Sunday, September 02, 2007

Monitoring for Technological Strategy

To be competitive in a fast changing, global environment requires monitoring many different things (competitors, technology, social trends, economies, countries, etc) in different places (physical, virtual). In this post, I am concerned with technology. How does one know what technology to monitor? There are many considerations, aspects, view points, trade-offs to take into account. The sketched figure shows the main ideas (to be improved).

Many large organizations have a strategic focus for a particular time frame. This focus provides an overall context for what technologies to monitor. It is important to notice that monitoring a technology involves much more than the technology alone. Monitoring a technology because it seems a nice technology does not help. Important notions to consider while monitoring include the business context, potential applications, market readiness, economics, society aspects, legal issues, etc. In this sense, the word “technology” is too limited to express what we need to cover. It would be more appropriate to refer to technological trends in a market, society and business context.

Apart from the strategic focus, additional factors that determine what technology trends to monitor include what your competitors are doing and what technological trends are emerging.

All those inputs help us in deciding what technologies (or “concepts”) to monitor. The result can be seen as a “technology/concept map”. This map tells us where we should put our effort in our monitoring activity. Notice that the map itself is a living thing, which needs regular updates, and in particular upon changes of the strategic focus, new emerging technologies, social changes that make existing technologies suddenly relevant, competitor activities, etc.

Once we know what to monitor, we still need to find out the best way to monitor each technology, i.e. what antennas to use and where. The following dimensions for characterizing technologies may be of help in this respect:

- Market readiness
- Technological maturity
- Legal aspects related to the use of the technology
- Social acceptation
- Applicability for the different business lines (the more the better)
- Applicability horizon for the business
- Technologies potentially provided by providers (especially for those with a short horizon, e.g. less than one year)
- Skills available in-house
- Available partners
- Etc.

All those factors help us in deciding when we should know about the technologies/concepts. Before it becomes business, before it appears in popular press, or before appearing in specialized press, before it enters the blogosphere, before it enters the research world, or before it enters garage startups, or even before it happens … It is common sense that the earlier one wants to be informed, the more expensive and difficult it is. It is simple to discover that a company offers a new service by reading it in the technology supplement of a newspaper. Low cost, low risk, but also low strategic value. On the other hand, to discover that a small startup constructs key technology for building a competitive edge in your business (and before the whole world knows it) is difficult and expensive. High cost, high risk, but high potential strategic value.

Corresponding to the different time frames desired for monitoring things, different methods apply from using Internet (reading blogs, search engines, intelligent agents, etc, to having your people in situ close to where things tend to happen. Those are two extremes in between which there are many different options, each with its advantages and disadvantages. This trade-off requires explicit decisions.

Once decisions are made, we have all parameters defined for setting up our Technology Observatory relevant for our strategic focus. The result of the observatory is a set of actions and/or recommendations for each technology concerned, such as passive monitoring, setting up a consortium, pursuing standards, partner with other organizations, buy a company, delete, etc. This can be expressed in another map, let’s say the technology/concept recommendation map. Moreover, sometimes it is possible to find external funding and partners to monitor a certain technology or relevant aspect of it.

The technology observatory may provide relevant information for different target audiences. The obvious one is the top management of the organization, but other targets include middle management, the whole company, partners and even the outside world. Each audience may require its own format, in order to ensure that the information arrives, and is actively consumed by the right people at the right time. The whole enterprise of technology monitoring is a waste of effort and money if this last step is not taken care of.

There are two relevant feedback loops to be aware of, and to stimulate. Monitoring the technology trends may change the technology/concept map by additions, deletions or modifications. Another and more profound feedback is to modify the strategic focus of the organization based on the technology observation performed. It may be the case that some observation suddenly opens a new business perspective to such extent that the strategic focus needs to be changed accordingly.


Anonymous said...

This is an interesting post, Richard. One aspect I would emphasize (which you seem to be aware of) is that a technology is almost never something distinct from its applications. In other words, we need to monitor technologies-in-use or technologies-in-potential-use rather than pure technologies as such.

If we only ever monitor pure technologies, ignoring their applications, we risk making one of the classic forecasting mistakes and underestimate demand -- eg, recall the forecast that the worldwide cumulative demand for mainframe computers would be about 5 machines (allegedly a forecast of IBM in the late 1940s). This was a reasonable forecast if you were only considering the applications known at that time, but users quickly created new applications for computers which then led to much greater production and demand.

For example, it wasn't a computer firm who led the development of computers for accounting and stock control in the 1950s. Rather, the design and development of computers for business purposes was done by a large user, Lyons Tea Shop chain in the UK, who created their own computer development subsidiary, Leo Computers (later part of ICL, later still part of Fujitsu).

One of the places to monitor technologies-in-use is with lead users of a technology stream. Lead-users typically adapt the technologies they use to their specific needs, and they do so ahead of the developers of technology. Monitoring users of technology rather than reseachers and developers is counter-intuitive to most forecasters.

-- Peter McB.

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