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Linking Competitive Strategy to the Value Chain

As such, the Strategic Alignment Model was never intended as a way to measure IT alignment but rather as a way to think about IT strategy and whether the business strategy informed the IT strategy or vice versa a somewhat radical idea at the time. Later, when Luftman was asked to develop a special issue of the IBM Systems Journal — notably on the subject of IT and organizational transformation rather than IT alignment — he invited various academics and practitioners who had worked with IBM.

While the notion of IT and organizational transformation was widely acknowledged at the time — with the seminal work of Hammer and Champy appearing at the same time — the notion that IT could lead, rather than react to business strategy, was both new and controversial. The net result was a transition in the role of IT from tactical tool to strategic resource Scott-Morton, ; Sauer and Yetton, By the time the IT productivity paradox had been debunked by Brynjolfsson and Hitt , the focus of the IT business value literature shifted from asking whether IT pays off to what makes IT pay off — namely the management practices and other organizational variables like alignment that contribute to IT business value Brynjolfsson and Hitt, Later, as research by Reich and Benbasat and Chan et al.

The notion in Henderson and Venkatraman that alignment emerges from some form of fit between business strategy, IT strategy, organizational infrastructure and processes, and IT infrastructure and processes, has proven difficult to operationalize and measure. This conceptualization formed the basis for subsequent studies where different types of alignment were investigated.

Specifically, researchers began to distinguish between alignment in terms of strategic plans what firms intend to do and alignment in terms of realized strategy what firms actually do. As such, Sabherwal and Chan argue that their conceptualization of alignment focuses on realized rather than intended strategies. Given the differences between planned and realized strategies, strategic IT alignment can be seen in two distinct ways.

First, the role of IT in supporting actual business strategy is a function of the current portfolio of IT applications rather than written plans. Notably, Oh and Pinsonneault conceptualize IT alignment based on a portfolio of different IT applications needed to support actual business strategies.

Accordingly, research began to explore the performance effects of alignment between IT and business strategy at the process level, consistent with prior research on the effects of IT at the process level. Tallon further shows how the effects of strategic alignment in a given process can spillover into other processes further down the value chain. By implication, the downsides of misalignment where IT fails to provide adequate support for key business activities can create significant performance issues elsewhere in the value chain.

These advances in construct conceptualization — as we move from planned to actual strategies for a range of different strategies and as we move from the firm level to either the process or task level — have been accompanied by changes in the way alignment is measured and interpreted Venkatraman, ; Bergeron et al.

If construct conceptualization delineates the theoretical phenomenon of interest, changes in conceptualization modify the underlying phenomenon in important ways — often making it difficult to compare results across studies that considered different measures. Not surprisingly, over the last 25 years as the study of IT alignment broadened and deepened in important ways, the literature has devised various proxy measures to assess the extent of IT alignment at a point in time.

This perspective assumes that misalignment or misfit degrades performance Iivari, ; Bergeron et al. Realizing that organizations are subject to the pulls and pressures of multiple contingency forces Sambamurthy and Zmud, , much attention has traditionally been given to indirect, rather than direct, measures of IT alignment.

We describe both direct and indirect measurement approaches below. The indirect measures of fit proposed by Venkatraman have been frequently applied by IT researchers to calculate the extent of alignment between business and IT strategy. Venkatraman proposed a framework that comprises six distinct perspectives from which fit might be operationalized: moderation, mediation , and profile deviation as criterion-specific approaches, and matching, covariation , and gestalts that are specified without reference to a criterion or dependent variable such as business performance.

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The matching, moderation, and profile deviation measures are the most common approaches used to assess IT alignment for inclusion in IS research Cragg et al. Critically, these forms of contingency fit are neither interchangeable nor complementary Iivari, ; Gerdin and Greve, ; Meilich, Notwithstanding their popularity, matching, moderation, and profile deviation differ in terms of their underlying conceptual assumptions about what constitutes fit and how it should be operationalized Venkatraman, ; Gerdin and Greve, Each is different in theory and so it comes as no surprise that the application of multiple measures with the same measures of IT and business strategy could lead to different and perhaps even contradictory findings Drazin and Van de Ven, ; Edwards, For instance, Cragg et al.

Chan et al. Meanwhile Tallon found that profile deviation and moderation-based measures of IT alignment at the process level yielded consistent results in terms of their ability to predict perceived IT business value across a range of primary processes. This is an important characteristic of contingency fit research that might help explain the mixed results reported in the literature Chan et al.

For example, when using matching-based measures of alignment, Palmer and Markus were unable to find a correlation between alignment and firm performance for companies in the specialty retail space. One could argue that these results contradict Chan et al. These different results can be explained by contingency theory since different forms of contingency fit are not explicitly interchangeable.

Instead, knowledge accumulation takes place within , rather than across , fit perspectives Gerdin and Greve, This implies that scholarly efforts to build on the work of others will be challenging when contingency fit approaches are used to measure alignment. It also implies that it may be harder over time to reconcile the results from studies that use different measures. As such, the study of strategic IT alignment could splinter into smaller subfields that develop around individual contingency measures.

The concept of a cumulative research tradition that spans the entire body of work on strategic IT alignment may, therefore, be elusive until such time as a more commonly accepted measure emerges or a way is found to reconcile the various indirect measures that crisscross the current literature. As an alternative to indirect measures of alignment that are based on separate assessments of strategy and IT, the literature has recently drawn attention to measurement scales to capture the state of IT alignment directly Preston and Karahanna, ; Yayla and Hu, ; Gerow et al.

Researchers have developed Likert-type scales to ascertain the perceived extent of alignment between IT and business strategies Gerow et al. Evidence suggests that these direct measures of alignment are robust and appropriate for testing theories about the antecedents Preston and Karahanna, and outcomes of alignment Yayla and Hu, For instance, Preston and Karahanna find that shared understanding about the role of IT in the organization affects IT alignment.

Lastly, in terms of direct measures, Bradley et al. While the study of strategic IT alignment has made significant progress in the last quarter century since the work of Henderson, Venkatraman, and others first emerged, there remains several important research questions that are still relatively unexplored. A lot can happen in 25 years. The fact that IT alignment is a perpetual priority for CIOs confirms that alignment is difficult but it also shows that alignment is a moving target.

IT is in a constant state of flux as new innovations enter the mainstream and as legacy systems are extended or retired. Business strategies are equally undergoing tremendous change as organizations embrace globalization and the need for greater digitization and agility. We see a continuing need for researchers to adapt and extend our knowledge of what it means for IT to be aligned with business.

This will require fresh thinking as the extant IT alignment paradigms are a product of a simpler time when IT was less complicated and business strategy was more stable. To reflect the reality of IT and business strategy in modern society, a new approach is needed to account for the ways that businesses are increasingly attempting to exploit synergies between corporate, strategic business unit, and functional-level activity. As a departure from extant research that conveniently restricts IT alignment research to single strategy or single segment businesses Sabherwal and Chan, ; Oh and Pinsonneault, ; Tallon and Pinsonneault, , research has recently attempted to conduct the type of multi-level or cross-level analysis that is required to fully embrace contemporary organization structure and operating models Fonstad and Subramani, ; Queiroz, ; Reynolds and Yetton, While we have learned much about alignment between IT and a single business strategy Chan and Reich, , further research is warranted to enhance our understanding of the multidimensional nature of strategic alignment in contemporary organizations with more complex structural forms Fonstad and Subramani, As we look to the future, we see three key themes that will guide future research on IT alignment.

These themes are: 1 the micro-foundations of IT alignment, 2 the rise of digital business strategy , and 3 innovation ecosystem and value co-creation. These three themes form a starting point for developing a rich set of questions to guide future IT alignment research in academia and to direct practicing managers and executives to the challenges and opportunities that lie ahead for IT alignment.

These themes emerge from our informal conversations with academic and IT industry thought leaders in recent years, from emergent trends and themes in the broader IS literature, and from the many papers submitted to this special issue and our subsequent interactions with authors, reviewers, and special issue associate editors. Scholars have increasingly come to see alignment as resulting from choices that individuals make within an ever changing corporate environment. If these choices can be identified, a reasonable next step is to expose the behaviors that precede them.

This line of thought is consistent with the micro-foundations theory of management where analysis is conducted at the behavioral strategy level to integrate the actions of goal-seeking economic agents Teece, ; Devinney, This approach can yield more actionable insights as it directs researchers to look across levels of analysis within the organization.

Our ability to tie different levels of analysis together calls for a broader, integrative theory of IT alignment, something that goes beyond prior multi-level discussion Klein et al. This is not a trivial undertaking, however, as different levels of analysis often describe different worlds with different vocabularies Kincaid, Just as the language that describes alignment at the firm level contrasts with that used to describe alignment at the process level, so too are there key differences between how alignment is described at the corporate, strategic business unit, and function levels.

These differences reflect the fact that the nature of alignment phenomena changes whenever distinct levels of analysis are considered. The micro-foundation concept remains controversial and subject to considerable scholarly debate Devinney, To advance the micro-foundations notion, scholars would need to consider the way that strategic choices can be aggregated across actors and time to predict performance Foss and Lindenberg, This offers a compelling logic for alignment scholars since the sine qua non of micro-foundational research is aggregation Barney and Felin, By design, micro-foundation analysis is concerned with how micro- or individual-level factors aggregate to higher levels.

In the context of strategic IT alignment, this allows researchers to look at how function-level decisions align IT with key business activities and how these function-level outcomes then aggregate to the firm level. It may also mean that a decision to continue emphasizing IT alignment at the corporate or firm level overlooks the argument that this is nothing more than an aggregation of IT alignment outcomes at lower levels within the firm. It follows that researchers might miss a wealth of disaggregated effects that could provide new and useful insights by continuing to focus on alignment between IT and business strategy at the corporate level exclusively.

Why is it that the IT alignment literature is not constrained by the same biases and risk aversion that characterize behavioral theories of the firm? If the measurement of IT alignment is based on perceptual measures of IT and business strategy and perceptions are potentially flawed, alignment measures could be equally flawed. Can IT be aligned when the behaviors of individual stakeholders corporate and business unit IT management, service providers, and IT outsourcers do not show the same proclivity toward the business strategy?

IT managers in the same firm might not see business strategy in the same way. How could tensions that arise between corporate and business unit management affect the ability of organizations to achieve and maintain alignment at both the corporate and business unit levels? New ITs are fundamentally altering traditional business strategies, enabling organizations to reach across boundaries of distance, time, and function Kohli and Grover, ; Rai et al. The rise of digital business strategy — principally, strategy formulated and executed by leveraging digital resources Bharadwaj et al.

The implications of net-enabled businesses — as some researchers have revealed — is a reduced role for strategic alignment but we feel this is somewhat shortsighted Bharadwaj et al. The problem lies in the definition of strategic IT alignment as the degree of IT support for business strategy. This definition implies that IT has always been subservient to, or lagged behind, business strategy. In these instances, misalignment is usually attributable to insufficient or misdirected IT investment where the level of IT investment might be on target but organizations have simply invested in the wrong IT.

This is consistent with prior calls in the literature to explicitly account for the bidirectional link between business and IT as articulated in the original work by Henderson and Venkatraman and what Rockart et al. As organizations digitize their entire businesses and build digital options to capitalize on future opportunities, business processes that execute business strategy are becoming progressively dependent on IT Bharadwaj et al. This would then imply that executing digital business strategy is dependent on the ability of firms to leverage IT through business processes, in which case two-way alignment becomes a key mechanism through which IT creates value.

An organization that holds IT-based digital options but who then elects to not exercise those options — perhaps because of insufficient market opportunities or simply because of poor managerial decision making — would be exposed to misalignment and to the prospects of sub-par firm performance Sambamurthy et al.

Consequently, we see a rationale for including options thinking in a discussion of what organizations can do to create and sustain IT alignment Fichman, Organizations that are able to achieve perfect alignment between IT and business strategy have neither IT shortfall IT fully supports business strategy nor IT underutilization all digital IT options are exercised. The rise of digital business strategy also focuses attention on the decision variables that contribute to IT alignment.

Contemporary organizations are changing the way they utilize IT in combination with products and services Queiroz and Coltman, Yet we know little about whether changes in the way organizations use IT affect what it means to be aligned. Organizations are facing tremendous pressures to buy commodity technologies rather than build proprietary systems. This does not mean that IT alignment has ceased to matter but it does mean perhaps that IT alignment can be easily replicated by competitors.

The logic of digital business strategy argues that IT alignment may become less meaningful since IT is the strategy. Therefore, IT and business strategy are indistinguishable. Is this really the case? If the presence of IT shortfall and IT underutilization affect the ability of organizations to execute their digital business strategies, what are the implications of two-way strategic alignment for firm performance?

Is the link between two-way strategic alignment and performance moderated by the level of strategy digitization? How do forces and mandates perhaps to enhance security in a digital world affect IT alignment? However, any given innovation in a modern multi-process organization will rarely stand alone. Rather, new value propositions become possible when suppliers, business partners, and customers work together to co-create value Spohrer and Maglio, ; Ordanini and Parasuraman, Success depends upon an innovation ecosystem that comprises several partners in multi-organizational relationships to develop new products, services, and processes Adner, Using a tightly integrated digital IT platform, Apple and partners made it simple and easy for customers to enjoy online content by seamlessly downloading songs, books, and applications using different devices, ensuring that distinct business functions inter-operate as the business grows with complementary products and services.

The implications of IT innovation ecosystems are visible in the proliferation of outsourcing, cloud technologies, software-as-a-service, and the demand for seamless interoperability of products and information flows that are increasingly central to business strategy and its operations. Future IT alignment research will need to evolve from a singular firm perspective to focus more on how IT platforms support or sometimes hinder the joint creation of value in innovation ecosystems.

IT-based platforms are ideally positioned to support sharing of assets, development of new capabilities, knowledge sharing, and IT governance Grover and Kohli, By emphasizing value co-creation in innovation ecosystems, IT alignment researchers will need to focus more on how different companies with different IT resources and capabilities can interoperate to ensure that all participants in the ecosystem capture their representative share of any newly created business value.

Business models based on IT do not need to be hosted or owned by any specific organization and yet the implications for IT alignment of such concepts as open innovation, value networks, and platform leadership have yet to be widely discussed. From an IT alignment perspective, these developments create a degree of complexity when organizations no longer need to own a process or the IT that supports that process.

Regardless of the ownership question, the ensuing IT alignment can still drive firm performance. Evidence in the literature that IT alignment does not directly affect firm performance but rather impacts intermediate variables such as process agility is reflective of this trend Tallon and Pinsonneault, If this trend continues, IT alignment will increasingly become a means to an end rather than an end in itself.

How can multiple participants in the ecosystem align different IT resources to equitably partake in value co-creation? Where will the individuals with the most knowledge about how to achieve IT alignment reside in the innovation ecosystem and how transferrable is their knowledge within the ecosystem?

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As IT becomes more embedded within the ecosystem, how can managers enhance alignment with partners while ensuring that they do not behave opportunistically? In the same vein, how might the effects of IT alignment on one participant spillover to other participants within the ecosystem? While IT alignment is associated with improved agility in standalone organizations, how does the locus of IT alignment in an ecosystem impact agility in individual firms or across the ecosystem?

The papers in this special issue on IT alignment offer valuable insights into the key directions we have discussed in this paper. Collectively, they extend our understanding of alignment and how it creates value for organizations. This special issue comprises three standalone research papers. The authors make a persuasive case for how IT alignment adds value through different strategic drivers.

Their analysis of US banks reveals a variety of IT governance mechanisms that shape social alignment. What is unique about this work is its focus on the practices of aligning IT based on what IT managers do on a daily basis. These three papers touch upon useful research themes that offer new insights into the evolving IT alignment literature and opportunities for future work.

This special issue began with the premise that it was time to refresh our understanding of IT alignment. We begin with an assessment of what we know about IT alignment based on a quarter century of research. This discussion examines how IT alignment has been conceptualized and measured as well as identifying enduring challenges for developing a cumulative body of research.

Next we explore the future research agenda based on three themes. These prospective paths for future strategic IT alignment research contain many challenges but they also indicate that there is much that we still do not know — even after 25 years of research — about IT alignment. Strategic IT alignment has a bright future and will likely remain a key area of interest for practitioners and academics wishing to add to the growing IT alignment literature.

As such, while we might point to work by Henderson and Venkatraman as one of the foundations of the field, we must equally recognize the essential contributions of what were then Ph. The authors are aware of only one effort in the mids to measure strategic IT alignment using each of the four quadrants in the Henderson and Venkatraman model. That work was led by Dr. Skip to main content Skip to sections. Advertisement Hide. Download PDF.

Theoretical background

Strategic IT alignment: twenty-five years on. Editorial First Online: 17 February Indirect measures of IT alignment The indirect measures of fit proposed by Venkatraman have been frequently applied by IT researchers to calculate the extent of alignment between business and IT strategy. Direct measures of IT alignment As an alternative to indirect measures of alignment that are based on separate assessments of strategy and IT, the literature has recently drawn attention to measurement scales to capture the state of IT alignment directly Preston and Karahanna, ; Yayla and Hu, ; Gerow et al.

Micro-foundations of IT alignment Scholars have increasingly come to see alignment as resulting from choices that individuals make within an ever changing corporate environment. Several questions need to be considered regarding the implications of using different theories and findings across multiple levels of analysis since outcomes from one level could aggregate or spillover to another level.

Prior research suggests that individual managers are cognitively limited Bond et al. If there is disagreement among management as to the strategic direction of the organization, what might this say about the state of IT alignment in the company? It could mean perhaps that instances of over-reaching or temporary alignment, as discussed in Sabherwal et al. Advancing the micro-foundations of IT Alignment requires greater understanding of such questions as: Why is it that the IT alignment literature is not constrained by the same biases and risk aversion that characterize behavioral theories of the firm?

The existing literature has repeatedly acknowledged the impact of social alignment on intellectual alignment Reich and Benbasat, ; Reich and Benbasat, ; Kearns and Lederer, ; Kearns and Sabherwal, but beyond that there is still the question of what other variables might hinder or facilitate the pursuit of IT alignment. In recent years, researchers have indicated that IT governance might affect IT alignment if it can help to develop a system of accountability that surpasses a simple focus on IT planning Weill and Ross, ; Wu et al.

IT governance transcends the issue of structure — centralization or decentralization Brown and Magill, — to more existential questions around application ownership, security, exception management, and IT funding. Not every participant in an industry can afford to invest in pacing technologies; this is typically what differentiates the leaders who do from the followers who do not. The critical issue in technology management is balancing support of key technologies to sustain current competitive position and support of pacing technologies to create future vitality.

Commitments to pacing technologies or potential breakthroughs are hard to justify in conventional, return-on-investment terms.

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Indeed, these commitments can be thought of more accurately as buying options on opportunity. Relatively modest commitments—and thus, modest downside risk—can give the potential for large upside advantage. Realizing that potential depends on still-unresolved technical and market contingencies. If the option is not pursued, the potential does not exist. Receptor modeling technology is now a recognized key technology in pharmaceuticals. An effective research and development program must include some investment to build a core of competence in pacing technologies and some effort to gain intelligence from sources such as customers, universities, and scientific literature to help identify and evaluate these technologies.

At the same time, disciplined judgments about commitments to pacing technologies are necessary; enthusiastic overspending on advanced technology can undercut essential support of key technologies.

Exploring design-fits for the strategic alignment of information systems with business objectives.

Technologies mature, just as industries and product lines do. The younger the technology, the greater the potential for further development, but the less certain the benefits. However, a mature technology can often be a key technology. Many Japanese firms use mature technologies as a major competitive weapon. The Sony Walkman, for example, was a wildly successful new product based on comparatively mature technologies. The Walkman fortuitously combined Sony's work on the miniaturization of its tape recorder line and its work on lightweight headphones.

Sony engineers were trying to make a miniature stereo tape player-recorder, but they could not fit the recording mechanism into the target package size. A senior officer realized that combining headphones with a non-recording tape "player" would eliminate the need for speakers, reduce battery requirements, and result in a small stereo tape player with outstanding sound. Sometimes a mature technology becomes a key technology when it is applied in a new context.

Empire Pencil gained a major cost and quality advantage by using mature plastic extrusion technology as the basis of a new way to manufacture lead pencils. Conventional lead pencil manufacturing requires the use of fine-grained, high-quality wood, such as cedar, and a good deal of hand labor for assembly.

Research and Development

Materials are becoming more expensive, and damage to the graphite core during the assembly process causes quality problems. A development team was confronted with this question: How can we improve quality and cut costs? The team realized that wood powder in a plastic binder could simulate the fine-grained wood. From there it was a straightforward step to produce pencil stock in a continuous extrusion process, with wood powder and a core of graphite powder in a plastic binder.

Other mature technologies may be protected for example, by patents or proprietary treatment and thus give their owners a key competitive advantage. A Japanese grinding machine manufacturer successfully diversified into the manufacture of integrated circuit wafer equipment. A critical factor in its success was its proprietary mature machine technology. Examples like the latter one may tempt a firm in a mature line of business to diversify into new products and markets where its proprietary but mature technology could have a key competitive impact, but this sector D strategy is risky.

The better alternative is to look, as Empire Pencil did, for new technology to invigorate a mature or aging product line. A business or product line whose key technologies are mature faces a serious threat of being blind-sided by a competitor employing new key technologies. This is what Xerox did to the established copier manufacturers and what word processing did to the typewriter industry. As an industry or product sector matures, the key technologies often become manufacturing process technologies rather than product feature technologies.

This is the case in many mature industries, including chemicals, machine tools, consumer appliances, and food products. The technological strength of a business reflects the degree to which it has competence in, or proprietary control of, key product and process technologies. It also reflects the level of investment to sustain key technologies and to invest in pacing technologies.

An objective analysis of the competitive technical strength of each of the firm's strategic business units helps to answer three questions: Do we have the technological capacity to support our product and market strategy in each business? Are our strategies realistic? What do we need to accomplish to build the technological strength our strategies require? The answers to the questions posed at the beginning of this article need to be reviewed regularly if they are to remain relevant to the business strategy.

Managing technology effectively means setting and communicating strategic priorities, managing projects to get timely results, and effectively using linkage inside and outside the firm. With the globalization of technology, links with the outside have become imperative. These include links with customers and vendors, as well as with other sources of technology, such as universities.

While outside connections can help a firm identify new opportunities and avoid unpleasant competitive surprises, links within the firm must also be carefully managed. Nayak and J. Ketteringham, Breakthroughs! New York: Rawson, , pp. First time here? Five sets of questions are useful in systematically examining the relationship of a company's program of managing technology to its business strategy: Does the company have a clear product and market strategy? What markets does it want to attack? What markets does it intend to defend? What product and service attributes will accomplish these goals?

What technologies support the product and market strategy? Which ones produce competitive advantage in existing markets by adding value or lowering costs? Which ones promise to support new market initiatives or to define a new plateau of product performance? What technological successes can the company support or exploit? Are options for technology acquisition in-house development, licensing, academic support, etc. Does the company have the means to answer, and keep reviewing the answers to, these questions? Approaches to Managing Technology The meaning of technology is straightforward: knowing how to do something well.

Linking Technology Management to Strategy We believe that a firm's development and use of technology can be managed so that it effectively supports the firm's business strategy. We find it useful to examine a firm's technologies in light of two questions: What is the significance of the technologies in the firm's portfolio, as measured by their competitive impact and maturity?

In each product area or business, how strong is the firm's technological competitive position? Classification of Technologies by Competitive Impact We identify three broad classes of technologies in a typical firm's technological portfolio. Base Technologies. Key Technologies. Pacing Technologies. Exploiting Mature Technologies Technologies mature, just as industries and product lines do. Measuring Technological Strength The technological strength of a business reflects the degree to which it has competence in, or proprietary control of, key product and process technologies.

Competitive technological strength can be characterized as follows: Dominant. The business is a technological leader and recognized as such. It has a demonstrable commitment to technology and to creativity. The level of technological support and effectiveness in managing technology allows the business to set independent technical directions. The business has the technological capacity to remain competitive.

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It can manage continued improvement in technology to sustain its position, but it does not have the capability to take technological leadership on a sustained basis. The business is a technological follower. It must frequently catch up with stronger competitors. The technical competence of the business is comparatively low, and most technical efforts are short-term, firefighting efforts to improve products or processes. Incremental Research and Development. These programs have well-defined commercial objectives. The likelihood of technical success is relatively high. Thus, the costs and benefits of the program can be defined rather explicitly.

Modifying temperature and pressure settings to improve yields of a chemical process is an example. Most technologies used in these programs are key technologies; the remainder are base technologies. Radical Research. These programs take bold steps forward in applying particular, often pacing, technologies.

A new technology may be brought to bear in a product: for example, a grammar-correcting routine in word-processing software. Established technology may be used in a radically different way: plastic extrusion technology used to manufacture "conventional" lead pencils, or electronic sensing and control technologies in a cooking device. Fundamental Research. These programs are designed to build a new dimension of competence or to investigate the potential usefulness of an area of scientific knowledge.

The development of ceramic materials suitable for high-temperature applications might be investigated, for example. Such programs must pass two important screens: First, are the results potentially relevant to the company's product and market strategy—that is, could a successful result help the firm get where it wants to go? Second, is an internal project the most effective way to acquire the potential technology? Keeping Technology Relevant The answers to the questions posed at the beginning of this article need to be reviewed regularly if they are to remain relevant to the business strategy.

Joint teams help assure that product and process developments can move into implementation smoothly and on schedule. Hold to time commitments and schedules. If a development cannot be completed in a timely fashion, it probably is not worth pursuing.