Tuesday, June 29, 2004

The ROI of idea management

Imaginatik, a software and services company that specializes in innovation and idea management, put out the whitepaper "Idea Management ROI: Quantifying the Returns from Advanced Idea Management" last summer. (I ran across a mention of it today on the Fast Company Weblog.)

What is idea management? Well, it isn't a new name for knowledge management as was my first guess. Idea management, a fairly new discipline according to the whitepaper, is "...the practice of systematically collecting focused business ideas with the goal of selecting high impact concepts that generate tangible and intangible benefits for the organization." In short, idea management increases a "company's capacity for innovation."

The paper continues the definition: "Idea Management is implemented as a process, supported by computer software, and involves a core group of process experts, together with the support of management and the participation of employees." Before you groan, "Oh no, not new software," let me provide this statistic from the whitepaper: "91% of executives across all industries believe that increasing their company's capacity for innovation is critical to creating future competitive advantage and earning profits."

Idea management, says the whitepaper, offers the infrastructure to make that happen. But since many companies are undergoing this process for the first time, they may need help justifying the investment of time, people, and money that will help them increase their ability to innovate.

Thus, the goal of the whitepaper is to "demonstrate that the idea management process...[can] deliver significant and measurable results." The authors recommend that people use the paper to build a business case supporting the need for resources and process support in their idea management efforts.

According to the paper, idea management systems and processes can work with various business activities, including identifying opportunities, developing products, and improving processes. Possible returns fall into three categories: returns from the individual ideas, returns from improving innovation processes, and returns from achieving other business objectives. The paper discusses each of these and gives tips for using the ROI calculation.

Additional whitepapers on aspects of idea management are available at http://www.imaginatik.com/web.nsf/docs/idea_reports_imaginatik.

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