Process Innovation
Process Innovation
Capability/Talent/Ability =
Knowledge & Skills
Sources:
Individuals
& communities
of Practice
Recall
Existing
Knowledge
Materialise ideas:
Innovate
new / improved
process flows
Virtualised Process Innovation:
Digital Services
Business Models
Explicit Knowledge
+
ICT Technology
Process Innovation Forms
eServices

Digital Workflows
+
ICT Technology
+
People Interactions
+
Physical Products
Business
Architectures
of Firms
Different business
models / operations
across locations;
connecting people &
resource networks;
trading/selling
digitally worldwide……..
Process Innovation Value Adds
eServices are hard to duplicate
 Creates sustainable competitive
product or service advantage
New business models create new
types of business organisations eg
•e-Bay or virtual shopping
•e-Newspapers or magazines
•Telemedicine models
•Internet Banks eg ING
Reading: Sony Vaio Laptop
Inquiry Q:
Method:
Findings:
Why geographic concentration of R&D is critical?
Case study analysis
Innovation is most likely
when people can be in
close proximity with each
other
Institutional Views
Social networkers’ Views
Knowledge Managers’ Views
Institutional Views
Reason 1
Collaborating for
creating/sustaining
Location Based
Competition
•
•
•
Country specific
Regional
Mix of the above
Reason 2
Enabling time to
market learning &
harnessing talents to
produce innovative
outcomes
Social Networkers’ Views
Social Network Theory
Granovetter (1985)
Knowledge Communities
Communications is embedded in
knowledge exchange
•
•
Trusted Relationships
Varying cultural contexts
drive preference for nature
& style of comunications &
K-exchange
Knowledge Managers’ Views
Tacit Knowledge Theory
(Polanyi (1966);
Nonakka & Takeuchi (1995)
and others
Tacit Knowledge
Codified (explicit) Knowledge
Digitalised
Knowledge
Influenced by interpersonal
contacts, rapport, trust,
interactions …….
Case Analysis Findings
Japanese Culture

Stable business relationships & networks

Keiretsu group - companies with interlocking
business relationships and shareholdings

Close interaction between Sony’s
production & R&D units
Case Analysis Findings
Sony’s Innovation Capacity Strength
Sharing tacit knowledge
Dynamic interaction between tacit & explicit knowledge workers
Case Analysis Findings
Sony & its Supply Chain Stakeholders
Strategic R&D Partnership in Locations that reflect
Sony’s multi-site value chain configuration strategy
Specificity of Innovation
R&D Processes
1. Strategic procurement
2. Agile product development
•
Gives additional customer
value add – watching movies,
powerful graphic design for
games, music access, etc
•
Difficult to imitate – process
innovation
•
Differentiate from
competitors’
products/services
3. Involvement of customers in
design & prototyping
Mass Production
1. Value chain strategies
development to bridge design
and mass production
• Knowledge & workflow
coordination between
designers & producers
• All related divisions
involved in knowledge
and workflow
coordination eg
marketing, executive
management, etc
2. High TQM in production
Key Success Factors
1 – Managing Complexity
Availability , integration &
management of multidisciplinary technical work to
design the product
2 – Interdisciplinary Engagement
The development project
engaged people across business
units – from executives, to
marketing & production, etc
3 – Product Proof of Concept
Prototyping & testing
involves many stakeholders
aiming for not just functional
features, but also emotional
contexts through aesthetic
concept & style
Lecture & Reading Relationship
Sony case study
•
Communications underpin R&D
knowledge exchange 
requiring people to be in close
proximity
•
Multi-disciplinary, cross
stakeholders engagement and
often multi-site process
engineering / innovation
activities are crucial to create
unique, reliably functional and
aesthetically meaningful
products