E-INNOVATION

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About This Presentation

Innovation is a wellspring of growth (Romer, P.M. 1987). Although innovation itself is a
continuous process for producing new ideas, productions, services and tools, conducting
innovation is highly environment-dependent or platform-dependent (Ping Lan, 2004). The rapid
development of information tec...


Slide Content

http://www.iaeme.com/IJARET/index.asp 86 editor@iae me.com
International Journal of Advanced Research in Engineering and Technology (IJARET)
Volume 8, Issue 1, January- February 2017, pp. 86–93, Article ID: IJARET_08_01_009
Available online at http://www.iaeme.com/IJARET/issues.asp?JType=IJARET&VType=8&IType=1
ISSN Print: 0976-6480 and ISSN Online: 0976-6499
© IAEME Publication
E-INNOVATION
Taufeeque Hasan

Assistant Professor, Amity University Haryana, Gurgaon, India
Dr. Sanjeev Kumar

Assistant Professor, University of Delhi, India
Sanchita Raghav
Assistant Professor, Amity University Haryana, Gurgaon, India
Ankit Tiwari
Research Scholar, Amity University Haryana, Gurgaon, India
Mohan Gautam
B.Tech, Amity University Haryana, Gurgaon, India
ABSTRACT
Innovation is a wellspring of growth (Romer, P.M. 1987). Although innovation itself is a
continuous process for producing new ideas, productions, services and tools, conducting
innovation is highly environment-dependent or platform-dependent (Ping Lan, 2004). The rapid
development of information technology forces environments to change at a great speed that also
makes great changes to innovation itself in the digital-business environment. Given this
background, this paper is an attempt at examining the great changes to innovation brought by
information and technology, especially the Internet. Therefore, we put forward a new innovation
platform: E-innovation. In this paper, we discuss the definition, management, application of E-
innovation; we provide a five-D architectural framework of E-innovation; we also present an
example on the application of E-innovation and drive recommendation for E-innovation based on
research available.
Key words: E-innovation, innovation, Internet.
Cite this Article: Taufeeque Hasan, Dr. Sanjeev Kumar, Sanchita Raghav, Ankit Tiwari and
Mohan Gautam, E-Innovation. International Journal of Advanced Research in Engineering and
Technology, 8(1), 2017, pp 86–93.
http://www.iaeme.com/IJARET/issues.asp?JType=IJARET&VType=8&IType=1
1. INTRODUCTION
Inventions and innovation create a new production paradigm or create a new living environment. On the
other hand, the mixture of an existing and an emerging production paradigm environment generates more
inventions and innovations (Ping Lan, 2004). Therefore, the way of conducting innovation has undergone
so many great changes that in academic there comes forward some new innovation platforms such as
online innovation (Kogut, B. and Turcanu, A. 1999) , open innovation (Kogut, B. and Meitu, A.2000),

Taufeeque Hasan, Dr. Sanjeev Kumar, Sanchita Raghav, Ankit Tiwari and Mohan Gautam
http://www.iaeme.com/IJARET/index.asp 87 editor@iae me.com
distributed innovation (Sawhney, M. and Prandelli, E.2000) and connected innovation (Von Hippel,
E.2001) in recent years.Innovation capability is an important influencing factor for business operation and
it meant the ability led to new production, product and idea(Gautam, M., Singh, S., Arya, K. S., Tiwari, A.,
&Fartyal, G. 2016).
Given this background, this paper is an attempt at examining the great changes to innovation brought
by information and technology, especially the Internet. Therefore, we put forward a new innovation
platform: E-innovation. E-innovation means a new way or a new model designed to organize, run, plan,
conduct, facilitate, promote innovation on internet ( Ping Lan,2004).It is also a new idea or a new label for
a group of activities whose aim is to create tools for innovation, product development and business
development in the present climate of continuous change (Bob Cotton, 2004) Accordingly, the main
objects of this paper are:(1) to summarize empirical research (mainly academic and industry) relevant for
the definition, management, application of E-innovation;(2) to provide a five-D architectural framework of
E-innovation;(3) to present an example on the application of E-innovation;(4)to drive recommendation for
E-innovation based on research available. The continual cycles of innovation require continual
involvement of people from an organisation. Continuous innovation successions by default create transient
monopolies with innovations through technology and organisation (Raghav, S., Tiwari, A., Gautam, M.,
Arya, K. S., Raghav, Y., & Thakran, A.2016).
From the above on, this paper is divided into the following: Section two explores the notion of
innovation platform: a networked based innovation platform. In order to maintain core competence and
long-term sustainable success, the emergency of E-innovation is undoubtedly the new trend of innovation
paradigm. Section three summarizes the academic theory and industry application on E-innovation. In
industry, the term of E-innovation is widely used for new products or services, a frontier field, a new
technology, a capability, a new company name and so on. On the contrary, the academic research on the E-
innovation is quite limited. Compared with the traditional innovation platform, we evaluate how new forms
of ICT-based media have emerged to provide electronic infrastructure for E-innovation. Section four
mainly sets up a five-D framework that can be used to understand and map the underlying structure of E-
innovation platform in the Information Age. Based on the framework of Schumpeter and Lan Ping, the E-
innovation platform consists of five parts: distributed nature, digital form, different rules, dedicated to
channel change, decouple activities. Section five deals with the application of E-innovation. We introduce
Haier as a case to illustrate the E-innovation platform. Haier is a super-large Chinese enterprise, which has
actively engaged in technical innovation, scientific management, capital operations, and multi-national
expansion. With the development of Haier’s TIM, the Haier Group has undergone a period of substantial
progress, especially the technology innovation organization. It is divided into 4 stages: (1) Hierarchical and
functional structure (1984-1991).(2) Business unit structure (1995-1998). (3) Flatted and process-based
network structure (1999). (4) Marketing chain process structure based on the IT architecture (now).
Through the effectively utilizing external resources and IT, Haier developed an innovation platform all
over the world which formed powerful support for Haier’s R&D system and every employee on Internet. It
may truly realize that organization can do “anything, anytime, anywhere”. Finally we conclude the study
and suggest possible avenues for further research.
2. THE EMERGENCY OF E-INNOVATION
In this climate of continuous radical change, the process of design, strategic planning, and new product
development has necessarily had to change and adapt, and the resulting convergence of design, planning,
scenario building, technology forecasting, market intelligence, new product development and creative
business development is converging into a new, proactive response to change that we can call “e-
innovation”[1]. Although some efforts have been made to promote E-innovation or on-line innovation in
recent years, E-innovation has not become a buzzword and gained the momentum that E-marketing or E-
commerce currently possess [2]. And it is natural to ask that what is E-innovation and how it comes?

E-Innovation
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E-innovation processes began to emerge in the 1970s and 1980s;with the introduction of formal
software design processes and draws on disciplines that have emerged over the last 50 years of digital
media history [1]. The open source movement is the first major demonstration of what the Internet means
for the future of work and innovation on a global basis. The open access to software source code creates
the potential for distributed innovation on a global basis. Therefore, E-innovation represents a powerful
model for the organization of research and development, for the arts, for the creation of a global
community of innovators. And it raises significant implications for expansion of creativity in all domains
(Kogut and Turcanu, 1999; and Kogut and Meitu, 2000). Sawhney and Prandelli (2000) suggest a third
way:” community of creation”, which manages distributed innovation in turbulent markets. Rayport and
Jaworski (2001) Examine innovation frameworks and processes in the Networked Economy. They identify
five variables: investment required, time-to-market, flexibility, decision making mechanism and innovation
constraints. E-innovation is a new idea- a new label for a group of activities whose aim is to create new
tools for innovation, product development and business development in the present climate of continuous
change. These activities include competitive intelligence, strategic corporate planning, new product
development (Bob cotton, 2002). E- Innovation is also the computerization of the innovation processes and
capabilities are integrated into the electronic work. In such cases, computers carry out most of the
innovative activities, working products are digital and their diffusion costs are minimal. And they put
forward a technology for realizing E-innovation: workflow technology and develop a NPDWF system
which facilitate the standard process of NPD with information technologies in order to increase shared
knowledge and information, and decrease the cycle of NPD (Chen Jin, He Dan, Tong Liang 2004). Lan
ping summarize that E-innovation can be interpreted as using the internet to plan, initiate, conduct, run,
facilitate, and/or promote innovation. It is defined as innovations closely tied to a digital platform, no
matter whether the platform is used for delivery or to commercialize an innovation. He also established
three dimensions to measure the E-innovation with the aspects of software-based outlets, distributed
delivery, integrated toolkits (Lan ping 2004).
Finally, we conclude that E-innovation is a new way of working. It is the integrated usage of new and
emerging technologies, which can greatly improve existing working methods to better deliver services and
better sharing of knowledge. It comes from the Internet Era and success use of open source software
development.
3. CURRENT RESEARCH ON E-INNOVATION
In recent years, E-innovation becomes more and more popular. Searching popular Internet search engines
and directories such as Google for the keyword ‘E-innovation’, we find 18,700 results. In order to gather
deeper understanding of E-innovation, Lan ping and Du examined 1060 samples of searching findings
from Yahoo [8] and draw a conclusion as following (see table 1)[7].
Table 1 Industrial usage of the term E-innovation (Source: Lan and Du [8])

In this survey, they found that about half the industrial E-innovation has been used by industry since
the E-commerce stage, and the term is quietly incorporated into some enterprises’ operations [7] [9]. They
also found that half the industrial usages of the term e-innovation are related to labeling new products or
services and most usages emphasis on the new features of product or services such as ICL’s online smart
card, Bournemouth Council in the UK providing ‘ask job’ service and Cell Consulting Espin service which
consists of E-vision, E-portfolio, E-conception and E-implementation. Some companies apply E-

Taufeeque Hasan, Dr. Sanjeev Kumar, Sanchita Raghav, Ankit Tiwari and Mohan Gautam
http://www.iaeme.com/IJARET/index.asp 89 editor@iae me.com
innovation to a special field such as Arthur D.Little, one of the leading consulting companies, which
develops an E-innovation hierarchy in the management of supply chain based on the combination of
market innovation, channel innovation, product/service innovation, and business model innovation. Some
companies apply E-innovation to indicate an area to the Internet such as e-government, e-service and so
on. Others use E-innovation to show a capability .For example, GE use E-innovation not only refer to new
service or product, but also to capabilities, progress and results based on the section “GE’s E-innovation in
2000’.Trifinit Networks, an American ISP, present E-innovation as the core of its three key E-businesses:
Trifinit Service, Trifinit Venture and Trifinit Online. E-innovation is also used as a new company’s name
or reflected in creating intellectual property [7].
While in the academic research, the term E-innovation is limited used. When we search the term in
Elsevier Science Server (3 papers), EBSCO (1 paper) and Spring Linker (50 papers related) databases, we
find few papers related to this area. In recent years, the scholars emphasis E-innovation on such areas:
LAN.P places current efforts made by industry and academic in promoting a new innovation on top of the
traditional innovation paradigm and promote a working framework for accommodating E-innovation
activities[7]; Kougout drives the emergence of E-innovation based on the open source software
development and put forwards two models: the waterfall model and iterative model[3];Loudon, Rayport
point out the difference between the online innovation and offline innovation [10][11]; Sawhney and
Prandell’s work further explores the practices of deploying distributed innovation and suggests a third way:
community of innovation[5]; Chen Jin, Dan he and Tong Liang develop a type of E-innovation: innovation
business processre engineering based on workflow technology [6]. Some researches discuss E-innovation
on the relationship between innovation and other business activities such as manufacture, biotechnology,
telecommunication, semiconductor and retail industries. Philip Rosson examine electronic marketplaces as
one “digital economy” innovation based on the Canadian experience [14]; Shigemi Yoneyama,Ingyu OH
show how knowledge-integration capabilities underpin the success of the process of technology
commercialization in Japanese companies[15]; Jennifer Frahm,Prakash Singh indicate that
telecommunication is the basic electronic infrastructure for E-innovation after investigating six
biotechnology area in Australia[16]; Hyuk-rae Kim,Shigemi Yoneyama trace the formation and usage of
flexible innovation networking used by Taiwanese semiconductor manufacturing company [17]; Rudy
L.Ruggles focus on one dynamic driving force of E-innovation: connectivity [18]; Bob cotton mention the
definition, evolution, E-dimension, the global dimension of E-innovation and ten steps to making the E-
innovation work [1].
Form these above on, it is fair to say that E-innovation is as much about organization -wide change as it
is about new product development-it is a culture, as well as a set of processes to innovate and develop new
products and explore new ways of marketing and new routes to market [1]. We compare the E-innovation
with traditional innovation (see table 2).
Table 2 E-innovation and traditional innovation (source :Ping Lan, Kougout, Loudon, Rayport)

E-Innovation
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4. THE FRAMEWORK OF E-INNOVATION
Examining the efforts of industry and academic in promoting E-innovation, it is apparent that many
enterprises are positioning themselves in the emerging field of E-innovation, which could bring new
functionalities and new channels for them to compete in a new business environment. As Lan ping pointed
out that there existed several barriers before E-innovation, which can be divided into two categories:
problems raised from the supply side and problems form the demand side. Judged from the supply side, the
problems are the lack of a workable framework, an inadequate number of organizations running the
innovation in a distributed way and the lack of software tools to develop E-innovation. As in the demand
side, the problems are the strong inertia of the traditional innovation, the trend toward standardization in E-
innovation application and the difficulty of measuring return on investment [2]. Therefore, a theoretical
working framework has to be developed for E-innovation. It has developed into a hot point about how to
construct the E-innovation platform in recent years.
In order to seek such a framework, a retrospect of academician’s study on innovation was conducted.
Schumpter’s (1939) initial study builds the first interface between innovation and business systems. He
explains how innovations cause economic evolution by linking two phases and two types of innovations
with a wavelike business circle. He reveals how key components of an economic system such as
entrepreneurs, money and banking affect the carrying out of innovation [19] [7]. Bruce Kogut and Turcanu
(1999) develop two models to illustrate the process of innovation .One is waterfall model which minimizes
the need for coordination and communication because it sees the process of software development as a
cascade of phases, the output of one being the input to the next. The other is iterative model, which
recognizes the substantial overlap between various phases of software development [3]. It is an integrated,
parallel system that designs new products and related processes [20]. Bob Cotton (2002) presents a bottom-
up approach to E-innovation, which attempts to marry strategic planning, product portfolio management
and a responsive product innovation process with tactical, entrepreneurial opportunism [1]. Lan Ping
(2004) suggested a three dimensions framework to accommodate current efforts for understanding and
promoting new innovation based on Schumpter’s framework. The three dimensions are digital innovation
outlet, distributed innovation delivery and simplified innovation management [7]. Chen Jin, He Dan and
Tong Liang (2004) address the changes of innovation following the thread of new product development
and put forward a new model of New Product Development Workflow, which realizes E-innovation [7][6].
Therefore, a five dimensions framework is suggested here to accommodate current efforts for
understanding and promoting E-innovation based on the above framework. The E-innovation platform
consists of five parts: distributed nature, digital form, decoupling activities, dedicated to channel change,
deployment of new rules. Digital form means E-innovation focuses on the information and its controls over
these physical works. Distributed nature means that E-innovation is open and decentralized to a much
higher degree. Decoupling activities means the basic fundamental construction unit. E-innovation focuses
on the change from traditional channel to electronic channel. Deployment of new rules emphasis on
integration of rules and principles used in the innovation management to make great changes to the
organization structure, incentive mechanism and intellectual property.
5. THE APPLICATION OF E-INNOVATION
Innovation is the ongoing creative response to a dynamically changing marketplace. In the electronic
marketplace, innovation is a strategic essential. E-innovation is the strategically planned process for
encouraging and expediting innovation in the real-time, distributed and tightly networked marketplace [1].
Haier was incorporated in 1984 only producing household refrigerators. Over the past 20 years, the
company has witnessed significant prosperity and is now a transnational organization widely recognized in
the world community. Haier currently manufactures a wide range of household electrical appliances,
15,100 varieties of items in 96 product lines, and exports products to more than 100 countries. In 2004,
Haier's global sales hit RMB101.6 billion topped all Chinese trademarks at a nationwide survey. On April
18, 2005, Haier was ranked 89th of the 2005 World's 500 Most Influential Brands by the World Brand

Taufeeque Hasan, Dr. Sanjeev Kumar, Sanchita Raghav, Ankit Tiwari and Mohan Gautam
http://www.iaeme.com/IJARET/index.asp 91 editor@iae me.com
Lab. Facing the challenges brought by E-commerce and China’s accession to the WTO, Haier began a
management restructuring program in 1998 backed by the efficient Haier Market-chain System practice.
During first 5 years, Haier focused on the organization restructuring, management decentralizing with
application of advanced information and network systems in order fulfillment, Market-chain performance,
logistics, capital operation, after-sales service, product inventory and operational cost reduction. During
second 5-year period from 2003, Haier carried out the SBU (strategic business unit) management to
stimulate the enthusiasm of every employee and to enhance Haier’s competitiveness in global marketplace
[21].Haier’s international promotion framework encompasses global networks for design, procurement,
production, distribution and after-sales services. Haier has established 10 manufacture complexes, 30
overseas production factories, 8 design centers and 58,800 sales agents worldwide. Through the effectively
utilizing external resources and IT, Haier developed an innovation platform all over the world which
formed powerful support for Haier’s R&D system and every employee on Internet. It my truly realize that
organization can do “anything, anytime, anywhere”. As one of the super-larger Chinese enterprise, Haier
develops an E-innovation hierarchy in the area of supply chain management. As fig.1 shows, there are four
levels of E-innovation based on the combination of market innovation, channel innovation, organization
innovation and management innovation. Market innovation means the company shifted from make-to-
stock to make-to-order production; implemented just-in-time inventory management and shortened cycle
times. The strategy of Haier is divided into 3 stages: brand strategy, diversification strategy and
internationalization strategy. Therefore, Haier shifted from production push-based to production pull
based, MTO (market to order) process. The market is decided by the custom and itself. The object of
market is how to meet each customer’s need. Channel innovation means they using a highly responsive
supply chain planning process to allow the company to benefit form production efficiencies and economies
of scale, with full visibility of supply and demand information worldwide. My SAP SCM is implemented
to enable lean process (a synchronous logistics model with the feature of centralization of order handling)
for the Haier Central Logistics Division, which supports 13 product divisions. The financial and associated
master-data capabilities of SAP R/3 are implemented along with my SAP SCM, including production
planning; materials management; warehouse management and the business-to-business procurement [22].
With the development of Haier’s TIM, the Haier Group has undergone a period of substantial progress,
especially the technology innovation organization. It is divided into 4 stages: (1) Hierarchical and
functional structure (1984-1991). (2) Business unit structure (1995-1998). (3) Flatted and process-based
network structure (1999). (4) Marketing chain process structure based on the IT architecture (now). The
marketing chain process structure is made of three flows: financial flow, logistics flow and order flow,
which based on the Haier’s culture and network information system. By reengineering its business
processes, Haier achieved market advantage by adopting an approach focused on centralized order
handling. It is possible to minimize material inventories in its production network and become more
responsive to market demands. In order to achieve globalization, the company has established appropriate
partnering strategies on a case-by-case basis, OEC principles. They emphasis on the management of
responsibility chain and market chain. Haier’s management has been worldwide recognized. Haier’s
experience has been introduced in 16 case studies in business merger, financial management and corporate
culture by 7 foreign educational institutes, including Harvard University, University of Southern
California, Lausanne Management College, the European Business College and Kobe University [21].

E-Innovation
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Figure 1 The framework of Haier (source: www.haier.com)
6. CONCLUSION
As E-innovation is a new kind of innovation platform of the digital era, there are also several research gaps
ahead. For example, how to eradicate the differences in anticipations from different cultures of sub-
cultures [6]? How can a company profit by more and more by the usage of E-innovation? How to
implement E-innovation in daily management more accurately? E-innovation is as much about
organization-wide change as it is about new product development-it is a culture, as well as a set of
processes to innovate and develop new products and explore new ways of marketing and new routes to
market [1]. Although there are some obstacles ahead E-innovation, it is sure to be a part of corporate core
competences in the future.
7. ACKNOWLEDGEMENT
We are thankful to Prof. (Dr.) P.B. Sharma, Vice-Chancellor, Amity University Haryana for his constant
guidance and encouragement provided in this endeavor.
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Taufeeque Hasan, Dr. Sanjeev Kumar, Sanchita Raghav, Ankit Tiwari and Mohan Gautam
http://www.iaeme.com/IJARET/index.asp 93 editor@iae me.com
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