Imaginatik’s Technology Helps Companies Keep Their Crowdsourcing Initiatives Inside the Box

9/8/09Follow @wroush

Evidently, a lot of companies have trouble innovating—or there wouldn’t be so many startups offering “enterprise crowdsourcing” and “innovation management” tools to help them.

Several of these startups are right here in New England and have been featured in Xconomy. For example, there’s Innocentive, which helps companies stage international competitions to solve discrete problems like “find a novel protease inhibitor”; TopCoder, which is similar to Innocentive, but specializes in crowdsourcing big software development projects; uTest, which crowdsources software quality-assurance testing; Invention Machine, which makes software that helps engineers brainstorm; and Induct Software, which was founded in Norway but has a Boston-based CEO, and is building a customizable, Web-based system that allows companies to codify a process for innovation.

But older than all of these companies except Invention Machine, and far more obsessed with the “management” side of innovation management, is a Boston-based firm called Imaginatik (AIM: IMTK). Founder and CEO Mark Turrell, whom I reached last week at his home in Berlin, says Imaginatik (pronounced imagin-ATT-ic) stands out within the innovation industry for its pragmatism about how organizations really work—and about the importance, in the rush toward “transparency,” of making sure that certain information and intellectual property stays inside the right boxes.

“There are a lot of pragmatic reasons why transparency doesn’t work and is actually bad,” Turrell says. “Do you want your sales team knowing six months in advance that your product development cycle has actually been pushed back? For a lot of companies, even the idea that you could share your problems [internally] and have 500 strangers across your organization give you responses is really scary.”

That’s why many of the features of Idea Central, Imaginatik’s Web-based idea collection platform, are focused around organizing and controlling the process of internal crowdsourcing. After 15 years studying group collaboration and developing software to facilitate it—and after selling Idea Central to companies like Bombardier, Boeing, Cargill, Chubb, Novartis, Pfizer, and Whirlpool that together have almost a million end users—Turrell says Imaginatik has learned that coming up with ideas is relatively easy. But managing and implementing them, within the context of an established corporate culture, is exceedingly complex.

“We built the first prototype of our software suite in a couple of hours, back in 1998,” Turrell says. “But very quickly the testers said, ‘What if I don’t want to share this idea with you? What if I don’t want to be named? What if we’re innovating around a supply chain system for a company like Whirlpool—should Supplier A ever see Supplier B’s ideas?’ All of a sudden, just in terms of security and change management and behavior, this became something that very much depended on a good understanding of business processes.”

Turrell says Imaginatik spent about six years testing different iterations of its software within real organizations, “just really fundamentally understanding how this stuff works in practice, and not only in one organization, but how it can be replicated, whether you’re an insurance company or a pharmaceuticals company, whether you’re in Shanghai or Poughkeepsie.”

The company finally “nailed the formula” around 2004, he says, but it took a couple more years to line up the capital needed to market the software to enterprises on a large scale. In 2006 Imaginatik went public on the London Stock Exchange’s Alternative Investment Market—where it’s easier, Turrell says, to raise small amounts of capital—and just last month it raised an additional $2.6 million from unnamed private investors. The 35-employee company is profitable, having emerged from the 2009 fiscal year with an operating profit of £130,000 (about $212,000) on revenues of £3.29 million ($5.4 million).

Idea Central, Imaginatik’s main product, is a software-as-a-service platform designed to guide company employees through the process of submitting ideas for new products or process improvements. It works most effectively, Turrell says, in the context of time-limited “challenges” in which employees have a few weeks to come up with solutions in a specific area—how a company can reduce its carbon footprint, for example—and managers then pick the best ideas for implementation. The platform guides users to a form where they can enter a challenge by writing down their idea, assigning it to a category, attaching drawings or other documents, and the like. (Managers can customize the forms to encourage employees to submit as much or as little detail as is required.) Users can also see other employee’s ideas and leave ratings and comments. On the administrative side, Idea Central lets formal reviewers sort, analyze, and rate proposals, then create reports that show participation rates and summaries of the winning ideas.

Turrell says Idea Central has been carefully crafted to support both collaboration and control. An “Idea Minder” feature, for example, lets users subscribe to ideas, meaning they’ll receive e-mail notices every time someone leaves a comment. But these e-mails don’t contain the entire text of each comment—just the first 80 characters. Readers have to click on a link and authenticate themselves to see the full comment. “We don’t want intellectual property slipping away through e-mail,” Turrell explains.

Administrators can delete or password-protect ideas that are judged to contain sensitive information. And to comply with Sarbanes-Oxley requirements, the software creates an audit trail with a record of every interaction with content designated as having financial value. (“We’ve had cases where people have left organizations and joined competitors, and we can find out in our environment exactly what they touched before leaving,” Turrell comments.)

To attract business partners to its innovation platform, Imaginatik has created application programming interfaces (APIs) for Idea Central that allow outside software developers to tap into the system. The biggest example of such a collaboration to date is ChemBioConnect, a joint product of Imaginatik and Cambridge, MA-based CambridgeSoft, a maker of database software for pharmaceutical, biotech, and chemical companies.

ChemBioConnect essentially merges ChemBioDraw, a tool for drawing and visualizing complex organic molecules on a computer screen, into Idea Central so that large, distributed groups of researchers at companies like Pfizer, which helped to develop the tool, can collaborate on molecular design problems. “CambridgeSoft is a good example [of a vendor] taking our APIs and their datasets to come up with a brand new line of business applications,” Turrell says.

Imaginatik isn’t going to become the next Microsoft Sharepoint or Lotus Notes by running innovation challenges and building collaborative chemistry tools, Turrell acknowledges. But it has the advantage of selling what he calls a “business layer” technology rather than a network- or application-layer technology: in other words, managers can buy access to the Web-based tool the moment they realize they need it, rather than having to work through a lengthy acquisition process administered by their IT departments.

So while there are plenty of tools that help big organizations generate ideas, the ultimate goal at Imaginatik is to help organizations get comfortable with the whole idea of internal crowdsourcing. To gain that comfort—and to give the ideas any chance of being implemented—-businesses need easily customized controls that will channel the new ideas to the right places, Turrell says. As he puts it: “Complex organizations require simple solutions that work in a complex world.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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