Business Models and Open Innovation in Emerging Economies Final Challenge

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The UGBA193i – Business Models and Open Innovation in Emerging Economies course officially wrapped up on Friday, April 11, 2014 at the SkyDeck in Shattuck with the students’ final presentations. The class involved a travel aspect, as seen on previous posts, where students visited various companies in India to explore how business operations were different or similar in emerging economies versus the United States, and an in-class portion, where students continued their consulting projects for unique challenges in residence at the Haas Innovation Lab in the Cal Memorial Stadium.

Students worked nonstop throughout the semester. They engaged in multiple teleconferences with their project sponsors from India; met with top-level executives from companies like Siemens, Tyco, Moon Express, Wipro, Tech Mahindra, etc., to gain feedback on their proposed solutions; and collaborated with MBAs from India and Norway to build on and incorporate open innovation into their business models.

UGBA193i students with the corporate judges
UGBA193i students with the corporate judges

UGBA193i students were finally able to showcase the results of all their hard work last Friday to a panel of physical judges and through a teleconference call to their sponsors in India. Both American and Indian judges were provided with a project evaluation sheet that graded students on the following criteria: clearness of introduction and background to challenge; evaluation of existing business model; new value creation and capture; incorporation of open innovation concepts; risk and financial analysis for sustainability; group interaction, etiquette and delivery; quality of presentation and illustrations; quality and practicality of recommendations; and time management.

Participating corporate judges included Imtiyaz Haque, Director of Global R&D in Enterprise Imaging & Informatics at Philips, Steve Myers, Chief Executive Officer at Optum/United Health Group; Nanci Knight, University Alliance Executive at IBM; Lawrence Lee, Senior Director of Strategy at Xerox, PARC; Arnie Lund, Connected Experience Technology Leader at GE Global Research; Michael Flynn, Director of Product & Innovation at SAP Labs in Palo Alto; and Barbara Holzapfel, former SVP & Managing Director of SAP Labs.

Challenge sponsors joining via WebEx from India were Nataraj Kumar, R&D Manager at the Philips Innovation Campus in India; Dr. Ananth Rao, Head of Business Development and Senior Consultant for Metabolic Diseases at Apollo HospitalsKarthik Panyala, Business Analyst Intern at Apollo HospitalsVishal Kamat, Director of Strategy at IBM‘s India Software Lab; Manish Gupta, Director at the Xerox Research Center in India; Vikram Damodaran, Director of Healthcare Innovation at General Electric in India; and Sheenam Ohrie, Vice President and Head of Diversity & Inclusion at SAP Labs India.

IBM Model

Team IBM was the first student group to present. Their challenge was to “build an inclusive and sustainable business model for education in India”. The IBM student team identified the following as problems with India’s current education system: rote memorization; labor supply exceeding demand; domestic talent relocating overseas; poor quality of teaching; corruption; and unsustainable infrastructure. Their recommendation is a solution called SmarterTextbook, a peer-to-peer education platform where students can experience live tailoring of content; up-voting and down-voting of peer’s expertise; take employer endorsed course tracks; earn certification for successful. With SmarterTextbook, the group hopes users will be able to develop marketable skills, be trained to create new jobs, and receive high quality education. The model aims to generate new revenue streams by creating an employee database for companies, providing data and analytics, and offering test certifications to its SmarterTextbook students. The student team incorporated open innovation by looking to external resources to derive value for IBM’s internal business.

Philips Model

Next to present was Philips, who reiterated the company’s mission of “improving people’s lives through meaningful innovation.” The sponsor’s challenge entailed building a sustainable business model that would exploit cost effective lighting systems relevant to India and other emerging economies. The student group reinforced the importance of this challenge by raising awareness to the horrific rape crimes that continues to escalate in India, especially in the dark. To address this and Philips‘s problem, the students suggest investing in Solar LED Street Lights. Today, India’s public lighting is a mess; it has inefficient replacements, require billions of dollars in investments, and has no maintenance planning. By shifting to solar LED lighting, the Indian government will incur zero maintenance costs and experience 100% reduction in energy consumption. The team envisions a franchise model where Philips sells solar street lights to local entrepreneurs, while governments subsidizes some of the financing. They plan to implement the critical mass theory to scale up to rural areas and India as a whole.

Xerox Model

The Xerox student team went on stage afterwards. Their first slide has only the number “80” on it, highlighted in red. The group communicated a powerful message with this number. By the end of their twenty minute presentation, the team says 80 people in India would have passed away; simply because of their poor healthcare system. The Xerox executives in India gave students the challenge of developing frugal or reverse innovation business models for the company to pursue in emerging economies to drive new revenues for its services business. Xerox’s core competencies lie in three areas: photo-imaging, data processing, and machine learning. The company’s goals include increasing services from 55% to 67% by 2017; engaging markets in developing countries; and offering innovative business solutions to stay relevant.

Consequently, they recommend a Xerox-powered Health platform that utilizes a subscription enrollment plan. The ecosystem will include private hospitals and tech startups for urban residences, and tech startups and government agencies for rural locations. Distribution network will depend on hubs and smartphones. Through the health platform, the group hopes Xerox can help reduce the mortality rate by allowing users to diagnose themselves early through the app and recognize when to gain further medical evaluation. The student team used Apple as an analogy to better demonstrate their model: the iPod would be analogous to a hub, and the iTunes to a health plan service. Like Apple, they hope Xerox can create a feasible platform model that wraps services around products.

Apollo Model

The Apollo Hospitals team also wants to tackle a similar problem. In India, people avoid going to hospitals to receive check ups until they develop a serious illness and are nearing death. Apollo Hospitals was founded in 1983 and is the leading hospital in India with 8,500 beds and 51 branches across the country. The company wants to continue to provide affordable healthcare services to lower-income segments, while maintaining industry leadership, promoting reach hospitals, and incorporating tech and innovation. The student group suggests incorporating innovation to an Apollo co-creation platform, and then distributing this to the Indian population for relevance. The platform aims to enlist the insights of consumers/patience, tech companies, and Apollo experts and data to offer better preventive care solutions.

General Electric Model

The General Electric student team was asked to determine how GE can “enable profitable business models that benefit all stakeholders in the telemedicine ecosystem of rural India”. Echoing the research done by the Xerox and Apollo Hospitals student groups, the GE team described a similar need for expanded access and preventive healthcare in India. Cardiovasuclar diseases for example, was India’s number one killer in 2010, 25% of heart attacks occur in individuals younger than forty, and heart attack deaths are expected to double in India by 2015. Hence, the GE team recommends exploiting the company’s sensor technologies and data collected from the sensors to maximize efficiency and minimize time to treatment.

SAP Model

Last to present was the SAP student team. Their sponsor’s challenge question: “How can SAP Labs-Bangalore use its existing resources to meet the needs of developing economies?” In response, the group recommends an SAP accelerator with local mom and pop shops (SMEs) as their target market. The ideation process involves a deeper understanding of customer needs and existing technology solutions in the SME market. Through the SAP accelerator, the second step to the students’ three-part proposal, services and access will be provided to participants, making use of SAP’s vast resources and expertise. The team suggests piggybacking on the networks of other ERP solutions and large multinational companies like Tally, Coca Cola, P&G, among other to implement the last step of their recommendation, the push to market.

Steve Myers, CTO of Optum/UnitedHealth, congratulates the students for their presentations well done!
Steve Myers, CTO of Optum/UnitedHealth, congratulates the students for their presentations well done!

The judges were really impressed and excitedly offered their praise. Steve Myers, CTO of Optum/UnitedHealth was especially proud of the students’ work, having consulted and mentored them over the last few months. According to Myers, the students have grown so much since he last worked with them. He applauds them further for their professionalism and thinks the quality of their presentations and slide decks are at par with those done at the corporate level.

The UGBA193i Final Presentations was definitely a big event, swarmed by prominent corporate executives both in person and via WebEx, and important figures in the academia. Zane Cooper, Chief Technology Officer of the Haas School of Business, made sure all the tech related activities ran smoothly. Maria Carkovic, the Executive Director of the Institute for Business Innovation was at SkyDeck from start, giving the opening remarks, to finish. Erika Walker, Executive Director of the Haas Undergraduate Program, was at the scene as well. She explains the course as “the first of its kind”. Although UC Berkeley and other UC’s in general have been promoting study abroad programs in the past, the UGBA193i travel-study class is different in that students traveled to India for ten days over the winter break instead of semester-long. Moreover, upon the students return, they are expected to continue the research and projects they have begun in India. Walker sees the global know-how as enabled by courses like UGBA193i as an invaluable asset for students to have. Dean Richard Lyons graced the event as well to give the closing remarks. In his talk, Dean Lyons jokingly dubbed the corporate judges as “Haas faculty”. Experiential learning takes on such a huge aspect of Haas’s program curriculum, so Dean Lyons reminded and thanked the participating executive judges for their role in making that happen for the students.

Denice Sy
Class of 2014

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