Thursday, September 8, 2011


                                   Technology Management

A1] Ten Basic Tenets for the Management of Technology (MOT):
A tenet is a principle based on observation, intuition, experience, and in some cases, empirical analysis. Ten tenets are proposed next, as guiding principles for an enterprise to operate within a technology cycle (TC) framework. The tenets recognize that short-term treatments of any issue in general, and technology management in particular, are at best sub-optimizations, and so, will not lead to more long- Lasting solutions in adapting and advancing technology. Let us take some time now to discuss these principles in detail.

  1. Value diversification is a poor substitute for MOT:
Value diversification refers to the improvement of stockholders' investments in a company through quick- fix solutions on paper, such as mergers, acquisitions, and other stock-enhancing strategies. Unfortunately, this traditional approach to value enhancement results in mostly short-term gains and long-term pains. Every company ought to identify core technologies and core competencies, and then home them to get the most out of those for innovating products and/or services. When IBM acquired ROLM Corporation many years ago, IBM was trying to complement its core technologies in mainframe computers and personal computers with the core technology of ROLM, communication systems. Unfortunately, this did not work out very well, and IBM eventually sold ROLM. In the early 1980s, McGraw-Hill, whose core technologies are in publishing, books, journals, and related products, went into the personal computer business with Odyssey with a totally different core technology that didn't work, either.

TM/MOT has a formal focus to nurture and cultivate core technologies and core competitiveness. As Prahalad and Hame argue, “In the long run, competitiveness derives for an ability to build, at lower cost and more speedily than competitors, the core competencies that spawn unanticipated products”. This is a painstaking, long-term process and not a quick-fix solution. A thoughtfully monitored technology management results in long-term gains, in terms of both financial considerations and product longevity.

  1. Manufacturability must keep pace with inventiveness and marketability:
In industries, in general, and manufacturing companies in particular, people in manufacturing functions often find themselves coping with increasingly aggressive marketing strategies and design strategies. Manufacturing in the United States is being troubled by intense competition from the Pacific Rim and European trading partners, who are developing new and better technologies and techniques to increase their advantage in product design and manufacturing process (Gold, 1994). Yet, in today's globally competitive marketplace, it is not only a necessity for manufacturability to be in step with marketing and design strategies but also a luxury, serving as an important weapon to chip away the market share of the competition. Timing in designing, manufacturing and marketing products and/or services has become extremely crucial. This calls for what we call “modular technologies”, which enable a company to have tremendous flexibility to quickly package together innovative products and/or services to beat the competition, let alone to survive the fierce global competition game.

  1. Quality and total productivity are inseparable concepts in managing technology:
In the 1970s, here in the United States, productivity was of major concern, particularly after the 1973 Oil Embargo, and the ensuing Japanese "automobile attack." In the 1980s, after the famous NBC documentary, "If Japan can, why can't we?" emphasis on quality reemerged with great ferocity and intensity. The Total Quality Management (TQM) movement made quality a common prerequisite for ensuring competitiveness, even in the domestic markets. With the onset of the information superhighways in the late 1980s, and the rapidly changing global communication technology panorama, time has become a third crucial strategic variable in a company's drive to be competitive.

The non-traditional total productivity management approach to competitiveness forcefully argues that quality, price and time are the three competitive dimensions which must be simultaneously created and monitored for companies to be long-lasting. Quality and total productivity are like two sides of the same coin or two rails of the same track. Companies that have excellent quality and competitive prices still cannot do well unless they can bring products of highest value to the marketplace in the least time possible. Information technologies have made it possible today to order products 24 hours a day from the luxury of one's home through the Home Shopping Network (HSN) and others, where the customer expects a rapid response rate. In fact, Thurow (1992) predicts that in the twenty-first century there will be high-tech and low-tech final products, but almost every product in every industry- from fast food to textiles-will be produced with high-tech processes. Therefore, product technologies and process technologies must be managed carefully to ensure that all these three dimensions of competitiveness are working together to enhance market share and profitability.

  1. It is management's responsibility to bring about technological change and job security for long-term competitiveness:
We have seen, particularly in the last 5 year that American management has gone on a downsizing binge in the name of streamlining and cost cutting. Often, technological improvements have been associated with such downsizing. Unfortunately, this is a poor business strategy because it under-estimates the employees' ability to manage not only existing technologies that their company has but also their creative capabilities to create and perfect new ones. Employees must feel that they have job security, particularly when they are responsible for suggesting and implementing new technologies. They feel betrayed after they spend hours of hard work designing a technologically advanced environment for greater competitiveness, only to find themselves victims of their own making. This need not be the case. Companies often spend millions of dollars trying to mitigate the negative effects of low morale, job dissatisfaction, and consequent low productivity, following a layoff or cost-cutting measure, right after a major technological change. A smart approach to managing technology is to look at the competitiveness challenge as a holistic one. The Japanese have been excellent in taking such a systematic view while managing all their basic technologies.

  1. Technology must be the “servant”, not the “master”, the “master” is still the human being:
Until recently, we used to be the masters of technology, our servant. We used to drive technology, but today we have become technology's servant, and technology is driving us. We believe that we have crossed a "technology threshold," whereby our response to technology has become one of catching up. Many companies are unable to cope with the dramatic changes taking place in the very nature of technologies. This, in turn, puts a company in a reactive posture, rather than a proactive one. Companies which are learning the art of managing new technologies have a better chance at being a technology master instead of a technology servant. The chaos that companies face today in responding to "rapid technologies" can be harnessed as a positive strategy to create opportunities for new products and/or services.

It will not be too long before we see integrated communication systems combining technologies related to television sets, computers, VCRs, telephones and fax (facsimile) machines. Cable companies will soon be in the computer business; and computer companies, in the telecommunication business. It is impossible to even conceive the extent of the technological integration revolution we will be facing even before we enter the twenty-first century. Our wristwatches might become microcomputer devices, working as remote-control units and information retrieval systems. We might see a series of technology thresholds bombarding us in the years to come, and every time we cross one of them, companies have an opportunity to convert technological chaos into economic opportunities.

  1. The consequences of technology selection can be more serious than expected because of systemic effects:
This principle has major impact on the economic viability of the twenty-first-century organization, because we will be selecting multiple technologies with a rapidity that is hard to comprehend at this time. Product technologies will become obsolete in such short periods of time that they will resemble the toy industry, where the average shelf life of a product may be only one season or sometimes only a month. We are already beginning to see personal computers fall into this category. In the early 1980s, when the personal computer was something new to all of us, the average shelf life was approximately 4 to 5 years for a model to become obsolete. Today, just 13 years later, the average shelf life has been whittled down to less than 1 year. By the time a company decides to update its PC technology to state of the art and acquire it, that technology would just become obsolete. In anticipation of even greater obsolescence, companies will usually wait for newer models in both hardware and software. The rapid turnover in both of these categories of technologies makes it even more difficult to implement newer ones. However, the penalty for not updating can also be severe in terms of lost revenues.

  1. Continuous education and training in a constantly changing workplace is a necessity, not a luxury:
Companies have traditionally slashed the education and training budgets during times of economic downturn. Today, this would be a foolish strategy, because most employees know how to use process and information technologies to the fullest extent. Having spent millions, and sometimes billions of dollars in such technologies, it would be most uneconomical not to get the most out of these expensive technologies. Sometimes, a million-dollar piece of equipment has a 20 percent downtime, costing hundreds of thousands of dollars in lost revenues, simply because operators and engineers have not been rained in all aspects of its operation. The more the education and training for managing technologies, the greater the utilization rates would be, and hence, the greater the economic leverage. For example, in a multinational bank, such as Citibank, the technology group strives hard for customers to do worldwide banking in anyone of 14 languages. The company spends much time and energy educating and training the personal bankers, the customer service representatives, and others, in an effort to offer their clients the ever increasing portfolio of products and services in a competitive manner. Citibank creates its own technologies, continuing education budgets keep raising in well-managed companies. In the years to come, we can only see greater rates of such continuing education, to ensure knowledge and skills in using technologies to their fullest extent possible.

  1. Technology gradient is a dynamic component of the technology management process, to be monitored for strategic advantage:
The term technology gradient refers to the technical advantage an enterprise enjoys with respect to its licensees and its competitors. Normally, most sensible multinationals maintain a sufficiently high technology gradient with respect to their licensees, particularly if the latter are even remotely associated with a product line that competes anywhere in the world. This is particularly true when the technologies are radically new, for example, biotechnology, global networking technology, etc. Technology gradient, which is the subject of another chapter in this handbook, is a powerful concept for managing the technological advantage that the company enjoys with respect to its competition worldwide. Briefly, a company monitoring its technology gradient can be in one of four postures: technology leader, technology follower, technology yielder, or technology loser. Depending on the technology advantage a company wishes to enjoy, it must consciously position itself as one of these. Obviously, the company would want to be in one of these areas, depending on which phase of a product life cycle, no matter how hard it tries to be technology leader in that phase, the returns on its technological investments will be so marginal that it is better off being a technology yielder during that stage for short periods of time ideally., however, a company must overlap its technologies so as to minimize the technology yielding positions and maximize the technology leadership positions.

  1. The RTC (Resistance to Change) factor must be carefully analyzed and meticulously monitored for gaining the most out of any technology, particularly a new one:
The RTC factor refers to the magnitude and nature of resistance to change. Unfortunately, very little is known about the process of the RTC factor, and the rational means to minimize it. At the same time, however, we now know that a high RTC factor can lead to work slowdowns, poor employee morale, high maintenance costs, and even serious sabotages. Management has to recognize that a creative, lively workforce is better than stagnant, high-priced technology. Research shows that when new technologies are implemented, "total productivity" at first drops because of the natural response of employees-resistance to accept the new technologies as viable means-before it picks up again.

The competitive threat of a new technology-based business paradigm (and its early implementation success) does often, unfortunately, prolong the last gasps of life in the old technology because it temporarily forces a really serious competitive pressure on the old technology. Under this real threat, it is amazing how much excess effort, costs, and inefficiencies can be wrung out of the last defense stand of the "old guard." It is usually a wasted effort, which delays the acceleration of the inevitable new "S" curve and prolongs the agony of the old.

However, as employees get used to new technologies, their acceptance rate improves, their attitude to the technology becomes more matter-of-fact, and their proficiency and skill rate also returns to normal levels. A proactive approach to minimizing the RTC factor is to explain the benefits of either technologies to both the company, and the employees themselves.

  1. Information linkage must keep pace with technology growth:
As pointed out during previous discussion, information networks are evolving so rapidly that unless companies take advantage of linking up to such networks, they lose opportunities for new revenue streams. For example, companies that quickly capitalized on the accessibility to the Internet increased their market share through an exposure of their products and/or services to millions of people around the world. We barely understand the potential of the Internet through the World Wide Web (WWW). Within a company, it has become an absolute necessity to keep all the employees informed of the latest technological developments within their own company so that unnecessary duplication of costly effort is avoided, and product changes and client updates are offered on an on-line basis so that customer responsiveness can be in real time. Time lags can cause serious miscommunications, particularly with multinationals. For example, if a component is eliminated in a product and this information is not communicated to the company's worldwide spare-parts inventory system, retail clerks somewhere in Indonesia or Taiwan may still be carrying the part on shelves unnecessarily, increasing their inventory carrying costs. Companies like Caterpillar and International Harvester maintain global inventory management systems so efficiently that within 24 hours they can have a part made available to any retailer around the world. In such situations, this tenet has even greater relevance and respect.

A2] A] “The human beings used to be the masters of technology”:
Until recently, we used to be the masters of technology, our servant. We used to drive technology, but today we have become technology's servant, and technology is driving us. We believe that we have crossed a "technology threshold," whereby our response to technology has become one of catching up. Many companies are unable to cope with the dramatic changes taking place in the very nature of technologies. This, in turn, puts a company in a reactive posture, rather than a proactive one. Companies which are learning the art of managing new technologies have a better chance at being a technology master instead of a technology servant. The chaos that companies face today in responding to "rapid technologies" can be harnessed as a positive strategy to create opportunities for new products and/or services.

It will not be too long before we see integrated communication systems combining technologies related to television sets, computers, VCRs, telephones and fax (facsimile) machines. Cable companies will soon be in the computer business; and computer companies, in the telecommunication business. It is impossible to even conceive the extent of the technological integration revolution we will be facing even before we enter the twenty-first century. Our wristwatches might become microcomputer devices, working as remote-control units and information retrieval systems. We might see a series of technology thresholds bombarding us in the years to come, and every time we cross one of them, companies have an opportunity to convert technological chaos into economic opportunities.

B] Creativity and Innovations:
Creativity by thought is invention and that inventiveness is quality usual required and always desirable in all phases of the innovation process. Formulation of the creative process contains the following stages:
  • The perception of the problem (coming from the R&D process) with idea(s)
  • Frustration of the inability to solve it
  • Relaxation on the problem
  • Illumination or sudden inspiration, and
  • Solution and verification

Innovation exploits opportunity to seek a return on investment. Creativity provides the forum for innovation by being one of the requirements for the successful entrepreneurs in their quest to innovate. Six stages are outlined in the innovation process:
  • Pre-project stage: Including inside and outside R&D communications of what may be of interest to the firm and networking ideas with peers
  • Project responsibilities: What could be useful to the customers
  • Initiation of the project: Managing the idea with market place
  • Execution: Managing the innovative project
  • Outcome evaluation: Evaluating the development of the innovation
  • Project transfer: Transferring the development to the next point for further work on project

As simply as this is stated, the important point is that innovation as differentiated from creativity has a constant reference to the market place because that is where the opportunity (return on investment) and the risk for success or failure lie. Risk analysis assesses creative and innovative ventures in technology to determine technologies that are worth considering. Many risk analysis are common tools for the entrepreneur who exploits the opportunity to get the maximum return on investment. For example, Marconi, who did not invent the telegraph, exploited the opportunity with risk and received a handsome payoff from the return on investment.
A3] Role and Importance of Technology Management:
Business role/importance:
Management of technology is critical for an enterprise for its successful operation on long term basis. This is however, a part of total management system. The basic considerations for starting a new firm based on technology enabled are:
  • The idea for a technological innovation
  • A potential market
  • Team work in both technological and business expertise
These facts are best depicted in business plan which needs to be prepared and approved before starting a new business. This may include business status, objectives, products, services, technological background, competition, benefits to customers, market, marketing strategy, capitalization, capital requirements and benefits to customers etc.

Competitive role:
Today technological competitiveness is importance for corporate survival is alone not sufficient. The reason why only technology is not sufficient is because the business is a system and it comprises of subsystems. Today we also give more importance to process organisation. In this context, technology is also to be considered as a competitive strategy for innovative strategies to be developed. Technology innovations can be integrated with production, marketing, finance and personnel to make the business system a balanced system. This ensures the following factors:
  1. New ventures
  2. Innovations
  3. Research
  4. Research infrastructure
New ventures are centered on the technology in developing new products and creating new markets. Innovation denotes the span of activities from creating the new technological knowledge to implementing it with new business. Technological change is new knowledge about what things to produce and how to produce them, which comes from the corporate research. This is the demand for the research infrastructure.

Even today there are barriers to commercialize the technology. They are:
  • High cost, even if life cycle cost are competitive
  • Elements of reliability
  • Ease of maintenance and repair
  • Availability of better alternatives (solar power v/s conventional power)
  • Capacity limitations
  • Convenience in use e.g. solar cooker
  • Durability
  • Half baked technology development
However these could be managed if one considers the following issues:
  • Emphasize life cycle cost rather than first cost
  • Emphasize environmental benefits
  • Good documentation for operation and management
  • Involvement of private sector
  • Standardization and quality control
  • Selection of reputed manufacturer
  • Importance of user friendliness
  • Policy guidelines
  • Availability of spares
TECHNOLOGICAL CHANGE:
Technology growth is the result of new inventions and innovations. Every invention is something new and in most cases it is a combination of already existing technological elements. An innovation, which has little disruptive impact on behaviour pattern, is called a continuous innovation, for example, Fluoride Toothpaste. There are discontinuous innovations, which involve the establishment of new behaviour patterns and the creation of previously unknown products such as automobiles, televisions, computers etc.

The process of technological change is clearly linked to innovation. Technological change occurs through substitution and diffusion. Simplest form of substitution is when a new technology captures over a period of time a substantial share of the market from an existing older technology. The new technology is better and economically more viable. A good example is the introduction of color television in place of black and white TV.