Management of Technology Design and Implementation of Technology Strategy

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Introduction Technology Strategy Technological Innovation and the S-Curve (Reading II-1, II-2 and II-3) Disruptive and Sustaining Innovations (Reading II-4 and II-5) Open Source Software & Business Models MySQL (Case II-1/II-2) Technology Adoption (Reading II-7) Organizational Adaptation (Reading II-13) Strategic Dynamics (Reading II-16) Infosys Consulting (Case II-11) Charles Schwab in 1999 / 2007 (Case II-15 / II-16)
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Introduction Technology Strategy

Introduction Technology Strategy

Introduction Technology Strategy

Strategy making as evolutionary organizational learning process

Technological capabilities

Technology strategy

Experien ce

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Introduction Technology Strategy

Substance of technology strategy Competitive strategy stance (defines role in strategy):
Technology choice (concept vs. implementation, components vs. architecture) Technology leadership/followership (pioneering/monitoring) Technology entry timing Technology licensing

Value chain stance:

Scope of technology strategy (core technologies relate to value chain, others peripheral)
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Introduction Technology Strategy

Resource commitment stance (intensity of resource commitment):
Depth of technology strategy (number of technological options)

Management stance (choice of management approach and organization design):

Organizational fit (e.g. centralized/decentralized R&D)

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Introduction Technology Strategy

Evolutionary perspective on technology strategy
changes over time Variation-selection-retention importance of history and inertia

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Introduction Technology Strategy

Internal Environment I
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Determinants of Technology Strategy

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Introduction Technology Strategy

Introduction Technology Strategy

Introduction Technology Strategy

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Introduction Technology Strategy

Introduction Technology Strategy

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Enactment

Substance

External Technology Sourcing

Internal Technolog y Sourcing

Product Development

Process Development

Technical Support

Competitive Strategy Stance (Choice / leadership / Entry timing / licensing) Value chain stance (Scope) Resource commitment stance (Depth) Management stance (Organizational fit)

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Introduction Technology Strategy

Application of framework (II) Examine for each of the five implementation areas what is the real technology strategy as manifested by actions taken, and confront the real with the stated strategy. Example: External Technology Sourcing:
Competitive stance: If the stated competitive stance is to be a leader, is that the case in external technology sourcing? For instance, do we learn about it later on? Given that we have access to the latest and the greatest, are we among the first to deploy it or do we wait until others have demonstrated its use?
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Introduction Technology Strategy

Value chain stance: Do we deploy technology for competitive advantage in many or few of our value activities? If we had a broad scope, how is that reflected in our technology sourcing? How many core technologies do we source externally? Resource commitment stance: How much do we spend in each of the areas of externally sourced technology to make sure that these areas of technology can continue to be the source of competitive advantage for us? Management stance: How well are we organized to deal with external technology sources? For instance, do we have legal staff to deal with technology licensing issues or do we get legal assistance on an ad hoc basis? How strong are our information networks to follow technological developments in various areas?
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Technological Innovation and S-Curve

Productive unit's capacity for and methods of innovation depend on stage of evolution from small, technology based to major high-volume producer Major innovations followed by may smaller ones
often acccount for more than half of economic gain Typically result in specialized systems with economies of scale Generally reduce flexibility

Major innovations often based on emerging need or new way to meet demand
Entrepreneurial act, often based on superior performance
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Technological Innovation and S-Curve

Two types of innovation (incremental change to efficient production system vs. radical innovation)
Often evolution over time Product vs. process innovations e.g. microelectronics or Ford (5 models in 4 years based on flexible factory, then after Model T 15 years process innovations)

Implications for management of technology

3 stages: fluid, transitional and specific Exhibit 1
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Technological Innovation and S-Curve

S-curve - Overview
Theory of the potential for technological improvement Framework for describing substitution of new for old technologies at industry level Progress slow at beginning, then increases until maturity (approaches natural or physical limits) Plots time (or engineering effort) versus main product performance feature Leading firms often focus on mature technologiies, new entrants based on new technologies Component versus architectural technologies S-curves (all impact product performance) Industry-level versus individual firm
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