IMT 1S16 (IT strategy)

Learning objectives of this session

The significance of technology, innovation & their
management.
The process of managing technology
The meaning of innovation
The process of managing innovation
The meaning of strategy
The strategy process
Understanding an industry & its impact
 Strategic perspective
Now days, new products ,processes,& approaches are
emerging faster than in past.as result ,the management
of technology & innovation has been pushed to the
forefront as a major focus for both business & society.

Developing Optimal IT Strategy Through Business

Context, Applications, Technology Infrastructure,
Organizational Capability and Governance. Stephen
Law
Strategic Technology & E-Business Manager
Inland Revenue, New Zealand
 Importance of technology &
innovation to business
The impact of technology on business is seldom
one-dimensional ,but rather ,new technology
causes cascading effect within firms. In economic
theory ,price is a function of supply & demand
.But the technology has resulted in both more
demand & lower prices.
New technology has made more information
available to consumers.
As more information becomes available ,potential
buyers become more aware of opportunities to
obtain and use products.
 Example-
Retail is the one of the oldest industries in the
united states .Wal-Mart is the worlds largest
retailer & is a good example of this cascading
effect practice.
 RFID
Radio-frequency identification (RFID) is the
wireless use of electromagnetic fields to
transfer data, for the purposes of
automatically identifying and tracking tags
attached to objects.
 Continue-
The interaction between society & technology
can viewed in terms of pushing & pulling.
Pushing society- mean that new innovations in
technology lead to changes in society that were
not expected.
Ex society was not expecting the development
of internet
Pulling society-means sometimes business can
also pulled by society that there be new
innovations.
 Importance of technology &
Innovation to society
The impact of technology is not simply on
individual firms.it also has a broader societal
impact both positive & negative.
Positive impact of technology can be
examined in a single state ,Washington. This
state has aggressively developed its
technological foundation.
 Technology & innovation don't stand
still
Technology & innovation influence both the firm
society as a whole,& this impact is ongoing. Entire
industries can be created or can disappear very quickly
because of new technologies.
Ex-what has happened to the recoded music industry.
In the last 40 years ,the dominant technology Has
changed from records(Lps),to eight tack tapes, to
cassette tapes, to compact discs. turntables are
antiques ,& eight-track players are collectibles. Now
with the emergence of MP-3 & other types of new
technologies(4g phones),CDs & MP-3 players may soon
become obselete.
 Study of technology ,innovation & its
management
Technology & innovation imperative is
organization-wide ->technology & innovation
influence not only the technical aspects of
business the behaviors & attitudes of
individuals & groups within organization.
Technological & innovation imperative
is worldwide
It is difficult to segment technology as being from one
country or another ,ex-Apple Inc. many Taiwanese
semiconductors
The institutions in the various domains can be
described as regulatory institutions are the laws and
regulations in a given country.
Nominative institutions are the norms of the industry
& profession.
Cognitive institutions-are those that come those that
come from broader society & shape
the individuals behavior. This is viewed as culture of the
country
 Value creation is the key
Technology & Innovation must add value to
the firm or to society to flourish.
Goal of technology & innovation processes is
to add value , there is a profit motive for the
business or an efficiency & effectiveness
motive for nonprofits.
Discuss the case study HLL goes adult with its
ice creams(taken from business today, May 8,
2005)
 Key definition of technology
Key definition
Scientific discovery

Invention

Innovation

Technology
 Technology
Technology has been defined in variety of ways-
The processes used to change inputs into outputs
The application of knowledge to perform work
The theoretical & practical knowledge ,skills, &
art crafts that can be used to develop products as
well as their production & delivery system the
technical means people use to improve their
surroundings.
Technology as the practical implementations of
learning's & knowledge by individuals &
organizations to aid human endeavor .
 Management & technology
Technology also implies a process that
involves the elements of strategic
management.
Management of technology is defined as
linking engineering ,science ,& management
disciplines to plan ,develop, & implement
technological capabilities to shape &
accomplish the strategic & operational
objectives of an organization.
 Discuss case studies
Cisco system (source cisco company report
cisco fesses up to bad news inforword .April
16,2001)
Nike (source- nike company reports ;supply
chain debacle ,Internet week ,march
5,2001,& nike rebounds:how & why nike
recovered from its supply chain disaster CIO
magzine ,june 15 ,2004.
 Importance of management &
technology
The rapid pace of technological change
demands a cross-discipline approach if
economic development is to occur in an
effective manner to take advantage of
technological opportunities.
As technology changes , the tools of
management must change ,but the process of
determining what those new tools should be
is its infancy, etc.
 Making decisions for managing
technology
Process of management technology ex-iBot
,a new type of wheelchair that has been
developed.
Decisions for managing technology
There are key decisions that need to be made
as businesses & managers seek to manage
technology .the decision initially focuses on
the strategic posture the firm wants to
assume.
Discuss the case study IT at ICICI Bank
 Innovation
The process whereby new & improved
products processes, materials, & services are
developed & transferred to a plant & or
market where they are appropriate.
 Tools for managing technology
Analyze the industry structure both
domestically & internationally
Understand the firms capabilities & those of
its competitors
Conduct a financial analysis of the product &
firm
Forecast future changes.
 Innovation
The process whereby new & improved
products ,processes, materials,& services
,materials,& services are developed &
transferred to a plant & or market where they
are appropriate.
JIT-inventory management is a process
innovation that ensures the inputs into a
production process are there just as they are
needed for the process.
 Management Innovation
Successful innovation management is a process
that ensures the inputs into a production
process are there just as they are needed for the
process such a process innovation allows firms to
save storage & capital costs.
Management of technology encompasses the
management decision
It requires fostering an environment where
innovative thought & work are encouraged
 Making decision of managing
innovation
Fostering creativity is essential to managing
innovation.
It is more than encouraging individuals to think
outside the proverbial box.
Separate funds for innovation
Periodic reviews of informal proposals by a group
outside line management.
Clear direction on studies to be done & follow-
ups that expected .
Sets of realistic expectations.
 Cyclic innovation process model
Strategies
1Feasibility innovation
transfer
studies Forecast
scientific Acquire
change
technical mkt technology
Cycle of
technology
development
Integrate & Implement
exploit technology
technology

Actions
manufactu
Process design
rer market.
test rollout
 Discussion with book case study
X-rite-The management of innovation does
not need a radical shift in a product ;instead ,
it can be as simple as fresh insight on how a
product can be used .X-rite traditionally
produced equipment to match color industrial
settings.
 Strategic process
Learning objectives
Basically this chapter integrates the strategic
process perspective with the management of
technology & innovation(MTI) in the firm.
the meaning of strategy
Continuous versus radical technology
,offensive versus defensive technology key
MTI key concerns in strategy
The strategy process
 Introduction
The firms strategic efforts are the actions that
help direct where the firm is going .
These actions & activities should fit together
to move the firm in a consistent direction.
To be successful ,the strategy of the firm & its
management of technology should be
intertwined.
Discuss the case study Polaroid corporation.
 Specific issues that managers need to
address
Why firms should couple their strategic
planning & strategic implementation with MTI
Specification of the strategic process that puts
into practice the integration of technology &
strategy.
 Strategy-
Strategy is a coordinated set of actions that fulfill a firms
objectives, purposes,& goals. It is not a single act occurs in
a firm.
Strategic planning-is the process that lays the groundwork
& direction of the firm over the next several years.
Strategic management is an ongoing process through which
organization defines the nature of the business in which
the firm will be active ,the kind of economic & human
organization it intends to be, & the nature of the
contribution it intends to make to its various constituents.
Polaroid corporation failed because its strategy &
technology became separated
 Internal & external strategic
interactions
1.The fundamental is point that technology
affects the strategic process in multiple places.
Technology affects the organizational structure,
people ,processes, procedures,& systems.
Additionally ,external environmental factors,
such as politics, rate of innovation ,laws,& public
policy ,all influence the interaction of people
,processes , & structures.
 Technical capability
Technical capability address how the firm
approaches technology it already has or
wishes to have in the future. Therefore , the
firms approach to these capabilities can be
classified in one of the three ways : destroy,
preserve, or develop.
The approach of technology is a strategic
decision that must be implemented through
People,structure,& process.
 Destroying
Is concerned with eliminating certain
technological capabilities in the organization &
replacing them others.
Developing new technology capabilities can
give firm a competitive leap over others in the
industry by changing the playing field.
These capabilities can be purchased externally
or developed internally.
 Market capabilities
Technology is viewed in some texts as an input to strategy
but not as a central factor.
The argument here is that technology should be considered
a central component of the firms strategy
Technology should be considered even at the most basic
level of the firm
The firms various proficiencies must be consistent &
intertwined with its technological capabilities.
The firms capabilities, including technology ,provide the
firm with its competitive advantage .
The goal is that the competitive advantage be sustainable
by the business over a significant period of time .
The goal is a sustainable competitive advantage.
 Technology & competitive advantage
A competitive advantage is what the firm
does better than any of its competitors.
The ability to perform an activity better than
competitors will lead to a sustainable
competitive advantage only if the activity is
something that the customers value & other
firms cannot easily duplicate.
 Continuous vs. radical technology
Technology development can be classified as
either a continuous or radical.
Continuous technology development is the
personal computer.
Radical technology development causes a
dramatic change in the way things are done.
The initial introduction of computer altered
the way information was processed & stored
in organization & by individuals .
 Next generation technology
Continuous & radical technologies can viewed
as the ends of a continuum.
In between on this continuum are next-
generation technologies.
 Disruptive technology
Concept of disruptive technology was
popularized by clayton Christensen of Harvard
in his book the innovators dilemma.
It is similar to radical technology .
Christensen differentiates his concept by
arguing that a technology does not always
have to be radical to be disruptive.
Ex-open source software.
Offensive vs. defensive technology
Offensive technology in a way that is not being
used by competitors so that it gains a
competitive advantage. This advantage may
come from lower costs for the firm or from
providing value more effectively or efficiently
to customers.
Ex-discuss two leading houses sothebys &
christies
 Defensive technology
A firm can have a defensive technology & obtain
technology that others already employ.
The firm making the purchase in this situation
feels it must employ that technology to be
competitive.
This use of technology will not give the firm an
advantage, but it allows the business to match
competitors .
Another defensive use of technology can occur
when a firm acquires or employs a particular
technology to block its use by others.
 Strategic process in MTI
The strategic process of a firm can be broken
down into three principal activities
Planning
Implementation
Evaluation & control
 planning
Planning is defined as the systematic
gathering information.
Activities in planning process
Data gathering
Mission generation
Objective setting
Strategy establishment
 Information gathering is a part of
planning
Information gathering is a critical part of the
planning process.
Internal analysis the internal capabilities are
the easier of the two to understand.
The internal environment focuses on the
internal operations & resources of the firm.
 Important points
Barraging power of buyers
Bargaining power of suppliers
Strategic groups-is a group of firms that
compete in a similar manner (customer,
product, geography).
There can be a number of ways to divide a
given industry into strategic groups.
 Continue-
All the elements of technological analysis are
important .financial aspects of the firm are
critical part of technological analysis.
The money to support its choices the firm will
be unable to exploit its innovations & gain
competitive advantage.
 Financial analysis
A financial analysis examines the income
statement & balance sheet of the firm to
understand how it is performing.
External analysis once the financial analysis
of the firm is complete ,there is a need to also
gather information on the firms external
competitive environment.
 Porter industry model
Threat of new
1. intranet

Rivalry among Power of

Power of competitors suppliers
buyers

Comple
mentors Threats of
substitutes
 Information gathering process
overview
Gathering information for the planning process
that financial & industry information is critical.
IBM- IBMs strategy has become to deliver
products on demand .they want to create
technologies ,products,& services that meet their
customers needs better & faster their
competitors. to accomplish this ,IBM has
increased its information gathering with
customers & implemented a set of software
application acquisitions
 Q&A
Who are the champions of innovation in the
firm?
How are innovation & technology driven in the
firm?
T&F
Disruptive technology & radical are same-t/f
Development of personal computer is example of
continuous technology-T/F
Preserve or develop is same in technical
capabilities-T/F
 Continue-
What is strategy?
What is strategy management how you will
defined the term It strategy ?
Defined the term MTI & their crucial aspects?