MIS 446 Quiz 3

Closed Platform

proprietary and may only be made and sold by its owner or via licensing agreements

can still allow for open complementary development through APIs

ex: apple ios, facebook, microsoft windowa, DVD/bluray, chatgpt

Open platform

can be made and sold by anyone

ex: linux, open office, mySQL, Java

closed innovation

mostly within a single company

firm assumes all the risk and reward of innovation

significant R&D investment, often proprietary capabilities or high levels of expertise required

Open innovation

partnering with others to share knowledge, risk, reward

develop new markets, complementary goods, and sources of innovation

allows firms to access and leverage resources/capabilities it doesn't have

VARIM: how to profit from new capabilities?

growth model: how do these new capabilities enhance growth?

Crowdsourcing

when a firm outsources a task to the public via an open call

- firm does not handle task internally

- firm does not outsource to a designated supplier

members of the public take on the task without preexisting contracts or guarantees of reward

contracts enable legality without intellectual property challenges

crowdsourcing is NOT outsourcing

Crowdsourcing vs. Outsourcing

suppose that you have a problem

- if you know how to solve the problem efficiently, you can do it yourself (closed innovation)

- if you know who can solve it, you can have that person solve it, using a contract or other agreement (Apple outsources assembling of iPhones to Foxconn)

- if you do not know who can solve it efficiently, you can crowdsource it to an undefined network (group) so that members of the crowd can self-select and solve the problem

crowdsourcing process

1. state the problem

2. crowd self-selects to solve problem

3. solution evaluation

4. reception and implementation

crowdsourcing today

grand challenges still thriving

internet has allowed crowdsourcing activities to scale rapidly

open-source era has evolved: volunteers work as communities to develop software with code that is not copyright protected

open-source benefits: skill development and signaling, recognition and status, ideology

Modern crowdsourcing types

tournament/competitive

collaborative

open innovation and citizen science

collective intelligence

crowdfunding

tournament/competitive

participants compete for a prize

xprize, chrome rewards, innocentive

collaborative

participants work towards a common goal

ex: wikipedia, blockchain, linux

open innovation and citizen science

soliciting solutions, ideas, or innovations from a large group

ex: lego ideas, innocentive, zooniverse, ebird, waze

collective intelligence

aggregating insights, opinions, or expertise from a large group to improve decision making

ex: amazon ratings, rotten tomatoes, netflix ratings, stack overflow, yelp

crowdsourcing

raising funds from a distributed group of contributors, large scale or microfinance

ex: kickstarter, gofundme, indiegogo, kiva

user engagement and incentives

extrinsic rewards

intrinsic rewards

extrinsic rewards

financial incentives: direct payment for microtasks or large prizes for winning contest

career development: build a professional portfolio, showcase skills to potential employers, or learn skills

tangible reward: early access to products or services

reputation and image: earn the reputation among the peers

intrinsic rewards

altruism: feel good to help others or make a difference

intellectual challenge: satisfaction of solving complex problems

entertainment: enjoy the task

Gamification

the application of game design elements and principles in non-game context to improve user engagement, experience, and loyalty

ex: point rewards, leaderboard, ranks, small games for citizen science, Pokemon Go

passive crowdsourcing (sensing)

users automatically share their GPS location and speed, which will be aggregated to figure out traffic conditions

active crowdsourcing (reporting)

users manually report specific incidents they encounter, such as car accidents, road hazards, hidden police, etc.

to keep users contributing for free, Waze uses:

gamification

points and ranks: users earn points for reporting and level up to high ranks

social feature: seeing other "wazers" on the map

donation-based social crowdfunding

donors give money to help individuals or non-profits without expecting a product in return

raise money for a wide variety of needs, including medical expenses, emergency relief, memorials, education, etc.

impact of crowdsourcing on business models

CVP: goal is to obtain high value solutions that can be offered to customers

market segment: crowdsourcing may identify empty market spaces

revenue sources: seekers- lots of flexibility; solvers- prize, cut of sales, non-$$; intermediaries- transaction fee, commissions

capabilities: seeker need both solution and complementary assets, seeker does not have to allocate resources to risky activities, seeker must repurpose capable employees

how the internet enables crowdsourcing

excellent at handling digital/intangible transactions

cost of coordination through the internet is near $0

web scale allows access to long tail

crowdsourcing advantages

access to broader, deeper talent pool

higher probability of higher-value solution at lower cost

recruiting- seekers publish; solvers search

solve problems only crowds can solve

identify existing solution

single strategy to cooperators

crowdsourcing disadvantages

difficult to protect IP

risk crowd won't opt-in

task may not be appropriate to crowdsourcing

integration can be difficult

bad reputation for failed attempts

cloud computing

computing services offered on-demand over the internet ("the cloud") instead of on local computers or servers and paid by use

ex: software, storage, processing power

private cloud infrastructure

cloud infrastructure used by one org with multiple consumers

may be owned, managed and operated by the firm, third party, or both

may reside on or off premises

public cloud infrastructure

infrastructure provisioned for open use by many

resides on provider's premises

owned, managed and operated by different arrangements of players

hybrid cloud infrastructure

comprised of 2+ distinct cloud infrastructures

can be private, community, or public

integration of on-prem/cloud (private and public) infrastructure linked to optimize both security and portability

cloud computing properties

on-demand self service

broad network access

resource pooling

rapid elasticity

measured service

on demand self-service

instant access through a web app or portal

no IT help needed -- users launch services themselves

real-time provisioning of storage or computing power

pay as you go for only what you use

broad network access

use anywhere, on any internet-connected device

access through many networks and locations

requires strong security, especially for private clouds

resource pooling

shared resources serve many customers-"multi-tenancy"

same infrastructure, dynamically allocated

location independent-users don't know where it runs

examples: storage, bandwidth, processing, memory

rapid elasticity

scales up or down automatically as demand changes

add or remove capacity anytime

feels limitless to the user

ideal for handling spikes in traffic or workload

measured service

usage is metered and tracked automatically

pay by use or subscription (per seat or volume)

enables monitoring and cost control

cloud computing service models

software as a service

platform as a service

infrastructure as a service

software as a service

access to software hosted in the cloud, not installed locally

used through a web browser or app interface (thin client)

provider manages everything: infrastructure, updates, maintenance

users configure, not customize (they control limited settings but not core features or code)

platform as a service

cloud platform for building and deploying applications

developers use provider-supported tools

no server or infrastructure management

infrastructure as a service

virtual access to servers, storage, and networks

run any software--you manage OS and applications

no hardware management--provider handles infrastructure

benefits of cloud computing

financial

operational

strategic

drawbacks of cloud computing

fit and flexibility

security and compliance

operational and dependency risks

Financial

no large upfront costs-avoids major capital investment in hardware or data centers

pay as you go model-buy only what you use

lower total cost of ownership-reduced maintenance, upgrades, and energy costs

shifts IT to an operating expense-improves financial flexibility

Operational

on demand scalability-instantly add or reduce capacity as needs change

resource efficiency-pooled infrastructure optimizes use and reduces waste

faster deployment and innovation-launch, test, and iterate solutions rapidly

reduced IT management load-providers handle infrastructure and updates

Strategic

agility and speed to market-respond quickly to business changes or opportunities

focus on core capabilities-redirect IT staff and budget toward value-adding activities

less dependence on legacy systems-supports modernization and digital transformation

smaller strategic payoff gap

Location Technologies

self-reported positioning

bluetooth/wifi/rfid

global system for mobile communications

- triangulation with cell phone towers

- if we know where the access points are, and we know the distance of a device from those points, we can locate the device

location-centric participatory sensing

users collect and post/tag data about where they are

reporting crime data, mapping paths, social organizing

collective data, not individual important

participant-centric participatory sensing

individuals or small defined group tracked

arrival prediction, schedule coordination

miniaturization and innovation

becoming networked, integrated: connected to other computers, devices, networks

computers sense movement, operating environment, connectivity: smart phones, cars, surveillance cameras, hotel door locks, GPS

becoming larger, cheaper, more flexible

sensor communication

sensor to people: low tire pressure, high blood pressure, heart rate

sensor to sensor: anti-collision detection

sensor to aggregator: traffic jams, website traffic

Manufacturing comparison

additive/3d manufacturing

traditional manufacturing

Additive/3d manufacturing

low capital expenses

only need: computer and software, digital 3d model of the object to be made

3d printer, printing materials

a single printer can produce many kinds of objects

Traditional manufacturing

high capital expenses

significant infrastructure: manufacturing space, equipment

specialized equipment (tooling)-often single purpose

large supplies of raw materials

high cost and volume of labor

How 3D printing works

traditional manufacturing is subtractive-material is cut away to make the product

3D printing is additive-material is built up layer by layer

a 3D printer lays down 2D layers in the x-y plane

layers stack in the z direction to form the final shape

common methods of 3D printing

extrusion: makerbot, similar to an inkjet, a material is extruded in a pattern

stereolithography: FormLabs, uses a laser to cure a polymer resin

Unique advantages of 3D printing

affordable customization

manufacture of more efficient designs

one machine, unlimited product lines

very small objects (nanoscale)

efficient use of raw materials

pay by weight

batches of one, create on demand

accessible to all

new supply chain and retail opportunities

3 things slowing 3d printing adoption

speed: inability to print at in large quantities limits utility

software: not designed to integrate many printers

quality control: uniqueness of what's printed leads to lots of variance

what has been 3d printed

bones, organic compounds, human tissue, wood, fighter aircraft parts, prosthetic limbs, models, weapons, glass, cleats, concept cars, wheelchair ramps, toys, music boxes, chocolate and other foods, clothing, record albums

CVP: 3d printing

3d printing enables firms to offer customized and flexible products

- massive customization

- rapid prototyping

- on-demand production

ex: Nike uses 3d printing for customized shoes; align technology uses 3d printing for personalized dental aligners

market segments: 3d printing

enables firms to serve new types of customers and niche markets that traditional manufacturing often ignores

- mass customization customers

- low volume industrial customers

- designers and creators

production and cost structure

traditional manufacturing:

high fixed costs but low marginal cost at scale

3d printing (additive manufacturing):

lower fixed costs, but higher marginal cost but more flexibility ; reduced transportation costs (local production), lower inventory and warehousing costs

business model implication:

lower entry barriers for small firms, more small-batch production, reduced need for large factories, shift from global mass production to distributed manufacturing

platform based business model

3d printing can create platform-based business model where: designers create products, users download designs, service providers print objects (printing as a service)

the new tasks can be managed as crowdsourcing projects

the existing tasks can be managed as digital content marketplaces

3d printing advantages

mass customization

rapid prototyping

low setup cost

on-demand production

complex design capability

shorter supply chains

3d printing disadvantages

high cost for large-scale production (no economies of scale)

slower production speed

limited material options

intellectual property risks

quality and reliability issues

high equipment costs