Technology

1. Technology BPT 3113 – Management of Technology

2. Chapter Outline • Introduction • Definition of Strategy • Linking Technology & Business Strategies • Significance of Strategy • Formulating Technology Strategy • Technology Innovation Leader

3. Lesson Outcomes • Appreciate technology as a strategy component of organizations • Know how to develop a technology strategy • Identify advantages and disadvantages being a leader in technology innovation

4. Introduction • Effective technology management is based on successfully linking business and technology strategies • The two strategies must be closely intertwined and highly integrated • Technology – core of system designed to satisfy societal / customer needs • Business – to gain a sustainable economic advantage that provides a competitive edge Blurred visions of the future Well-coordinated and focused organizations are more competitive

5. Definition of Strategy • Strategy • Plan that needs to be followed to compete and win – long term objectives • A broad formula of how an organization intends to succeed • Strategic Management – consisting of 3 important and interrelated components • Strategic planning • Strategic implementations • Strategic evaluation

6. Linking Technology and Business Strategies • First step toward integrating business and technology strategies is to get the business and technical sides of corporate management to agree on a common set of priorities. • Integrating technology strategy and business strategy can be thought of as two sides of a coin: Either side is worthless without the other Framework for Formulation of Business and Technology Strategies

7. Linking Technology and Business Strategies A number of generic questions that should be addressed by strategic planners on both the business and the technical sides: • To what extent is technology relevant to business? • Which business strategies require technology? • Where will we get it (the technology)? • What are our core technologies for the business? • In which technologies should we focus our research effort? • What new strategic options will technologies provide? Product Technology Matrix To identify the relationship between products / services and the underlying technology

8. Significance of Strategy

9. Formulating Technology Strategy The Wheel of Competitive Strategy [Porter, 1980] A Model For Strategy Development

10. Formulating Technology Strategy • Identify the mission, vision and goals • Know the firm’s posture • Make aggregate project plan • Decide an acquisitions and organization • Make resource allocation • Lead the innovative effort • Set-up evaluation methods • Choose market entry strategy

11. Formulating Technology Strategy • Identify the Mission, Vision and Goals • Survive in competitive markets – efficient, competent and offer uniqueness  innovation • Organization without a strategy is like a body with a dead brain while an organization with poor strategy is like a sick patient • Core of the strategy is based on the vision, the mission and the objectives and goals that need to be realized

12. Formulating Technology Strategy • Know the Firm’s Posture • Examine the opportunities – within the firm, external to the firm, trajectories of technology Context in Which Competitive Strategy is Formulated

13. Formulating Technology Strategy • Make Aggregate Project Plan • Basic steps in constructing such a plan: • Mapping the varying kind of development projects • Making capacity decisions • Make provision for gaining critical skills and capabilities • Acquisitions and Organization • Sources of technology available to business operation • Within the business operation • From the corporate or other company laboratories • From outside the corporation

14. Formulating Technology Strategy • Make Resource Allocation • Size of resources allocation and approaches vary from firm to firm (budget for a new product development, NPD) • Some company may encourage more number of projects with a hope to hit one or two (open end budget) • Some companies may decide the frequency of new product introductions and work back (objective – task method) • Some companies may relate the investment to their sales

15. Formulating Technology Strategy • Lead the Innovative Effort • Consideration in leading for innovation are: • Innovation climate • Innovation culture • Right people • Research as a team effort • Product champions • Performance appraisals • Set-Up Evaluation Methods • Measurable criteria are essential to assure benefits from innovation effort: • Time – product or process introduction • Cost

16. Formulating Technology Strategy • Make Market Entry Decisions • Divided into 3 categories: • First movers (pioneer / leader) • Early followers • Late entrants (laggard) • To be first entrant – firm must posses the core capabilities required to produce the technology when needed • Intends to beat the earlier entrant to market with new version of this technology, it must have fast-cycle development processes

17. To Be First Mover Advantages Disadvantages Research and development expenses Undeveloped supply and distribution channels Immature enabling technologies and complements Uncertainty of customer requirements • Brand loyalty and technological leadership • Preemption of scarce assets • Exploiting buyer switching costs • Reaping increasing returns advantages

18. Leader in Innovation Advantages Disadvantages Huge costs Inflexibility Pricing problem Threat of competition • Name recognition • Large market share • A chance to define the industry standard • A head start on the learning curve • Protective barriers • High profit • Delayed customer switching • Favorable response by outsiders