Methods and Tools for Enterprise Innovation in the Networked Economy: a Knowledge-centric

Approach.

Michele Missikoff

LEKS, CNR-IASI

Polytechnic University of Marche, Ancona 1

London, City University, 19 June 2012

Engineering (It)

BIBA (De)

BOC (At)

ATOS (Es)

CNR (It)

UnivPM (It)

TAL (UK)

SRDC (Tr)

AIDIMA (Es)

Loccioni - GI (It)

Creditis

• Large part of the content of this talk has been elaborated within the European Project BIVEE: Business Innovation in Virtual Enterprise Environments.

•BIVEE is a 3 years project (ends Aug 2014) with 4.3 M€ budget and 10 partners :

Proceedings: http://ceur-ws.org/Vol-864/

Innovation in the Context

Current Scenario – The world, and Western economies in particular, are traversing a critical phase that requires to enter an era of deep changes

The changes will take place along three main dimensions:

• The technology dimension

• The socio-economic dimension

• The political dimension (... but I’ll skip this ;-) 3

Technology dimension

Among the key technological innovations of the last period, we may cite:

• Cloud Computing,

• Service Oriented Architectures (SOA) and SaaS (Software as a Service),

• Internet of Things and Smart Objects,

• Semantic Web, ontologies, and Linked Data

• Social Media, entering in the enterprise world

4

Socio-economic dimension

• Western countries cannot continue to grow at the rate of the previous decades

• The current development model has reached an end

• Continuous growth of production and consumption (and waste disposal) is unbearable

• New value systems are emerging (ref. Stiglitz, Sen, Fitoussi report; S.Latouche and the ‘graceful degrowth’)

• Towards a development model where the quality of life is loosely connected to the possession of goods

• Innovation need to be re-considered in light of the above concerns 5

Vision

• To overcome the crisis, EU enterprises need a deep change

• Introducing continuous improvement and innovation to remain competitive in the globalised economy

• Sustainable Innovation rather than expansive innovation

• Focusing on Enterprise Software – Vital infrastructure for businesses and socio-

economic systems, but … – ‘hindering factor’, wrt the speed and flexibility

required by markets and business innovation • We need to put Knowledge in the center, to guarantee • Continuous alignment of Business needs and

Enterprise Software Applications in ever changing enterprises

1. What is Business Innovation?

Business Innovation is a designed, managed transformation of some aspects of the enterprise (or the society, the city, etc.) aimed at a substantial improvement of:

• the quality of delivery products (goods, services) and the customer satisfaction,

• production processes and workers satisfaction

• cost reduction and/or revenue raise

• In a sustainable way (respectful of working conditions, social context, environment, ...)

7

Business Innovation: Where?

• Products (goods / services) • Production / Admin processes • HR competencies, skills, capabilities • Organization models, with new delegation patterns • Enterprise information organization and flow • Markets and marketing styles • Customer relationships • Suppliers and partners strategies and management • Technology adoption, deployment, renewal strategies and

practice • Financial and control styles, methods, and tools • Quality of working life and ambient • Relationships with the territories, the people, the

environment, local cultures 8

Business Innovation: How? Scope

Business Innovation: Goods, Services, Processes with ICT

Approaches

push-mode and technology driven, when generated on the supply side;

pull-mode and demand driven, when requested by the market/demand side;

co-creation, when all the stakeholders cooperate together to generate product or process innovation.

Endogenous, when ideas come from within the Ecosystems

Exogenous, when ideas come from the rest of the World

Enabling Business Innovation

• Create the right environment, working conditions • Grassroots innovation (beyond Toyotism ...) • Open innovation (but controlled), with systematic and

ad-hoc relationships with – universities , research centres, partners, suppliers and

customers

• Facilitate info / knowledge / ideas circulation within and outside the enterprise

• Culture of cooperation (rewarding system) • Scouting

– Technology – Market – Excellence centres

• Observatories on opportunities, problems, threats, ... 10

On the Nature of Business Innovation

• Innovation ... Is it a process? • What is its relationship with Knowledge

Management? • What is its relationship with Change

Management? In essence, it is a Transformation, but in a rather

fuzzy context: • Fuzzy starting point (we never fully know the

reality) • Fuzzy ending point (is there an end ...?) • Uncertainty on how to get there ...

11

The Nature of Business Innovation

• Whatever you innovate, firstly you change your behaviours

• Knowledge Management is not sufficient • You need Knowledge at Work (pargmetics)

KW • Knowledge capable of modifying your working

style, your environment, your culture, ... – HR continuous training, formal and ‘on the job’

• In the Enterprise, KW will modify your organization, BP, Info Flow, ... the Value Production Space

12

Innovation New Knowledge

Knowledge about

• enterprise and its organization

• competencies, skills, and capabilities

• problems and improvement opportunities

• products and services

• Knowledge about the production processes, methods

• Technologies, systems, and resources

• Markets, clients, partners and competitors

13

Enterprise Model 4 BusInnov

14

BUSSINESSinnovation

STRATEGYinnovation

MARKETINGinnovation

PRODUCTinnovation

SERVICEinnovation

PROCESSinnovation

TECHNOLOGYinnovation

ORGANIZATIONALinnovation

(Scource: BIVEE Deliverable D2.1 – BIMF: Business Innovation Modeling Framework)

Innovating Innovation

• Towards Open Innovation

• A systematic approach to Innovation, nurturing creativity and ideas generation

• Innovation as intangible goods

• ‘Manufacturing’ approach to Innovation

• The need of new production/organization models

• Virtual Innovation Factory (VIF), operating in the Innovation space

15

16

Virtual Innovation Factory

Bus Value Chain

Raw

Materials,

Spare Parts

Final

Product

K Value Chain

Raw /

Enabling

Knowl

New

Working

Knowl The learning Organization

(intangible dimension )

(concrete

dimension)

(Frame, Saddle, Wheels, Speed-Shift, ... )

(MountainBike, CityBike, ...)

Onto KR Buz Data

Real world enterprise

Organising Open Innovation

17 (http://opensource.com/business)

• Traditional organization models are too rigid, not suitable for creativity and innovation

• Breaking the schemes, subverting the hierarchies • New approaches also for the protection of

intellectual property rights (IPR)

Business Innovation Space

• The (often unpredictable) Innovation paths

18

Innovation

link Innovation

Unit

??

path

unit

• Is Innovation a PROCESS? How repeatable?

Production space transformation

19

PPx

PPx’

Value Production

Space with old

Production Process

X

Innovation Space

yielding new PM

Value Production

Space with new

Production Process

X’

DocSet X

DocSet X’

Innovation as a Meta-Transformation

• Production process transforms the reality

• Innovation transforms the production process, to achieve: – A new (or renewed) product

– To produce in a new fashion

– To produce for a new market ...

Innovation

=

Designed Enterprise Transformation

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Designed Enterprise Transformation

DET =

• Set of Enterprise Goals (EG)

• Current Organization (CO)

• Current Enterprise Processes (CEP)

• Current Products and Services (CPS)

• Current Adopted Technologies (CAT)

• KPIs on the above (KPI)

DET: Transformations that make EG true (or ‘sufficiently’ approximated)

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Transformation

Products and services

• DET(CPS) New Org (NPS)

Enterprise Processes

• DET(CEP) New Enter Processes (NEP)

Adopted Technology

• DET(CAT) New Adopted Tech (NAT)

Inducing therefore, organizational changes

• DET(CO) New Org (NO)

det(cps, cep, cat, co)

eg(nps, nep, nat, no) = ‘true’*

22 (* or above a given fuzzy threshold)

What is BIVEE?

• A Virtual Enterprise Environment, to be integrated with existing Enterprise Software Applications (ESA)

• Distributed, collaborative, knowledge-intensive framework

• A Platform for networks of networked, interoperable virtual/real enterprises

• To be used directly by Business Experts, pushing for disintermediation (wrt techies) in innovation KM

• Innovation Observatory to push Open Innovation:

– involving the largest number of people (Crowdsourcing)

– Exchanging information with the rest of the world (universities, international research labs, etc.)

Document-centric approach

• Towards a full digital enterprise, all relevant information is digital (see UDE: Unified Digital Enterprise, FInES Research Roadmap)

• Everything is documented, by people for people • What is not documented does not exist ... !!! • The enterprise knowledge is captured by a wealth

of document collections (Pre-KB) • Documents need to be semantically enriched • Partitioning the Knowledge Space according to

– document categories – Knowledge categories (ontologies)

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Enterprise Doc Categories

• Business Doc: describe the business transactions (invoice, Req for Quotation, Order, ...)

• Actors & Roles Doc: describe the competencies, skills, and capabilities, useful invalue production (Yellow Pg)

• Domain Doc: capture the industry sector (Catalogues, BoM, ...)

• Process Doc: describe the production process (plan, build, manange, ...)

• Performance Doc: describe the indicators and the measuring methods, to keep performance under control (measurmenet methods, KPIs, ...)

• Report Doc: all the base studies and reportes necessary for value production / innovation (technical reports, Feasibility studines, market analysis, ...) 25

Semantic Doc Management

• Semantic Descriptors of Docs are the missing ring between humans and computers

• Docs give account of entities, phenomena and manifestations that make sense for humans (tech experts, business people, customers and suppliers, etc.)

• We need to make such knowledge fully available to computers ...

Let’s go semantics 26

Enterprise Ontologies

• Enterprise Ontologies will reflect the knowledge originated within the Enterprise, gathered in the Enterprise Docs

• Enterprise Doc are generally complex structure whose semantics cannot be captured by a single ontology

• There will be primary ontologies and complementary ones

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The DocOnto Constellation

Each ontology is used to define the structures of corresponding docs, supporting the generation of the related doc instances (KRO: Knowl Resources Onto)

• DocOnto – Documents and Reports Ontology • BusOnto – Business Ontology • DomOnto – Domain Ontologies • ProcOnto – Process Ontology • PerOnto – Performance Ontology • AROnto – Actors & Roles Ontology Besides the DocOnto, that defines the structure of the

documents, the other ontologies participate in ‘semanticise-ing’ the content, with different points of view.

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Production Doc Annotation

29

OrderNum5796

GREBECO – Calle Sol, 23 18003 –Granada (Spain)Ph. 958203734 Fax. 558282885Email: info@grebeco.com

Date: 11-08-05

Seller Info

PERMASA GroupPedro Texeira, 8 28020 – MadridPh. 913301003 Fax. 913301005Email: info@permasa.esTax number: G12345678Contact: John Smith

ProductCode

Quantity ProdUnitCost(€)

ON229 Wardrobe 49*99 2 78.00

OP328Sheft unit panel60*175

1 59.00

OP481 Rear panel 2 20.00

OP873 Bunk bed ladder 1 21.00

OP874Upper bed for ayouth bedroom

1 65.00

Total(€) 341.00

Buyer Info

DescriptionAROnto

DocOnto DomOnto

Purchase Order

BusOnto

Semantic Descriptor

30

The ‘missing link’ between human-oriented documents and computer-oriented knowledge management.

Organization of a Semantic Descriptor - Header: metadata - Domain Specs Content - Related K Resources: links to other SD (e.g.,

previous doc) - External Links

Innovation Doc: Feasibility Study Is the Innovative Idea (of, e.g., a new product) viable?

• Technical feasibility – Design outline: structure, functions, expected

effectiveness

– Material costs, Production costs

– Enabling technology

• Business feasibility – Potential market penetration, Production volumes

– Competitors and Market leaders

– Value proposition, business model, and SWOT, profitability

• Organizational feasibility – Competencies and Capabilities

– Partnership and Suppliers

– Resources estimation: time and financial viability

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DomOnto

Annotating a Feasibility Study

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DocOnto

BusOnto

AROnto

Tech-F

Bus-F

Org-F

Feasibility Study and its sections

From Reality to Virtualy

33

Real World

RW Docs

ProData DB

Semantic Annotation

Sem Descriptors

Innovation needs managed chaos

• Beyond processes ... Waves

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Feasibility Prototyping Engineering

Work Intensity

T Creativity

(drawing extracted from BIVEE Deliverable D2.1)

Virtual Innovation Factory

35

Whiteboard

InnovationDiary

Doc Network

W1 W2 W3 W4

DocOnto DomOnto BusOnto

PerOnto

!

Idea

AROnto ProcOnto

Final Innov

A platform for open Innovation

Social Semantic Knowledge Managemet Platform

Social – open to all (up to IPR)

Semantic – a rigorous bases for:

Knowledge – any form of enterprise knowledge: documents, minutes, reports, videos, image, ...

Management – advanced services to allow managers and innovators to keep under control the evolution of the venture

Current experimentation: Semantic MediaWiki Plus

36

Conclusions

• The main ideas on a new approach for Innovation have been presented

• Future innovation needs to be addressed as a Knowledge Management venture

• But traditional KM is not suited for the purpose

• We need to revisiting the existing KM solutions

• Ontologies and Semantic Wikis are promising tools, together with social media and cooperation tools (in Open Innovation)

• But human intelligence and creativity remains the key pillar

37

Thank you for your attention

Wake up ... Questions? 38