NEW TECHNOLOGY
Company Products & Services
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NEW TECHNOLOGY FOR THE INDUSTRY |
~ .. NEW TECHNOLOGY |
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~ .... TECHNOLOGY INNOVATION |
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~ ...... Uncertainty of Technological Innovation |
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~ ............ NEW TECHNOLOGY RISK |
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~ ~ ...... Feasibility |
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~ ~ ...... Uniqueness |
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~ ~ ...... Future Development |
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~ ~ ...... Process Efficiency |
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~ ~ ...... Pay-back Certainty |
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~ ~ ............ Operations |
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~ ~ ............ Markets + Trade Cell |
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~ ~ ............ Products |
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~ ~ ............ Competitors |
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~ ...... Cost of Innovation |
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~ .... TECHNOLOGY DIFFUSION |
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~ ...... Prime Adopters |
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~ ...... Primary adopters |
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~ ...... Secondary adopters |
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~ ...... Tertiary adopters |
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~ ...... Inert adopters |
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~ ...... Selective Exposure |
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~ ...... Selective Perception |
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~ ...... Selective Retention |
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~ ............ NEW TECHNOLOGY ADOPTION |
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~ ~ ...... Fixed Technology Spend |
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~ ~ ...... Technology Innovation Goals |
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~ ~ ...... Technology Evaluation Goals |
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~ ~ ...... Ad Hoc Technology Innovation |
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~ ~ ...... No Technology Goals |
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~ ~ ............ Operations |
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~ ~ ............ Markets + Trade Cell |
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~ ~ ............ Products |
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~ ~ ............ Competitors |
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~ .... PRODUCT TECHNOLOGY |
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~ ...... TECHNOLOGY EVOLUTION |
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~ ...... TECHNOLOGY DEVELOPMENT |
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~ ............ TECHNOLOGY DECISIONS |
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~ ~ ...... New Technology Evolution |
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~ ~ ...... Obsolete Technology Replacement |
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~ ~ ...... Technology Diversification |
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~ ~ ...... Technology Utilization |
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~ ~ ...... Competitive Technology Adoption |
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~ ~ ............ Operations |
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~ ~ ............ Markets + Trade Cell |
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~ ~ ............ Products |
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~ ~ ............ Competitors |
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~ ...... MANAGEMENT DECISIONS |
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~ ...... TECHNOLOGY INITIATIVES |
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~ ............ TECHNOLOGY INITIATIVES |
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~ ~ ...... Internal Development |
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~ ~ ...... Joint Ventures |
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~ ~ ...... Licensing |
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~ ~ ...... Purchase |
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~ ~ ...... Ad Hoc |
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~ ~ ............ Operations |
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~ ~ ............ Markets + Trade Cell |
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~ ~ ............ Products |
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~ ~ ............ Competitors |
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~ ...... TECHNOLOGY SCREENING |
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~ ............ TECHNOLOGY SCREENING |
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~ ~ ...... Formal Technology Targets |
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~ ~ ...... Informal Technology Targets |
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~ ~ ...... Senior Management Responsibility |
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~ ~ ...... Middle Management Responsibility |
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~ ~ ...... Ad Hoc Screening |
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~ ~ ............ Operations |
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~ ~ ............ Markets + Trade Cell |
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~ ~ ............ Products |
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~ ~ ............ Competitors |
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~ ...... TECHNOLOGY IMPACT |
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~ ...... TECHNOLOGY COSTING |
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~ ...... TECHNOLOGY IMPLEMENTATION |
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~ ............ TECHNOLOGY IMPACT |
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~ ~ ...... New Technology Operation Criteria |
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~ ~ ...... New Technology Performance |
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~ ~ ...... New Technology Durability |
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~ ~ ...... New Technology Reliability |
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~ ~ ...... New Technology Longevity |
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~ ~ ............ Operations |
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~ ~ ............ Markets + Trade Cell |
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~ ~ ............ Products |
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~ ~ ............ Competitors |
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~ ............ NEW TECHNOLOGY FUNDING |
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~ ~ ...... Costs Funded from Reserves |
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~ ~ ...... Costs Funded from Profits |
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~ ~ ...... Costs Funded from Cash-Flow |
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~ ~ ...... Costs Funded from Equity |
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~ ~ ...... Costs Funded from Loans |
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~ ~ ............ Operations |
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~ ~ ............ Markets + Trade Cell |
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~ ~ ............ Products |
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~ ~ ............ Competitors |
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~ ............ TECHNOLOGY IMPLEMENTATION |
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~ ~ ...... Technology Security |
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~ ~ ...... Technology Duration |
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~ ~ ...... Technology Cost Elasticity |
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~ ~ ...... Technology Lead-Times |
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~ ~ ...... Technology Supply Factors |
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~ ~ ............ Operations |
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~ ~ ............ Markets + Trade Cell |
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~ ~ ............ Products |
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~ ~ ............ Competitors |
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~ .... HISTORIC FINANCIAL DATA |
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~ .... Historic Balance Sheet |
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~ ~ ...... Historic Costs & Margins |
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~ ~ ........ Historic Financial Ratios & Margins |
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~ ~ .......... Historic Operational Ratios & Margins |
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~ .... Financial forecast notes |
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~ .... NEW TECHNOLOGY FINANCIAL FORECASTS |
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~ .... Base Forecast : Median Market Scenario Balance Sheet Forecast |
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~ ...... Base Forecast : Median Market Scenario Operational Costs Forecast |
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~ ........ Base Forecast : Median Market Scenario Financial Ratios |
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~ .......... Base Forecast : Median Market Scenario Operational Margins |
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~ .... New Product Development Balance Sheet Forecast |
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~ ...... New Product Development Operational Costs Forecast |
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~ ........ New Product Development Financial Ratios |
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~ .......... New Product Development Operational Margins |
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~ .... New Technology Investment Balance Sheet Forecast |
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~ ...... New Technology Investment Operational Costs Forecast |
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~ ........ New Technology Investment Financial Ratios |
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~ .......... New Technology Investment Operational Margins |
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~ .... Customer / Order Processing Systems Investment Balance Sheet Forecast |
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~ ...... Customer / Order Processing Systems Investment Operational Costs Forecast |
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~ ........ Customer / Order Processing Systems Investment Financial Ratios |
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~ .......... Customer / Order Processing Systems Investment Operational Margins |
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~ .... Systems Investment Balance Sheet Forecast |
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~ ...... Systems Investment Operational Costs Forecast |
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~ ........ Systems Investment Financial Ratios |
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~ .......... Systems Investment Operational Margins |
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~ .... Materials & Energy Cost Scenarios Balance Sheet Forecast |
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~ ...... Materials & Energy Cost Scenarios Operational Costs Forecast |
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~ ........ Materials & Energy Cost Scenarios Financial Ratios |
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~ .......... Materials & Energy Cost Scenarios Operational Margins |
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~ .... Plant & Equipment Cost Scenarios Balance Sheet Forecast |
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~ ...... Plant & Equipment Cost Scenarios Operational Costs Forecast |
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~ ........ Plant & Equipment Cost Scenarios Financial Ratios |
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~ .......... Plant & Equipment Cost Scenarios Operational Margins |
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~ .... New Product & New Technology Cost Scenarios Balance Sheet Forecast |
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~ ...... New Product & New Technology Cost Scenarios Operational Costs Forecast |
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~ ........ New Product & New Technology Cost Scenarios Financial Ratios |
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~ .......... New Product & New Technology Cost Scenarios Operational Margins |
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~ .... Profit Impact From Process Cost Reduction Balance Sheet Forecast |
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~ ...... Profit Impact From Process Cost Reduction Operational Costs Forecast |
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~ ........ Profit Impact From Process Cost Reduction Financial Ratios |
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~ .......... Profit Impact From Process Cost Reduction Operational Margins |
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~ .... Capital Investments Options: Process Plant & Equipment Balance Sheet Forecast |
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~ ...... Capital Investments Options: Process Plant & Equipment Operational Costs Forecast |
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~ ........ Capital Investments Options: Process Plant & Equipment Financial Ratios |
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~ .......... Capital Investments Options: Process Plant & Equipment Operational Margins |
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~ .... Financial data definitions |
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The process of technological innovation is one of converting uncertainty to
risk. Corporate work goes into tailoring the messy process of invention to a
form suitable for management's needs for profitability and benefit, which among
others, must be answered on insufficient evidence, by individuals confronted
with more information than they can handle. The inherent uncertainty of
innovation rests in no small measure on the non-rational characteristics of
change.
The process takes time and cost money. The rate at which costs pile up, make
small beginnings rapidly grow to major financial commitments, all before the
uncertainties of development can be resolved. The company incurs the growing
danger of yielding to the momentum of its own commitment.
From the point of view of corporate decision the process of change and
innovation is essentially one of grappling with uncertainty, a process made
more dangerous by growing pressures of time and money. The very resolution of
uncertainties establishes commitments which make turning back more difficult,
regardless of what future evidence may show.
The problem of innovation within the company is therefore a problem of decision
in the face of continuing uncertainty. A man must take leaps - not once at the
beginning but many times throughout the process - in the face of uncertainty
and on the basis of inadequate evidence. The need for such leaps of decision
grows out of the uncertainty inherent in the process. A company cannot escape
it by careful planning or by gathering exhaustive data. The uncertainties
resist resolution ahead of time and the process of attempting to resolve them
is itself a form of commitment, which plays its role in the cost curve and has
its own momentum.
1. The inherent uncertainty of Technological Innovation
Management involved in technical innovation confront a situation
in which the need for action is clear, but there is both danger and
opportunity, and it is by no means clear what to do. This situation is
troublesome and precarious for the company. To be a manager in a time of
corporate uncertainty is to be engulfed oneself in uncertainty and anxiety. As
long as this situation pertains there are no clear objectives to reach and no
measures of accomplishment, and it is not clear what to try to control. A
company cannot operate in uncertainty, but it is adequately equipped to handle
risk. It is, from at least one point of view, precisely an organization
designed to uncover, analyze, evaluate and operate on risks. Accordingly, the innovative
work of a company consists in converting uncertainty to risk. At this point,
management can play the investment game. The game requires analysis of
investment alternatives, estimating markets, costs and technical feasibility,
and making investment decisions. The game is played with competitive companies
as opponents and the rewards and punishments of the game can be measured in
monetary terms.
In the process of innovation everything is done to permit decision on the basis
of probable costs and profits. In the process, the company convert the language
of invention into the language of investment. Instead of talking about
materials, properties, performances, experiences, experiments, and phenomena,
the company begins to talk of costs, market shares, investment, cash flow, and
returns. The language change accompanies a shift upward in the level of
corporate involvement.
The conversion of uncertainty to risk takes varying forms depending on the kind
of uncertainty in question. Technical innovation involves many different kinds
of uncertainty. Some of these spring directly from the non-rational character
of the process of innovation and invention. Others are only indirectly related
to that process. One will be concerned here with doubt springing from opinion
of technical feasibility, uniqueness and process. One focus of uncertainty is
in the questions: Can it be done? Is it technically feasible?
In the process of invention the requirements to be met change continually in
response to unexpected findings. These may at any time turn a good risk into a
poor one or an indifferent idea into an idea of great promise. We can describe
these changes in terms of a curve of technical difficulty.
As an investigator works he may first encounter the most difficult problem and
later only minor ones whose solution he can attain if he works long enough. One
can plot his progress in time against "difficulty" or
"demands" or "the solution with respect to the state of the
art".
The manager may have to surpass the state of the art at a single point, whereas
his subsequent tasks are well within the state of the art. On the other hand,
there may be a number of separate peaks. In reviewing the development of new
technology we would have to identify separate peaks for the development of the
specific solution and for the development of germane process techniques.
Such curves would not be a source of major uncertainty if it were possible
always to identify ahead of time the problems and their degree of difficulty.
For example, small improvements in the properties of processes may require no
more than the continued application of known methods. On the other hand,
achieving these small improvements may be like approaching absolute zero. The
investigator may be fighting the equivalent of some basic factor or restriction
of the process.
It is not always apparent, even to a skilled investigator, whether he is
working on a minor problem of adjustment or a major problem of principle. He
cannot place himself on the curve of technical difficulty and he may think that
it is further away from the solution that he is in actuality.
Technical feasibility, therefore, often resists the kind of definition required
by the investment game and indeed it may evade definition throughout the entire
process of innovation.
Another focus of uncertainty concerns the question of uniqueness: Who has done
it before? or, Who is doing it now?
Although the patent literature offers a great deal of information about prior
invention, a search may not uncover all relevant techniques. Even a thorough
and concentrated search may not turn up a relevant configuration which had been
invented earlier for quite a different function. Such facts may come to light,
in spite of the best efforts of the researchers, only when the patent
application is processed or later when a counterclaim is filed. If someone
contests a patent, the courts often find against the alleged inventor. The
attitude of the courts toward patents, the skill of the lawyers and the
credibility of the witnesses may count for as much as the apparent uniqueness
of the invention. The uniqueness of an invention is uncertain, both because of
lack of information, in spite of best efforts, and because of the incertitude
of the judicial process.
If a company undertakes a development, it can have no guarantee that its
competitors are not doing similar things. Even if it knows that others are
working in the same field, it cannot be sure how far they have gone. Invention
is like an arms race between warring countries: The leaders ask: Do they
already have it? Are they working on it? How soon will they get it? Can we
afford not to have it? Should we wait until they have it and then copy it? What
do we lose by being second? How much would we gain by being first?
In corporate competition the same questions are relevant. There are the same
difficulties in getting answers, the same temptations to espionage, the same
strategies for playing out a hand in spite of skepticism. A company may be well
advised to continue its development, even with the knowledge that a competitor
is working on the same problem: it may get there first and the other may not
get there at all. There are even cases on record where a company, spurred on by
the belief that a competitor had the product, finished first and achieved a
commercial success - and discovered that its competitor did not have the
product after all.
How will we use the process? How large will its benefit be? How much of a
efficiency will we get? How long will the technical advantage last?
These questions have become the subject matter of a new profession and of what
aspires to be a science. Without attacking the question of whether or not a
corporate science is now possible - whether there are inherent uncertainties
about processes which no amount of information, ahead of time, will resolve -
we can notice that the process of answering questions occurs in time and that,
as in the product of innovation, there are bound to be stretches of uncertainty
which can only be resolved by the expenditure of time and money - if then.
H90 Grid Definition
Success stories suggest that technologies are vehicles for projection: what
they are depends on how one sees them. It is possible to see in them more or
less than their makers intended. In some examples users saw in the techniques
more than the makers had originally perceived. There is no lack of examples in
which they saw less.
The uncertainties of technological planning are particularly apparent in all
the cases. The technical processes of the company, establishing plant and
equipment and making production schedules depends on anticipation of what the
company will want - within the lead times required for the production process.
Even the most skilled practitioners regard the anticipation of trends as an
art, an intuitive skill, which can best be done by the seat of the pants. In
many industries trends remain obscure until the yearly budget, and then, of
course, there is no guarantee that the managements' judgment will be reflected
in actuality.
Technology change, more than any other, is the process in which there is more
information than you can handle. Although you may be able to predict, in
principle, the effects of single-variable changes - these variables never act
alone and there are always many relevant variables, with multiple, interacting
effects.
In theory the firm could identify and test each of the variables possibly
responsible for failure. In this way they might unravel and solve the problem.
But there is not enough time as each day the latent benefits are slipping away
and things have to be done quickly without a clear definition of the problem.
Moreover, testing costs money and the introduction of a technology on a
company-wide scale is a major enterprise. A single discrete test, with
appropriate preparation and follow-up, may cost a great deal of money and its
results may not permit formulation of the overall picture. Although
uncertainties may be resolvable in principle, the cost of their resolution is
high and the very process of resolving them may cost more than can be
justified.
To this we must add the fact, outlined above, that in the process of
development, need and technology do interact. The process originally conceived
for the technology may be ruled out by technical limitations discovered in the
process of invention. A more limited, a broader or a different market may
suggest itself. In short, the product for which a market must be anticipated is
not an "it" that remains constant throughout the process of
development. The technology changes and its possible process changes with it.
2. The Cost of Innovation
Throughout the process of technical innovation decisions about technical
feasibility, uniqueness, and processes, among many other factors, must be made
on insufficient evidence, by individuals faced with an information overload.
The resolution of these uncertainties - the conversion of uncertainty to risk,
which is the corporate work of innovation - takes time and money and requires
justification in its own right. Its benefits must be balanced against its
costs. The process of innovation has a cost curve, as well as a curve of
difficulty, which exhibits characteristic patterns.
Technology development is no more expensive that new product development in
many cases, especially if the company is prepared to take a long term view of
business.
The S-curve for the cost of development takes on meaning when it is put in the
context of the corporate investment game and the conversion of uncertainty to
risk. Despite careful efforts to establish checkpoints beyond which development
will not go without adequate justification, many companies find themselves
having to make investment decisions on insufficient evidence in a general
climate of uncertainty. As they begin to climb the slope of the S they rather
quickly reach what appears to be a point of no return.
Occasionally, after the point of no return, there comes a point where the
mistake - if it is a mistake - is too big to admit. Large scale developments of
the kind undertaken by large companies may proceed for months or years beyond
the point where they should have stopped because of massive commitments to
errors become too frightening to reveal. Every corporate manager has
experienced the difficulties of stopping questionable development projects once
they are under way. They have their own momentum. In these cases the personal
commitment of the people involved in the development, the apparent logic of
investment and the fear of admitting failure. The farther back in the process
of invention one goes, the more overwhelming the rate of failure. In the
absence of clear criteria of success or failure and of adequate statistics, it
is not very useful to attempt a quantitative analysis. It is, at any rate, more
accurate to say "Almost nothing new works", than to say "Most
new developments succeed." It must be added, moreover, that a general
knowledge of the tendency of new techniques and processes to fail is present,
to varying degrees, in the minds of those who undertake their development in
companies.
The adoption of an existing new technology, one which is usually widely
available in the industry and one which is usually purchased from an outside
supplier, represents a vital indication of the future potential and survival of
a company. If the company does not rapidly and effectively embrace new
technologies, systems and processes, then their competitors will - and, within
an increasingly short time, the company will start to lost its competitive
position in the industry.
The technological revolution of the twentieth century has brought with it the
introduction of new process products on a scale undreamed of a few generations
ago. The introduction of new processes, technologies and products is an
uncertain and difficult task - probably the single most precarious function of
the company.
A wealth of theory exists on innovation diffusion, which can be defined as the
spread of new ideas. A convenient starting point is to examine this phenomenon,
also termed "technology transfer," with respect to time - an area in
which there is sufficient empirical data to permit generalizing with some
confidence.
New processes, systems, products and services - in fact a new knowledge and
technology in general - tend to be assimilated slowly at first, then relatively
fast as the majority of eventual adopters acquire them, then slowly again as
the usage approaches saturation, or the ultimate level of a technology's
acceptance. This phenomenon can be expressed mathematically, as a modified
exponential function, or graphically, as an S-shaped curve which shows the
total number of adoptions of a typical new technology or idea as a function of
time. An "adoption" may be defined as the acceptance and continuous
use of a technology or an idea by a single user. Of course, once the item is
adopted, it is always subject to displacement by a superior innovation.
The term "innovation" has a variety of definitions. From a marketing
viewpoint, it is appropriate to define an innovation as any new technology,
system or software having a property not previously associated with that
particular process. Less substantive changes may or may not qualify as
innovations, depending on how narrowly the term is defined. When either an
established technology or a new variation is introduced into a new or different
process, its diffusion in that process will frequently follow the pattern of a
true innovation.
Although the S-curve is typical of what happens when a new technology is put
into an industry, the curve may or may not reach the saturation level. If the
curve represents a particular industry's usage, it may closely approach
saturation but will probably never reach it. This is because there are usually
some potential users - people who could afford and could justify the use of the
innovation - who simply will not accept the new development.
Not surprisingly, those who are usually first to utilize a new technology tend
to have certain traits in common, as do those who follow and those who are the
last to accept - or never accept - the new process. In fact, the behavioral
scientists argue that there are specific psychological and sociological traits
that identify early, middle, and late adopters. Technology adopters can be
grouped into five groups, with distinct properties assigned to each.
These classes, and the percentages of the population they represent, are:
1) prime innovators
2) primary adopters
3) secondary adopters
4) tertiary adopters
5) inert adopters
Like many human phenomena, innovation adoption appears to follow a normal
distribution curve (which explains the S-form of the cumulative adoption
curve).
The rate of adoption, which is the first derivative of the adoption function,
increases at an increasing rate until the first inflection point; it continues
to increase after that point, but at a decreasing rate, until the curve reaches
its peak. There the adoption curve - that is, the rate of sales - begins to
decline at an increasing rate until the second inflection point, after which
the rate of decline decreases. The rate of change of the adoption rate (which
is the rate of change of the S-curve) is simply the derivative of the adoption
function. Differential calculus, by permitting us to compute the derivatives of
the basic adoption function, allows us to specify the rate of adoption at
different times in the product's life cycle. - The implications of this are
important for process decisions, as one can use the adoption function simply as
a basis for categorizing adopters. These adopters are identified by common corporate
psychology traits that can be generalized to both individuals and firms.
Prime Adopters
are the initial adopters - those venturesome companies who understand the
nature of risk and have computed the probabilities - usually well before any of
their competitors have even addressed the problems. As a class, they tend to be
vigorous companies, of a high corporate status, successful, involved in high
growth markets, and willing to take risks. The prime adopters rely
extensively on impersonal and scientific information sources and compete with
other prime adopters. They are usually multi-national and are often
industry leaders. They tend to have contact with universities and research
centers and are usually the larger and more specialized firms. The management
of prime adopters are generally open and gregarious and participate
actively in formal and informal groups. They attend trade shows, seminars, and
conventions and have considerable social contact both in and outside of their
professional circles. Of particular importance is the fact that they are an
important medium of communication. They communicate among themselves as well as
with the primary-adopter group. Thus they are the logical target for the
promotional efforts associated with the introduction of a new technology.
Primary adopters
are similar to the prime adopters, but they are more cautious. They
usually enjoy a high corporate status and are respected as the industry leaders
within a sectional group. Like the prime adopters, their management are
well educated and more creative than people in other adopter categories. They
are widely involved in both the activities of their professional community and
extracurricular activities. As a result of their conservativeness - relative to
the Prime adopters - they are the most trusted opinion-makers. They are
the group to whom the other adopters look for guidance. Primary adopters-
management appear to have considerable mobility. They move between
institutions, jobs, economic levels and geographical areas rather than members
of other categories. They read and travel more and are more likely to be
influenced by intellectual sources, such as technical journals or
special-interest magazines. Members of this group also appear to have the
greatest amount of contact with corporate sources, to be open to new
experiences, and to have a wide variety of interests. They serve as a standard
for the other adopters and are an index of the ultimate success of a
technology. An awareness of both these properties is obviously important to the
firm in the implementation of new technologies.
The Secondary adopters
is the most deliberative group. Its members observe the experience of the
primary adopters, waiting until a substantial number have accepted the
innovation before they acquire it themselves. Their management are generally
above-average in industry terms, and have considerable contact with both
information sources and primary adopters. In the commercial terms, the secondary
adopters seem to consist largely of average-sized firms.
The Tertiary adopters
are below average in nearly all characteristics such as corporate status
and profitability. They display little leadership and require a good deal of
peer pressure before they will try a new technology. They associate their
status mainly with other companies in the same class. Businesses in this class
are usually small, relatively unspecialized, and oriented toward the
maintenance of the status quo. Members of the tertiary adopters are
skeptical and generally reject a change until its virtues are proven by the
majority of other firms.
The Inert adopters
are generally tradition-bound and industrially isolated. They tend to
belong to only one or two industry sectors and are usually at the bottom of the
profitability and income ladders. They are frightened of change, perceive
mainly a bleak future and accept an innovation only after it has become so
widely accepted as to traditional. By then the innovation is often obsolete and
is being replaced with newer developments by the other groups.
The form of communication network varies with both the adopter category and the
stage of acceptance. The process by which new technologies are accepted may be
divided into five stages:
1) awareness
2) interest
3) evaluation
4) testing
5) adoption
The first four are self-explanatory. The adoption stage begins when the firm
elects to implement the new technology.
The perceptions and attitudes of a company's management will impact on their
acceptance of new technologies. The thought process involved is exactly the
same as that for a buyer of any product or service and yet the end results are
significantly more important in that a wrong decision can mean the end of the
company.
The adoption of new methods tend to be the personal decisions of the senior
management cadre and, as such, display and reflect the tendencies analyzed by
the industrial psychologist.
Selective Exposure
is the tendency of individuals to see or hear only that material which
conforms to their present beliefs and attitudes. This is similar to the
cognitive dissonance phenomenon. The barrier is particularly effective when
pressure is applied from levels below the recipient in the corporate hierarchy.
Selective Perception
is the tendency to interpret new information within the framework of
attitudes established by past experience. Thus if a manager has had a bad
experience in the past of a particular method or process he will discount it,
or reject it, even if the process has improved or changed in the intervening
period.
Selective Retention
is the tendency to retain only that information which reinforces present
beliefs and attitudes. Selective retention is also associated with cognitive
dissonance, where a manager tends to remember those things that justify his
selection and ignore those that contradict it.
Person-to-person contact between technology seller and process buyer is
generally more effective than exposure to mass media, since people are not as
easily ignored or put aside as magazines, commercials, or direct mail. In
addition, a dialogue is possible with personal contact; hence misconceptions
can be exposed and corrected. Information can be presented in a way that
conforms to the individual's attitudes. Personal communication also usually
leaves a stronger impression than mass-media messages, thus increasing the
probability of retention. Such contact can be critical during the evaluation
stage, especially for the later categories of adopters, who are poor
risk-takers and rely on others for guidance and reinforcement of their
judgment. Thus the tendency of company managers to be receptive to personal
contact by technology sellers is a vital part of the chain of events which will
lead to the company purchasing a new process.
The communication aspects of diffusion theory have important implications for
adoption. They are especially relevant to the implementation programme as the
distribution of resources between the various components of the process should
be different at different times in the technology's life cycle. For example,
the receptiveness of innovators to impersonal sources indicates that
advertising in special-interest media will be most effective in the early
introductory phase of a technology. Since the majority of prospective
technology buyers will wait to observe the experience of the prime and primary
adopters, most technology sellers will delay the general advertising of their
technologies until it has been accepted by the prime adopters and most of the
primary adopters.
As the technical innovation is diffused in the primary adopter categories,
technology sellers will shift from specialized media to general media. It is
thus useful for company managers who wish to ensure that they are at all times au
fait with the latest technological improvements to carefully select the
input channels for new or impending technologies. All too often one sees
corporate shortsightedness and penny pinching when it comes to the acquisition
of technical information.
Innovation diffusion is illustrative of the complexity of human behavior in
industry. The company must often deal with it and the other phenomena connected
with the implementation of new technology as a whole. Furthermore the
construction of a model of corporate behavior which shows the hurdles and
obstacles in the path of new technology innovation makes this task a bit more
manageable.
H91 Grid Definition
New Technology simply means a better and more efficient way of performing one
or more of the many elements which are aggregated to produce and distribute the
products and services offered by the industry.
The technology instrument has many dimensions. These can be catalogued under
several broad headings: physical process properties, process and systems
development, product quality, package, product differentiation, and
distribution to the markets. The effect of a change in the technology variable
can often be measured, hence specified in relation to product quality, customer
servicing and sales, by marketing research including quantitative analyses of
consumer response. However, technology initiatives are dependent on the
imagination and creativity - the "inventiveness" - of people. This is
not a controllable process, although management can stimulate and exploit
inventions in many ways.
From the company viewpoint, a technology is what it is perceived to be in the
minds of the corporate entity and ultimately by the distribution channels and
customer base. Thus "new" technologies can be created by manipulating
any dimension of the technology variable, although many of these manipulations
may be so trivial as not really to warrant calling the technology
"new".
New technologies can be given some protection from infringement by competitors
through the use of patents and copyrights. These devices seldom assure a
monopoly, although they usually exclude exact copies in the industry.
Technology mix and technology line are important variables. An alteration in
either mix or line can have significant implications for each of the basic
technology components. For instance, the addition of a new technology or better
quality technology or cheaper technology can displace a portion of the process
industry for an established item, or it may complement, hence reinforce, the
original product line. Expansion of a product line may be necessary to satisfy
distributors or exclude competitors. A change in technology mix may be needed
to more evenly use the capacity of plant and equipment as well as to better
utilize the process or distribution elements. Excessive costs may call for the
elimination of a technology and replacement with another.
New technology development - although largely dependent on inventiveness - can
be encouraged and exploited. Management can identify and communicate with new
technology sources, actively involve itself in the search for and evaluation of
initiatives, establish criteria for the selection of new technologies, engage
in test processes, and be willing to experiment and to assume risk. Confronted
by the ongoing technological revolution of the twentieth century, no industry
can afford to remain static. The continual analysis and manipulation of the
technology variable is usually essential to the exploitation or accommodation of
change.
The creation of new technologies - including substantial modifications of
existing technologies - is a prerequisite to survival in many industries. All
processes and systems begin their journey toward obsolescence as soon as they
are introduced and in fact, their replacements are being designed as they go on
the market.
Sometimes the evolution of a technology consists primarily of software or
systems changes; at other times it reflects the continuous stream of new technology,
as in the case of high technology products which require process technologies
at the forefront. Often a combination of both systems and technological
inventions is involved. In the infrequent and often most exciting cases, a
totally new technology is invented, resulting in the emergence of a new
industry and the development of a previously unexploited market.
Technology changes can also be important for non-manufacturing firms.
Innovation, or the lack of invention, has meant success or failure to countless
service firms. Retail distribution, banking, medical care, and maintenance
companies - to name only a few examples - have all been drastically changed by
the introduction of technological inventions in the past few decades.
No institution or individual has a monopoly on new technology initiatives and
there are many examples of initiatives emanating from very many different
sources, workers, management, customers, distributors, backyard inventors and
industrial laboratories: all have contributed new technology initiatives.
Serendipity - the happy faculty of discovering by accident something worthwhile
- also plays a role in the creation of new technologies. Some technologies are
developed or invented by accident while the innovator was involved in, or
using, or doing research on other technologies. Some companies file patent
claims on all discoveries to ensure exclusive rights if the item later proves
to have potential.
A survey of major companies and several research institutes engaged in the
study of technology diffusion reveals that inventions used by the firm
generally come from sources closely associated within the company. The most
frequent originators of untried initiatives are employees.
Other prolific sources are customers, salesmen, and technical personnel sent by
suppliers to aid in machinery installation or material use. New technology
initiatives that result from contacts, press coverage, and patent agents are
seldom assimilated. Surprisingly, the private inventor is also a poor source
and usually receives rather cool treatment when he approaches large
corporations.
The indifference to private inventors is not simply attributable to
shortsightedness on the part of management or the inertia associated with
bigness. Those firms that have maintained an open-door policy toward the
independent inventor have had little to show for it; yet some firms have
acquired several useful technology initiatives from this source. Many companies
have reported a history of petty lawsuits and humorous experiences with
crackpot inventors.
Those associated with a large organization have a terrific advantage over
outsiders in the competition for the acceptance of inventions. An employee or a
supplier will have access to the channels of communication and be knowledgeable
about the capabilities, limitations, and needs of the firm. His understanding
of the company's process and marketing capabilities and his access to the
decision-makers can prove invaluable in gaining acceptance of a new idea.
It is essential to realize that the majority of profitable new technology
inventions are not the result of the introduction of high technology and high
cost solutions - but the results of an accumulation of a steady flow of small
changes in the process of the supply and distribution of the product.
Competitive Technology Adoption |
H92 Grid Definition
A new technology programme cannot be intelligently managed without a statement of
objectives and the concurrence of senior managers on the criteria for
technology selection. Although judgment will necessarily play a large role in
the new technology decision process, goals and standards must be defined or the
programme will be useless.
New technology goals will vary with the firm's size, capital, current
technology, growth phase, and management philosophy, as well as with the
characteristics of the industry in which the firm competes, and should be
determined within that context.
Some of the more common objectives of new technology programmes are:
1) growth
2) the replacement
of obsolete technologies
3) diversification
4) improved
utilization of processes and distribution
5) the improvement
of the competitive situation
6) improved profits
The last is a long-run objective that should be common to all programmes.
A list of selection criteria should contain the elements to be included in the
decision model, the bases for their measurement, their limit values, and their
relative weights. For example, profitability should be one criterion. It can be
measured in absolute monetary value, in values discounted to their present
value, or in terms of the return on investment. Limit values (such as a minimum
profit or a minimum return on investment) should be selected to eliminate
alternatives with inadequate earning potential. Since criteria will vary in
importance, weights may be assigned in order to aggregate the criteria.
Management's list of objectives and selection criteria should include a
statement of the company's attitude toward methods of exploiting inventions. A
broad policy statement is important, for each new technology initiative has
unique properties, and no technology development, process, or distribution alternative
should be rejected out of hand. However, management too will have a unique body
of experience, and unique capabilities and prejudices, which should be
reflected in the choices made between the internal development of new
technologies, joint ventures, and other methods of implementation. Both
preferences and objectives should be taken into account and the choice of
procedures is important because it establishes the form of reference for both
the screening and evaluation phases of new technology analysis.
Having acquired a new technology initiative, management must next address
itself to possible methods of exploitation.
The options are:
1) internal
development
2) joint venture
3) licensing
4) purchase
5) a combination of these alternatives
Each option has its own profit-risk values, with the profit potential usually
increasing as risk increases.
Internal development offers the greatest rewards and carries the heaviest
burden of risk. It is the most exciting and usually the most complex of the
alternatives, involving as it does the acquisition, screening, evaluation,
development (which includes design completing, prototype and testing, and
processes), testing and implementation of the technology.
The joint venture enables the firm to share the risk of undertaking a new
technology, but at the cost of sharing the rewards. It is appropriate when the
firm lacks adequate capital, sufficient process capabilities, or the technical
knowledge needed to develop the technology, and a partner is available with the
requisite input. Joint ventures are common in large-scale initiatives. A joint
venture may mean a sharing of development, process and distribution
responsibilities; it may involve the establishment of a jointly operated
facility; or it may mean the incorporation of a jointly owned subsidiary. A
variation, or adoption, of the joint-venture method is the acquisition of an
established company that has the capability the firm lacks for a new technology's
development, process development and eventual implementation. This frequently
results in further vertical integration, as is the case when distributors are
acquired to ensure a distribution channel for the new technology, or suppliers
are acquired to provide necessary systems, supplies or material inputs.
Licensing involves the leasing of patentable technology to other firms. It is
normally confined to processes that have already been tested or technologies
that have been accepted in the marketplace. Licensing is a low-cost device for
the further exploitation of demand supply as it can increase competitiveness in
the firm's own industry, licenses are often granted to avoid claims of
restraint of trade and subsequent government intervention.
The purchase of new technology has a relatively good record and indeed the
majority of technology change is the result of purchases of systems or
software.
A combination of alternatives is sometimes the most practical route to the
solution of problems. A firm may develop a technology through a prototype stage
and then sell or license its design to another company. Foreign markets are
often exploited this way. Also, a firm may internally develop an invention and
maintain exclusive rights in the domestic market, but license it to a foreign
company.
TECHNOLOGY INITIATIVES |
|
Internal Development |
|
Licensing |
|
H93 Grid Definition
A firm's statement of objectives and criteria serves as the basis of a
screening model against which the company can test or make a preliminary
evaluation of new technology initiatives. Ideally, the model should be
developed and applied by staff of the technical, process and distribution
departments and whatever staff groups (such as software designers) are
appropriate. It should include each selection criterion and their relevant
weights, scales of measurement and limit values.
Although contribution to total profit is the ultimate criterion for undertaking
development of a new technology, other considerations should also be included
in the preliminary evaluation. These considerations, called resource
utilization factors, pertain to the compatibility
between the new technology and the present technical, process and distribution
resources of the firm. Most of these factors cannot be evaluated on a monetary
scale. In fact, their measurements, although usually quantitative, are not
comparable.
In order to aggregate the separate factors into a single value that will point
to the selection or rejection of an invention or method of exploitation, one
must convert them to a utility-value scale.
This can be done by assigning utility-value points to each of the following
judgments: excellent, good, satisfactory, poor, and very poor. The relative
importance of each factor is indicated by the weights assigned. A factor's
rating value is multiplied by its weight to yield its utility value.
An application of the model to a hypothetical invention would show that the
purpose of the model is to identify and discriminate between:
1) |
New technology initiatives that are so obviously superior as to warrant immediate commitment to the process |
2) |
New technology initiatives that are sufficiently good to warrant an immediate prototype and testing |
3) |
New technology initiatives that warrant additional analysis |
4) |
New technology initiatives that should be rejected without further expenditure of company resources |
Thus the model serves as a filter, whose
coarseness is a function of the degree of depth and precision of the analysis.
Obviously, such a model can also help in deciding the appropriate method of exploitation.
For instance, if a new initiative had screening ratings of
"excellent" in every category except distribution, then a joint
venture with a distributor might be indicated as the best exploitation
technique.
In order to provide consistency in the screening of new technology initiatives,
the rating system used for resource evaluation must remain constant for the
evaluation of all new technology initiatives. Otherwise the ratings will not
provide a legitimate ranking of alternatives. The determinants of the screening
model are normally selected subsequent to management's preparation of a policy
statement on new technology goals and objectives.
The applications of the screening model are easily illustrated. For example, a
technology requiring 15 percent more professional people to be added to the
technical staff would cause the "professional personnel" factor to be
rated "satisfactory" and awarded 30 points. The scarcity and cost of
technicians and engineers make this an important factor with a weight of 3.
Thus, the total utility value assigned to this factor would be 90.
Like most corporate decisions, new technology judgments are subject to error.
Decision models that takes this into account is more useful than one that does
not. If the latent uncertainty of the problem is recognized, probabilities can
be estimated and assigned to each probable outcome.
Multiplying the probability times the utility value (which is the product of
the rating value and the weight) gives us the expected value of the outcome.
Summing the unexpected values of each outcome then yields the factor's total
expected utility value. Thus, for the "professional personnel"
factor, the expected values for the five outcomes (Excellent, Good,
Satisfactory, Poor, Very Poor) are given respectively. (Expected value, as
explained earlier, is the product of an outcome's value times its probability).
Adding these yields a total expected utility value of X for that factor.
A simpler method is to multiply the rating values (50, 40, 30, 20, and 10)
by their probabilities, add their products, and multiply the total by the
factor's weight. The answer will be the same. If the probabilities are equally
distributed about the most likely rating, then the total expected utility value
may be computed simply by multiplying that rating value by the factor's weight.
In the rating a factor is assigned and is determined by reference to an
appropriate criterion - preferably one that can be expressed quantitatively,
although a qualitative criterion may be necessary. The probability distribution
used for a given factor can be based on appropriate historical data (rarely
available for new technologies) or estimated intuitively. Probability estimates
are best made by managers or specialists who have some expertise in an area
relevant to the factor. Often, several estimates for a factor are made and the
analyst must decide which is the best, or take an average. These estimates are
known as "prior probabilities." Later, when programme data becomes available,
they could be modified to "posterior" probabilities by invoking
statistical theorems and formulas. These posterior probabilities can then be
used in evaluating similar new technology possibilities.
The factors and weights used in screening programmes will vary considerably
between industries and firms. For example, a distributor would have no interest
in an invention's technical and process costs (unless it involved a capital
alteration to his own operation) but would be vitally concerned with product supply
requirements, customer compatibility, financial characteristics, reorder speed,
space requirements and brand image.
A new technology screening model can reliably identify technology initiatives
that are so meritorious as to warrant an immediate - and possibly substantial -
commitment of company resources, provided it is based on a moderately thorough
analysis. Sometimes a hierarchy of models is more economical: a primary
screening model to reject the obvious misfits; a secondary model to screen the
survivors, narrowing the number to a more manageable quantity and selecting
those few promising initiatives that justify expensive, detailed analyses; and
a final model to evaluate the remaining initiatives and provide the basis for
the final decision.
A model of any kind is no substitute for executive judgment. On the contrary,
it is to a great extent a codification of judgment, particularly in regard to
the weighting of factors and the statement of rating criteria. Thus,
constructing a decision model without the approval of the same people who will
decide whether the invention actually will be allocated company resources and
ultimately join the technology mix, is a waste of resources.
The virtue of a decision model is that it organizes the decision process and
provides a standard for judgment. It is not a substitute for imagination or
insight - it is an environment that encourages both exploration and the
questioning of present technologies and practices.
TECHNOLOGY SCREENING |
|
H94 Grid Definition
The technology impact can be tested by using the new technology on a test
process. The results are then measured and abstracted to the total potential
process. In addition, corporate reaction is evaluated and technology
performance is observed. This gives empirical data on the basis of which one
can revise the process, potential cost savings or extra profit, and cost
estimates and make needed changes in both the technology and the process plan.
If the results of the evaluation are dire, one has an chance to discontinue the
technology before even greater losses are sustained. The results of the pilot
and the results of the financial impact may assure the truth of a profitable
outcome.
Often, testing is carried out solely to aid the company in the analysis and
manipulation of the technology variable, with no attempt being made to estimate
the supply function.
Testing by independent agencies is useful in analyzing the technology variable,
as an alternative to testing in-house. Although this kind of testing is of
little value in specifying the process function, it does have the benefit of
security, in that competitors are far less likely to become aware of the
company's plans if the invention can be kept completely off the site until its
formal acceptance.
Tests made by commercial agencies are similar to those that would be made by
the firm's own engineering department during prototype testing or by its
quality-control department during the process phase. The technology's operation
(how well it performs its functions), durability, and reliability are evaluated
and compared with that of similar technologies. By having an outside group do
this, however, the company will hopefully get an objective, detached and fresh
view of the technology.
The decision to test a technology outside the firm is essentially a safeguard
to hedge against the prospect of bad judgment in the selection, design, and
usage of a new technology. Hopefully it will prevent any major mistakes in
these areas, and may also identify any more subtle problems that may exist.
There is often an economic advantage resulting from the efficiencies of
specialization. In fact, the use of an outside testing may be required due to a
lack of equipment or skills within the firm.
The final decision to reject or accept a process test plan should on the basis
of a marginal analysis of costs and risk.
Four values are necessary:
(1) the cost of the test
(2) the cost of failure of the technology after it is adopted
(3) the probability of failure without testing
(4) the probability of failure with testing, assuming the test is
"positive"
The difference in the expected values of failures with and without testing is
the maximum amount that should be spent on testing and can be viewed as the
expected savings that would result from testing.
Even technologies that the firm commits to as a result of the preliminary
screening must be further evaluated to determine more precisely the extent of
their adoption and to estimate their profit contribution. This is necessary in
order to determine how large the initial commitment should be and to prepare
the implementation programmes. Often, inventions that survive the initial
screening process must subsequently be analyzed in depth to provide a basis for
their final acceptance or rejection.
Acceptance may mean the commitment of extensive resources to implementation.
This would necessarily be the case with a process, or any other factor or
element that is not divisible, hence does not lend itself to trial on a small
scale. Acceptance may also mean a limited commitment of resources, to produce
only a prototype, or a pilot production line that would provide units for
testing in the market. In some industries, mainly those involved in high technology
or high cost products, management acceptance will mean the expenditure of major
resources for studies, designs and distribution, but the process will not be
initiated until a minimum level of profitability has been determined and
guaranteed.
Ideally, the acceptance/rejection decision - often called the "go/no-go
decision" in computer and engineering parlance - should focus on the
expected value of the discounted present value of profit. However, the resource
utilization factors cited in the screening model should not be ignored in
making the final decision. For firms with idle capacity and high fixed costs,
they will probably be crucial. If necessary, these factors can be integrated
into the final decision, just as they were in the screening process, by
converting profit into a utility value.
In view of the uncertainty associated with new ventures, the final evaluation
of a new technology proposal should include a precise statement of the
break-even point. By this time the project fixed or capital cost should be set
(hence the pricing function can be precisely stated) and variable costs should
have been accurately estimated, at least for the early part of the technology's
life cycle. Since this will probably include the break-even output, the break-even
point can easily be counted with a high degree of precision. Multiplying the
break-even quantity by the price, yields the break-even revenue; as revenue
equals cost at the break-even point; the break-even cost is automatically
revealed.
The implementation of a new technology - especially one representing a radical
invention or the entry of a new process into a particular operation - requires
skillful manipulation of the supply factors. Supply availability, in turn, must
be supported with an adequate distribution system and a production release that
will satisfy demand. Risk is obviously involved.
In preparing the supply strategy and setting the initial quantity of output,
certain technology qualities must be taken into account.
Protectability is very important. The
ability of the firm to protect its technology from infringement - through a
patent or unique technical or process know how - will determine the duration of
the producer's monopoly. In short, the firm must move into the market quickly,
be able to satisfy demand readily, and exploit its invention before the
competition can offer a good process substitute.
Another relevant factor is the new technology's cost elasticity and the ease
and rapidity with which it can be copied. The demand for a particular
technology tends to become more elastic (that is, more sensitive to changes in
costs) the longer it is in operation. The reason is that, normally, competitors
can develop substitutes, given enough time to work on the problem. They do this
through technology invention, the breaking or expiration of patents, or the
redesigning of a technology to avoid direct patent infringement. It is
difficult to name a technology that has been on the market more than a couple of
years for which there is no suitable substitute.
The prevalent relationship between short-run and long-run demand suggests
several initiatives for the implementation of a new technology. First, patent
protection is helpful in maintaining the initial cost inelasticity over a
longer period of time. Second, in lieu of a barrier to entry, secrecy is
important in order to delay the start of competitors' reactions, at least until
the invention is on-stream (this is one argument against pre-testing). The firm
should prepare to exploit quickly its initial success if the new technology is
well received and quickly in place. Implementing this last rule-of-thumb can be
very risky, for the supplier and distribution state-of-readiness it implies may
require a heavy capital investment in plant, equipment, inventory, and process
capability. A compromise may be to have long-lead-time items, such as special
tooling, and alternative sources of supply ready to go at the item of market
entry. Finally, the firm may be able to immediately adjust supply to demand by
increasing price until output can be increased (step pricing). However, this
method has several disadvantages, and may well speed the entry of competitors
into the market.
TECHNOLOGY IMPACT |
|
H95
H96
TECHNOLOGY IMPLEMENTATION |
|
H97 Grid Definition
F_H - FIN_HIST.HTM HISTORIC FINANCIAL DATA
NEW TECHNOLOGY SCENARIOS BALANCE SHEET FORECASTS
The NEW TECHNOLOGY FINANCIAL SCENARIOS BALANCE SHEET FORECASTS section gives a
series of Balance Sheet Forecasts for the industry using a number of
assumptions relating to the corporate decisions available to the management of
the industry.
The Balance sheet forecast given shows the effects of financial improvements
which Management is likely to recommend:
NEW TECHNOLOGY FINANCIAL SCENARIOS
- Base Forecast : Median Market Scenario
- New Product Development
- New Technology Investment
- Customer / Order Processing Systems Investment
- Systems Investment
- Materials & Energy Cost Scenarios
- Plant & Equipment Cost Scenarios
- New Product & New Technology Cost Scenarios
- Profit Impact From Process Cost Reduction
- Capital Investments: Process Plant & Equipment
Managers in the industry will, in both the short-term and the long-term, have
vital decisions to make regarding the financial improvements, margins and
profitability and these decisions will need to be evaluated in light of the
customers, markets, competitors, products, industry and internal factors. The
scenarios given isolate a number of the most important factors and provide
balance sheet forecasts for each of the scenarios.
The data provides a short and medium term forecast covering the next 6 years
for each of the Forecast Financial and Operational items. The Financial and
Operational Data sections show each of the items listed below in terms of
forecast data and covers a period of the next 6 years.
F0M| MEDIAN FORECAST : Financials
G0M| MEDIAN FORECAST : Margins & Ratios
F02| NEW PRODUCT DEVELOPMENT : Financials
G02| NEW PRODUCT DEVELOPMENT : Margins & Ratios
F05| NEW TECHNOLOGY INVESTMENT : Financials
G05| NEW TECHNOLOGY INVESTMENT : Margins & Ratios
F45| CUSTOMER / ORDER PROCESSING SYSTEMS INVESTMENT : Financials
G45| CUSTOMER / ORDER PROCESSING SYSTEMS INVESTMENT : Margins & Ratios
F46| SYSTEMS INVESTMENT : Financials
G46| SYSTEMS INVESTMENT : Margins & Ratios
F49| MATERIALS & ENERGY COST SCENARIOS : Financials
G49| MATERIALS & ENERGY COST SCENARIOS : Margins & Ratios
F53| PLANT & EQUIPMENT COST SCENARIOS : Financials
G53| PLANT & EQUIPMENT COST SCENARIOS : Margins & Ratios
F55| NEW PRODUCT & NEW TECHNOLOGY COST SCENARIOS : Financials
G55| NEW PRODUCT & NEW TECHNOLOGY COST SCENARIOS : Margins & Ratios
F63| PROFIT IMPACT FROM PROCESS COST REDUCTION : Financials
G63| PROFIT IMPACT FROM PROCESS COST REDUCTION : Margins & Ratios
F66| CAPITAL INVESTMENTS OPTIONS: PROCESS PLANT & EQUIPMENT : Financials
G66| CAPITAL INVESTMENTS OPTIONS: PROCESS PLANT & EQUIPMENT : Margins & Ratios
FIN_DEFI.HTM Financial Definitions
Ad Hoc, 23
Ad Hoc Screening, 29
Ad Hoc Technology Innovation, 11
Adoption, 9
Awareness, 9
Balance Sheet Base Forecast : Median Market Scenario, 54
Balance Sheet Capital Investments Options: Process, 90
Balance Sheet Customer / Order Processing Systems, 66
Balance Sheet Historic, 48
Balance Sheet Materials & Energy Cost Scenarios, 74
Balance Sheet New Product Development, 58
Balance Sheet New Product & New Technology Cost, 82
Balance Sheet New Technology Investment, 62
Balance Sheet Plant & Equipment Cost Scenarios, 78
Balance Sheet Profit Impact From Process Cost Reduction, 86
Balance Sheet Systems Investment, 70
Competitive Technology Adoption, 17
Cost of Innovation, 7
Costs Funded from Cash-Flow, 39
Costs Funded from Equity, 39
Costs Funded from Loans, 39
Costs Funded from Profits, 39
Costs Funded from Reserves, 39
Costs & Margins Historic, 49
Diversification, 21
Evaluation, 9
Feasibility, 3
Financial data definitions, 95
Financial forecast notes, 52
Financial Ratios Base Forecast : Median Market, 56
Financial Ratios Capital Investments: Processes, 92
Financial Ratios Customer / Order Processing Systems, 68
Financial Ratios Materials & Energy Cost Scenarios, 76
Financial Ratios New Product Development, 60
Financial Ratios New Product & New Technology Cost, 84
Financial Ratios New Technology Investment, 64
Financial Ratios Plant & Equipment Cost Scenarios, 80
Financial Ratios Profit Impact from Process Costs, 88
Financial Ratios Systems Investment, 72
Financial Ratios & Margins Historic, 50
Fixed Technology Spend, 11
Formal Technology Targets, 29
Future Development, 3
Growth, 21
HISTORIC FINANCIAL DATA, 47
Improved profits, 21
Improved utilization of processes and distribution, 21
Improvement of the competitive situation, 21
Inert adopters, 8, 9
Informal Technology Targets, 29
Interest, 9
Internal development, 22, 23
Joint venture, 22
Joint Ventures, 23
Licensing, 22, 23
MANAGEMENT DECISIONS, 21
Middle Management Responsibility, 29
NEW TECHNOLOGY, 1
NEW TECHNOLOGY ADOPTION, 11
New Technology Durability, 35
New Technology Evolution, 17
NEW TECHNOLOGY FINANCIAL SCENARIOS FORECASTS, 53
NEW TECHNOLOGY FUNDING, 39
New Technology Longevity, 35
New Technology Operation Criteria, 35
New Technology Performance, 35
New Technology Reliability, 35
NEW TECHNOLOGY RISK, 3
No Technology Goals, 11
Obsolete Technology Replacement, 17
Operational Costs Base Forecast : Median Market, 55
Operational Costs Capital Investments: Processes, 91
Operational Costs Customer / Order Processing Systems, 67
Operational Costs Materials & Energy Cost Scenario, 75
Operational Costs New Product Development, 59
Operational Costs New Product & New Technology Costs, 83
Operational Costs New Technology Investment, 63
Operational Costs Plant & Equipment Cost Scenarios, 79
Operational Costs Profit Impact From Process Cost, 87
Operational Costs Systems Investment, 71
Operational Margins Base Forecast : Median Market, 57
Operational Margins Capital Investments: Processes, 93
Operational Margins Customer / Order Processing Systems, 69
Operational Margins Materials & Energy Cost Scenario, 77
Operational Margins New Product Development, 61
Operational Margins New Product & New Technology Cost, 85
Operational Margins New Technology Investment, 65
Operational Margins Plant & Equipment Cost Scenario, 81
Operational Margins Profit Impact From Process Costs, 89
Operational Margins Systems Investment, 73
Operational Ratios & Margins Historic, 51
Pay-back Certainty, 3
Primary adopters, 8, 9
Prime Adopters, 9
Prime innovators, 8
Process Efficiency, 3
PRODUCT TECHNOLOGY, 15
Purchase, 23
Replacement of obsolete technologies, 21
Resource utilization factors, 27
Secondary adopters, 8, 9
Selective Exposure, 9
Selective Perception, 10
Selective Retention, 10
Senior Management Responsibility, 29
Technology Cost Elasticity, 43
TECHNOLOGY COSTING, 33
TECHNOLOGY DECISIONS, 17
TECHNOLOGY DEVELOPMENT, 16
TECHNOLOGY DIFFUSION, 8
Technology Diversification, 17
Technology Duration, 43
Technology Evaluation Goals, 11
TECHNOLOGY EVOLUTION, 15
TECHNOLOGY IMPACT, 33, 35
TECHNOLOGY IMPLEMENTATION, 34, 43
TECHNOLOGY INITIATIVES, 22, 23
TECHNOLOGY INNOVATION, 1
Technology Innovation Goals, 11
Technology Lead-Times, 43
TECHNOLOGY SCREENING, 27, 29
Technology Security, 43
Technology Supply Factors, 43
Technology Utilization, 17
Tertiary adopters, 8, 9
Testing, 9
Uncertainty of Technological Innovation, 1
Uniqueness, 3
Utility-value scale, 27
Ad
Hoc Screening
Ad Hoc Technology Innovation
Ad Hoc
adoption
awareness
Base Forecast : Median Market Scenario
Capital Investments Options: Process Plant & Equipment
Competitive Technology Adoption
Cost
of Innovation
Costs Funded from Cash-Flow
Costs Funded from Equity
Costs Funded from Loans
Costs Funded from Profits
Costs Funded from Reserves
Customer / Order Processing Systems Investment
diversification
evaluation
Feasibility
Fixed Technology Spend
Formal Technology Targets
Future
Development
growth
HISTORIC FINANCIAL DATA
improved
profits
improved utilization of processes and distribution
improvement of the competitive situation
Inert
adopters
inert
adopters
Informal Technology Targets
interest
Internal
Development
internal
development
joint
venture
Joint
Ventures
Licensing
licensing
MANAGEMENT
DECISIONS
Materials & Energy Cost Scenarios
Middle Management Responsibility
New Product & New Technology Cost Scenarios
New Product Development
NEW TECHNOLOGY ADOPTION
New Technology Durability
New Technology Evolution
NEW TECHNOLOGY FINANCIAL SCENARIOS FORECASTS
NEW TECHNOLOGY FUNDING
New Technology Investment
New Technology Longevity
New Technology Operation Criteria
New Technology Performance
New Technology Reliability
NEW
TECHNOLOGY RISK
NEW
TECHNOLOGY
No
Technology Goals
Obsolete Technology Replacement
Pay-back
Certainty
Plant & Equipment Cost Scenarios
Primary
adopters
primary
adopters
Prime
Adopters
prime
innovators
Process
Efficiency
PRODUCT
TECHNOLOGY
Profit Impact From Process Cost Reduction
Purchase
replacement of obsolete technologies
resource utilization factors
Secondary
adopters
secondary
adopters
Selective
Exposure
Selective
Perception
Selective
Retention
Senior Management Responsibility
Systems
Investment
Technology Cost Elasticity
TECHNOLOGY
COSTING
TECHNOLOGY
DECISIONS
TECHNOLOGY DEVELOPMENT
TECHNOLOGY
DIFFUSION
Technology Diversification
Technology
Duration
Technology Evaluation Goals
TECHNOLOGY
EVOLUTION
TECHNOLOGY
IMPACT
TECHNOLOGY
IMPACT
TECHNOLOGY IMPLEMENTATION
TECHNOLOGY IMPLEMENTATION
TECHNOLOGY INITIATIVES
TECHNOLOGY INITIATIVES
Technology Innovation Goals
TECHNOLOGY INNOVATION
Technology Lead-Times
TECHNOLOGY
SCREENING
TECHNOLOGY
SCREENING
Technology
Security
Technology Supply Factors
Technology Utilization
Tertiary
adopters
tertiary
adopters
testing
Uncertainty of Technological Innovation
Uniqueness
utility-value
scale
NEW
TECHNOLOGY
TECHNOLOGY INNOVATION
Uncertainty of Technological Innovation
Cost
of Innovation
TECHNOLOGY
DIFFUSION
Prime
Adopters
Primary
adopters
Secondary
adopters
Tertiary
adopters
Inert
adopters
Selective
Exposure
Selective
Perception
Selective
Retention
PRODUCT
TECHNOLOGY
TECHNOLOGY
EVOLUTION
TECHNOLOGY DEVELOPMENT
MANAGEMENT
DECISIONS
TECHNOLOGY INITIATIVES
TECHNOLOGY
SCREENING
TECHNOLOGY
IMPACT
TECHNOLOGY
COSTING
TECHNOLOGY IMPLEMENTATION
HISTORIC FINANCIAL DATA
NEW TECHNOLOGY FINANCIAL SCENARIOS FORECASTS
NEW
TECHNOLOGY RISK
Feasibility
Uniqueness
Future
Development
Process
Efficiency
Pay-back
Certainty
NEW TECHNOLOGY ADOPTION
Fixed Technology Spend
Technology Innovation Goals
Technology Evaluation Goals
Ad Hoc Technology Innovation
No
Technology Goals
TECHNOLOGY
DECISIONS
New Technology Evolution
Obsolete Technology Replacement
Technology Diversification
Technology Utilization
Competitive Technology Adoption
TECHNOLOGY INITIATIVES
Internal
Development
Joint
Ventures
Licensing
Purchase
Ad Hoc
TECHNOLOGY
SCREENING
Formal Technology Targets
Informal Technology Targets
Senior Management Responsibility
Middle Management Responsibility
Ad
Hoc Screening
TECHNOLOGY
IMPACT
New Technology Operation Criteria
New Technology Performance
New Technology Durability
New Technology Reliability
New Technology Longevity
NEW TECHNOLOGY FUNDING
Costs Funded from Reserves
Costs Funded from Profits
Costs Funded from Cash-Flow
Costs Funded from Equity
Costs Funded from Loans
TECHNOLOGY IMPLEMENTATION
Technology
Security
Technology
Duration
Technology Cost Elasticity
Technology Lead-Times
Technology Supply Factors
Base Forecast : Median Market Scenario
New Product Development
New Technology Investment
Customer / Order Processing Systems Investment
Systems
Investment
Materials & Energy Cost Scenarios
Plant & Equipment Cost Scenarios
New Product & New Technology Cost Scenarios
Profit Impact From Process Cost Reduction
Capital Investments Options: Process Plant & Equipment