, control of the innovation process itself remains with the firm, which defines priorities, chooses how to source them, selects providers, and integrates them into its product roadmap. Open innovation stretches the role of R&D in

Jim Euchner is editor-in-chief of Research-Technology Management and a visiting scientist at the Massachu- setts Institute of Technology Sloan School of Manage- ment. He previously held senior management positions in the leadership of innovation at Pitney Bowes and Bell Atlantic. He holds an MS in mechanical and aerospace engineering from Princeton University and an MBA from Southern Methodist University, euchner@iriweb.org

important ways, but it operates within the current man- agement paradigm. Open-source innovation, on the other hand, redefines the corporation itself. Two critical factors distinguish the approaches: the treatment of intellectual property and control of the direction of innovation.

Open-source innovation is a more radical model that is increasingly important in the development of everything from software to sports equipment. Economic research indicates that it may soon dominate corporate innovation in a steadily increasing number of fields. It is best known today in software development, where open-source soft- ware projects such as Linux and Apache are both commu- nities and platforms that enable users to develop and share code that they need. In the open-source software model, there is no owned IP. Anyone can access, use, and modify the code. A large, and largely anonymous, crowd contrib- utes to the development of the software. Although there are governance structures for deciding which code is in- corporated into which release of the software, it is users, acting both individually and as a community, that decide what gets worked on. The users, therefore, dictate the di- rection of the product. Open innovation in this context means open governance, open IP, open direction.

Open-source innovation requires three large changes in corporate innovation thinking, each of which is difficult. First, it requires that firms take a modified view of IP, trading patent control for other sources of competitive advantage (speed, customer intimacy, voluntary contri- butions to the product). This can be threatening to the corporate R&D structure: creating, managing, leverag- ing, and controlling IP has long been a central function of R&D, and it continues to be under both open and closed innovation models. Opening IP is countercultural, more countercultural even than “open borders” innova- tion, but it has the potential to open doors to even great- er customer engagement and value.

Second, an open-source mindset requires shifting the locus of control of new product directions closer to the user community. This is also challenging. Even in open innovation models, it is a central role of product management and marketing to make these decisions. But the world is changing. Online networks greatly

I July—August 2010 ()K’)5-(i.ï()K 1().S5.OÜ I 20111 liiiJi]>,iriiil Research Institute. Inc.

increase the potential for engaging customers in real time, shifting the locus of control of innovation away from producers and toward user communities. At times, as Eric von Hippel describes in Democratizing Innovation (2005), networks have enabled users to radically redefine the role of the firms that supply them.

Finally, open-source approaches to innovation require business models that can survive in a more open world. These models are only now emerging. They start with a true understanding of the ways in which community contributions can add value. Astute businesses use this understanding to create platforms that allow their user community to innovate—whether through technology platforms (like the Android smartphone platform), cus- tomer platforms (like open-source software), or plat- forms for fulfilling designs created elsewhere. Often, an open business model will also include a heavy dose of support services to supplement freely available products.

As online communities continue to emerge, and as the pace of change fundamentally reshapes the power of IP, the role of R&D and approaches to innovation within corporate structures will continue to evolve. Changes that simply open up corporate borders to innovations developed elsewhere will not be enough to keep up. Corporations increasingly need to consider open-source innovation, which involves much deeper changes to cor- porate culture and innovation practices than have been embraced to date.

References

Chesbrough, H. 2003. Open Innovation: The New Imperative for Creating and Profiting from Technology. Cambridge. MA: Harvard Business School Press.

Slowinski, G.. Hummel, E., Gupta, A., and Gilmont, E. R. 2009. Effective practices for sourcing innovation. Research-Technology Management 52( I ): 27-34.

von Hippel, E. 2005. Democratizing Innovation. Cambridge, MA: MIT Press. Available online at http://mit.edu/cvhippel/www/ democl .htm (accessed May 25, 2010).

RTM Article Awarded Emerald Citation of Excellence

Emerald Management Reviews has awarded a Citation of Excellence Award to “Creating a Winning R&D Culture-I” by Greg Stevens and Kurt Swogger. The article appeared in the January-February 2009 issue of Research-Technology Management.

Emerald Management Reviews is an abstracting and indexing database that covers every article in the top 400 business and management journals. Each year the Emerald Management Reviews Accreditation Board, comprised of management experts from industry and academia, selects the world’s top 400 management titles. Independent subject experts then make a thorough and rigorous assessment of every article in each of these journals. The result is a database of article reviews and citations covering the range of management topies. For an author, inclusion in the database is a notable achievement.

Of the over 15,000 articles Emerald reviews each year, just 50 are selected for a Citation of Excellence. The award brings with it peer recognition that can result in increases in research funding.

Research • Technology Management

Copyright of Research Technology Management is the property of Industrial Research Institute, Inc. and its

content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s

express written permission. However, users may print, download, or email articles for individual use.

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