Technology Strategy
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Technology is the practical application of knowledge to the development and application of products, processes, operations and services.

Technology adds value to a company’s activities primarily in two ways:

·        By providing better products and services and more effective processes

·        By allowing the company the company to focus on doing the right things.

 

More value is to be gained by developing the best products than by the best development process. The key to competitive success is hence to develop a system for identifying areas where technological leadership adds value to the activities of customers in the company’s marketplace. At the same time the company needs to be watchful for areas where competitors see they can gain a customer’s business.

Technology in Perspective

Technology provides a route to long term growth in the organisation through allowing the company to:

1.      Differentiate products and develop new products

2.      Develop new business opportunities

3.      Reduce costs of its operations

4.      Facilitate strategic change           

The technology which is used to further growth is sometimes clearly visible as a characteristic or component of a product or service. Sometimes technology may be more subtle, for example the system a company uses to manage its knowledge about its current and desired future customers and their use, needs and planned use of products and services the company provides, or, indeed the system the company uses to manage and present information about its own products and services.     

Three technology areas support a company's business, aligned in turn with the "value disciplines" (Treacey, Wiersema, HBR Jan 1993):

Development and relationship technologies are focused outside the business towards dealings with customers and suppliers.

Internal process technologies, as the name suggests, are concerned with the way the company works internally. Few customers have any real interest in the company’s internal processes in themselves yet they have a strong interest in the company being able to deliver results the performance of which is based on the effectiveness of internal processes. The externally focussed technologies have little value unless the internal processes are effective. Imbalanced attention towards externally focused technologies can be detrimental to a company’s business, for example where a company fails to deliver the world's product against its required order date.

Development technologies include the knowledge and application of knowledge which is put towards developing new products, new markets and new business for the company to engage in. Particular processes which support development technologies include the company’s opportunity capture and analysis process, the product development process and the company’s market opportunity analysis system. The key aspect here is picking the right technology to be developing rather than the system itself.

Relationship technologies are the systems a company uses to liaise and to communicate with its external trading partners: its customers and suppliers. Relationship technologies include the order taking and invoicing process, the external product and service delivery process, the customer knowledge management system. Relationship technologies build upon the company's internal process capabilities and take that operational excellence capability out into the trading marketplace.

Once the technology focus is agreed the company needs to make sure it has systems that will deliver the expected results. In short, it needs to do its things right. The way to do that is through effective project and process management systems.

Sounds conceptual ? Probably. No apologies! You can't fly to the moon if you don't know physics! A clear conceptual basis provides the framework to plan strategically.

Clermiston has the tools and methodologies to convert these concepts into actions that will give you effective results.

Customer input is critical to the commercial success of your chosen technology strategy. This input needs to be gained systematically, for example using a strategic positioning survey (click on the link for a sample pdf file). The results of this survey highlight gaps where your company can make a measurable improvement relative to your competitors.

Just to get back "down to earth" try these technology relevant questions:
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Who are your top 20 customers ?

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What margin do you make via each of these customers ? How does it compare with overall margin ?

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What are your top 20 products ?

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What margin do you make from these products ? How does this margin compare with overall margin ?

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How secure is the technology platform on which these products are based ?

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Is the technology platform translatable into other product areas ?

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How dependent are your customers on you for the product they buy ?

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What joint development programs are you doing with your top 20 customers ?

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Are commercial operations and technical people all involved in development programs , and each accountable for the program success ?

Contact Clermiston  or call John (02 9416 8865 or 0418 263 795) for a facilitative discussion.

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