Measuring the Value of Open Innovation: Metrics, NPV and ROI

$9.00

A case study based on a presentation by Simon Hayes, Senior Director, Strategic Alliance, Cisco Systems.  Cisco Systems has created a comprehensive measurement system for Open Innovation projects and alliances. Cisco’s experience suggests that it is necessary, first, to have a consistent methodology for measuring business return – one that embraces all of the types of projects under the corporate umbrella. Cisco tracks the metrics at the project, alliance and alliance portfolio levels. According to Hayes, comprehensive NPV, across all of these levels, is the best measure when comparing one project with another. Including non-financial, strategic measures (e.g. early market entry or the opportunity to create a new standard) in your calculations is essential – it is difficult to quantify them, but estimating them is better than ignoring them. An up-to-date metrics dashboard allows for mid-course corrections, and Cisco has created an automated, frequently updated dashboard solution. Finally, it is necessary that everyone involved on both sides feel ownership over the metrics and are accountable for them. To be successful in strategic alliances, says Hayes, it is absolutely necessary to develop a sense of joint destiny with your partner.

Category: Tag:

Description

A case study based on a presentation by Simon Hayes, Senior Director, Strategic Alliance, Cisco Systems.  Cisco has created a comprehensive measurement system for Open Innovation projects and alliances. Cisco’s experience suggests that it is necessary, first, to have a consistent methodology for measuring business return – one that embraces all of the types of projects under the corporate umbrella. Cisco tracks the metrics at the project, alliance and alliance portfolio levels. According to Hayes, comprehensive NPV, across all of these levels, is the best measure when comparing one project with another. Including non-financial, strategic measures (e.g. early market entry or the opportunity to create a new standard) in your calculations is essential – it is difficult to quantify them, but estimating them is better than ignoring them. An up-to-date metrics dashboard allows for mid-course corrections, and Cisco has created an automated, frequently updated dashboard solution. Finally, it is necessary that everyone involved on both sides feel ownership over the metrics and are accountable for them. To be successful in strategic alliances, says Hayes, it is absolutely necessary to develop a sense of joint destiny with your partner.