Analysis of technology management in front end stage

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Analysis of technology management in front end stage of innovation process Visa Friström T-109.

Analysis of technology management in front end stage of innovation process Visa Friström T-109. 5410 Technology Management in the Telecommunications Industry 3. 10. 2006

Agenda § § § Background Objectives Research approach Case Theory Results © Ericsson AB

Agenda § § § Background Objectives Research approach Case Theory Results © Ericsson AB 2006 2 2006 -10 -3

Backround § § § Thesis done for LMF Ericsson’s R&D department Product Management has

Backround § § § Thesis done for LMF Ericsson’s R&D department Product Management has increasingly transformed responsibility to System Management LMF Ericsson’s R&D department’s System Management has identified the importance of technology management and has started to implement it consciously into M-MGw development System Management assigned new technology manager Technology manager started to identify and implement technology management routines The identified management area is called TM © Ericsson AB 2006 3 2006 -10 -3

Objectives § Analyze the current technology management model and identify possible development issues and

Objectives § Analyze the current technology management model and identify possible development issues and paths in context of newest articles on technology management. – – – § Identify the most important articles concerning technology management How is technology management perceived in the management literature and journals? How does the current Ericsson’s model map in their context and what is missing? What are the dimensions that SM’s technology management should focus on? Provide further guidelines for TM’s development © Ericsson AB 2006 4 2006 -10 -3

Research approach § Two different approaches – TM in context of technology management frameworks

Research approach § Two different approaches – TM in context of technology management frameworks (greater focus) § What dimensions are missing in TM? § Mapping of technology management routines and issues. – TM in context of fuzzy front end models § How does TM’s front end elements relate to front end theories? © Ericsson AB 2006 5 2006 -10 -3

Case § Product: Mobile Mediagateway – Node in mobile core network – Bridge between

Case § Product: Mobile Mediagateway – Node in mobile core network – Bridge between different transmission technologies § Environment – Product management responsible for the commercial and strategic aspect (mainly situated in Sweden) (WHAT / WHEN) § product strategy, roadmap etc. – System management responsible for technical aspect – implement what product management decides (HOW) § basic operational R&D activities – Technology Management (TM) is created inside SM. § Problem: – Product management does not really understand the technical aspect -> bad decisions on roadmaps and other § ->need for technology management © Ericsson AB 2006 6 2006 -10 -3

Case § The main object of TM was aimed to find, investigate and suggest

Case § The main object of TM was aimed to find, investigate and suggest new technologies to be used in order to enhance the profitability of the current product § TM’s suggestions would serve as an input to Mobile Media. Gateway's technology roadmap discussion – Roadmap managed by product management © Ericsson AB 2006 7 2006 -10 -3

Case § § § TM is made of technology manager and four different areas

Case § § § TM is made of technology manager and four different areas that it manages All of the management areas’ activities are in Fuzzy Front End (pre-project activities) Chosen management areas – – © Ericsson AB 2006 Research § Segmented from Ericsson’s general research § Research Mediagateway’s possible future technologies § Participates on standardization relevant to Mediagateway § Enables TM to realize different possibilities that technology can offer to Mediagateway Prototyping § Prototypes possible future features in mediagateway that are not currently present in roadmap Foresighting § Mainly implements technology foresighting through Technical Solution Area responsibles (TSA) § TSA’s mission is to foresight specific technology areas relevant for mediagateway § There is one TSA for evey technical area Preliminary study § Quick studies on different technical subject § Supports TM and Product Management on selecting technologies / product features 8 2006 -10 -3

Theory § What is technology management? – Relative concept with various interpretations – Generally

Theory § What is technology management? – Relative concept with various interpretations – Generally considered as § Union between business, science and technological know-how § Managing the innovation process by integrating business and engineering thinking – Definition by European Institute of Technology Management (EITM) § Technology management addresses the effective identification, selection, acquisition, development, exploitation and protection of technologies (product, process and infrastructural) needed to maintain [and grow] a market position and business performance in accordance with the company’s objectives”. © Ericsson AB 2006 9 2006 -10 -3

Theory § Two important aspects in technology management – importance of establishing and maintaining

Theory § Two important aspects in technology management – importance of establishing and maintaining the linkages between technological resources and company objectives – technology management requires effective management processes § Technology management is concerned with how an organization manages all its technical activities, not just those which are confirmed to R&D department. § Usually product management plays an important role in technology management © Ericsson AB 2006 10 2006 -10 -3

Theory § Innovation process – Concepts § Invention vs. innovation § Types of innovation

Theory § Innovation process – Concepts § Invention vs. innovation § Types of innovation - Incremental innovation vs. radical innovation - Incremental innovations cover ~90% of innovation activities (Rothwell and Gardiner) – Innovation process divided into three subgroups: § Fuzzy Front End (FFE) § New Product Development (NPD) § Commercialization © Ericsson AB 2006 11 2006 -10 -3

Theory § Innovation process © Ericsson AB 2006 12 2006 -10 -3

Theory § Innovation process © Ericsson AB 2006 12 2006 -10 -3

Theory § Cost curve – front end plays important role in innovation process due

Theory § Cost curve – front end plays important role in innovation process due to it’s great impact on rest of innovation process © Ericsson AB 2006 13 2006 -10 -3

Theory § § § Fuzzy Front End concept defines the activities that take place

Theory § § § Fuzzy Front End concept defines the activities that take place before start of NPD project It is mainly the area between when and idea and/or opportunity are first considered and when new product development project can be started Have many names: pre-project activities, upfront activities, opening phases, front end of innovation. “Fuzzy” is used to describe the chaotic and unpredictable phases prior any product development Organizations excelling in Fuzzy Front End management are more likely to win the innovation competition Cooper and Kleinschmidt study: only 7% of total NPD money spent in Fuzzy Front End. © Ericsson AB 2006 14 2006 -10 -3

Theory § Effort / budget spent on Front End activities – Not enough according

Theory § Effort / budget spent on Front End activities – Not enough according to experts © Ericsson AB 2006 15 2006 -10 -3

Theory § Stage-gate by Robert Cooper Fuzzy Front End / Product Concept © Ericsson

Theory § Stage-gate by Robert Cooper Fuzzy Front End / Product Concept © Ericsson AB 2006 16 2006 -10 -3

Theory § Fuzzy Front End divided into operative and strategic level (Poskela et al)

Theory § Fuzzy Front End divided into operative and strategic level (Poskela et al) © Ericsson AB 2006 17 2006 -10 -3

Theory § TM’s position in innovation process © Ericsson AB 2006 18 2006 -10

Theory § TM’s position in innovation process © Ericsson AB 2006 18 2006 -10 -3

Theory § Operative and strategic level integration mechanisms (Poskela et al) © Ericsson AB

Theory § Operative and strategic level integration mechanisms (Poskela et al) © Ericsson AB 2006 19 2006 -10 -3

Theory § Removing Fuzziness from Front End (some ideas) – – – – ©

Theory § Removing Fuzziness from Front End (some ideas) – – – – © Ericsson AB 2006 Identify activities that are pre-project activities Systemize and create management processes § e. g. some gate approach such as stage-gate § Level of control should depend on type of innovation - incremental -> more control - radical -> less control (more creativity) Collaborative culture that enoguraes knowledge creating, inovation and creativity Systemized idea capture and handling § e. g. idea bank Early involvement of business champion Integrate business thinking into research Early customer involvement! § Methods - Voice of customer - Camping out with customer - Lead user method - Rapid prototypes + workshops 20 2006 -10 -3

Background Theory § Innovator’s dilemma – – – © Ericsson AB 2006 How to

Background Theory § Innovator’s dilemma – – – © Ericsson AB 2006 How to prepare for future disruptive technologies? § e. g. Technology Foresighting Problem of dualism “Weak signals” § companies that exist in changing business environments need to be attentive to “weak signals” § When a new technology threat or opportunity appears on the horizon the information of it is first very vague but progressively evolves into more precise information. § “weak signal” is “a factor for change hardly perceptible at present, but which will constitute a strong trend in the future 21 2006 -10 -3

Theory – Technology management § Three levels of technology management – Corporate § e.

Theory – Technology management § Three levels of technology management – Corporate § e. g. How many R&D centers? Hw to gain access to technology? – Business (strategic) § e. g R&D portfolio management – Operational § e. g. project selection and evaluation © Ericsson AB 2006 22 2006 -10 -3

Theory – Technology management § § Gregory’s model for technology management (ISAEP) Served as

Theory – Technology management § § Gregory’s model for technology management (ISAEP) Served as basis for many technology management frameworks and definitions – – – © Ericsson AB 2006 Identification § identify technologies that are not currently part of technology base of company but that could have an impact on current and future business. Selection § selection is about choosing between various different technologies those that should be supported by the organization (e. g. by using portfolio methods, expert judgments, pilot studies etc. ). Acquisition § acquisition is concerned about access to needed technologies and their integration into the organization. This includes activities such as R&D, licensing, joint venture and organizational learning Exploitation § exploitation is about systematic conversion of technologies into marketable product or realization of their value though sale, license or joint venture Protection § protection is about recognizing and protecting the commercial advantage which control of key technologies can offer. 23 2006 -10 -3

Theory – Technology management § R. Phaal’s technology management framework © Ericsson AB 2006

Theory – Technology management § R. Phaal’s technology management framework © Ericsson AB 2006 24 2006 -10 -3

Theory – Technology management § § § Evolved from Gregrory’s model Indentified three business

Theory – Technology management § § § Evolved from Gregrory’s model Indentified three business processes (Strategy, Innovation, and Operations) where the ISAEP processes work Aim of technology management according to the framework – – § Manage the balance betwen market pull and technlogy push Manage the relation between technical and commercial perspective § especially the communication between them Integration on technology management processes (ISAEP) and core business processes § The aim of efficient technology management is to ensure that technological issues are integrated appropriately into the business processes. The importance of establishing and maintaining the linkages between technological resources and company objectives and that technology management requires effective management processes R. Phaal identifies technology roadmapping as one the most important tools for technology management. – Bridges the gap between technical and commercial aspect © Ericsson AB 2006 25 2006 -10 -3

Theory – Technology management § Roadmap - efficient tool for technology management – –

Theory – Technology management § Roadmap - efficient tool for technology management – – © Ericsson AB 2006 Betters communication between commercial and technical sides Contributes to integration of business and technology and to the definition of technology strategy 26 2006 -10 -3

Theory – Technology management § Levin et al’ study on technology management routines –

Theory – Technology management § Levin et al’ study on technology management routines – © Ericsson AB 2006 Technology managers in various companies identified the following routines as vital for technology management 27 2006 -10 -3

Theory – Technology management § 24 Critical Technology Management Issues by Scott et al

Theory – Technology management § 24 Critical Technology Management Issues by Scott et al (2000) 1. Strategic planning for technology products 2. New Product Project Selection 3. Organizational Learning about technology 4. Technology Core Competencies 5. Cycle Time Reduction 6. Creating a Conducive Culture 7. Coordination and Management of NPD teams 8. Technology Trends and Paradigm Shifts 9. Involvement of Marketing Groups 13. Organization Structure for R&D 14. Alliances/Partnerships Between Technology Companies 15. Within-Company Technology Diffusion and Transfer 16. Using High-Tech for Competitive Advantage 17. Involvement of Manufacturing in NPD 18. Globalization of Product Development Processes 19. Resource Allocations to High-Tech Activities 20. Establishing a “Technology Vision” 21. Productivity of Product Development Activities 22. Rewarding and Educating Technical Personnel’ 23. Project Continuance/Discontinuance 24. Oversight of High-Tech Activities 10 Customer Supplier Involvement 11. Senior Managers’ Involvement in Technology 12. Soft Skills for Technical Personnel © Ericsson AB 2006 28 2006 -10 -3

Results - conclusions Strengts in TM – Acknowledged importance of technology management – Identified

Results - conclusions Strengts in TM – Acknowledged importance of technology management – Identified importance of front end stage in direction of technology development – TM’s objective to find, study and suggest technologies for Mobile Mediagateway’s roadmap discussion is the same idealogy as in ISAEP and FFE processes. – Use of technology roadmapping as long term planning – Chosen elements and the objective of TM is very much managing technology from technical perspective, but not necessary technology management as perceived in literature. © Ericsson AB 2006 29 2006 -10 -3

Results - conclusions Weaknesses in TM (1/2) – TM has misunderstood the concept of

Results - conclusions Weaknesses in TM (1/2) – TM has misunderstood the concept of technology management to some extent –business/commercial aspect lacking – Integration of strategic level and operative level of Fuzzy Front End not working § Communication between Product management and TM not effective. . TM unaware of all product management’s activities § Product management (commercial aspect) not enough capable in technical matters and thereby is unable make balanced decisions © Ericsson AB 2006 30 2006 -10 -3

Results - conclusions Weaknesses in TM (2/2) – Technology management routines and issues are

Results - conclusions Weaknesses in TM (2/2) – Technology management routines and issues are present in M-MGw’s innovation process but not identified and managed as whole – Technology management importance as managing the balance between technology push and market pull, and integrating and managing ISAEP processes not acknowledged and understood – Fuzzy Front End really Fuzzy – no gate management or other methods © Ericsson AB 2006 31 2006 -10 -3

Results - conclusion § Future development direction of TM is suggested to be –

Results - conclusion § Future development direction of TM is suggested to be – – § implementing the full aspect of technology management as integrator of commercial and technological sides and serve through TM’s technological expertise, and knowledge on commercial aspect to guide the factors that control Mediagateway’s eventual direction. This happens by – Creating better interfaces and relations with § Product Management and other commercially valid units inside – – – © Ericsson AB 2006 Ericsson § Market (customers). Managing technology roadmap to input product and technology direction Creating technology strategy linked to business strategy Identify and mangage activities in ISAEP processes 32 2006 -10 -3

Results -suggestions § Fuzzy front-end – Start applying a systemized and controlled approach to

Results -suggestions § Fuzzy front-end – Start applying a systemized and controlled approach to front end since product development is about incremental innovation – Direct market involvement in the technical side § Early prototyping with customers - Lead user method considered § Direct contact to sales and marketing unit – Include business thinking in research and manage the level of control – Study whether Fuzzy Front End would need more effort and money § Currently little over 7% of budget goes to Fuzzy Front End © Ericsson AB 2006 33 2006 -10 -3

Results - suggestions § Technology management – Identify and manage means of communication between

Results - suggestions § Technology management – Identify and manage means of communication between commercial and technical sides – Identify market pull in order to manage the balance between market pull and technology push – Identify technology management activities and manage them in ISAEP processes – Involvement and input to project selection (last phase before NPD) § Centrepiece of technology management – Create own technology roadmap for long term planning – Include foresighting in long term roadmapping (TSA) – Create technology strategy and link it to business strategy – Understand product strategy (e. g. What is platform’s defining technology) © Ericsson AB 2006 34 2006 -10 -3

Questions? © Ericsson AB 2006 35 2006 -10 -3

Questions? © Ericsson AB 2006 35 2006 -10 -3

© Ericsson AB 2006 36 2006 -10 -3

© Ericsson AB 2006 36 2006 -10 -3

Results -suggestions § Lead user method (Von Hippel) – 1. – 2. – 3.

Results -suggestions § Lead user method (Von Hippel) – 1. – 2. – 3. § Laying the foundation by identifying the target market and the type and level of innovations desired by key stakeholders within the company § Determining technology trends by inquiring from the experts from the field that they are exploring § Identifying lead users by networking process to identify and learn from users at the leading edge of the target market and related markets. Group member collect information that helps them to identify especially promising innovation and ideas that might contribute to the development of breakthrough products. Teams already become forming preliminary product ideas and to assess the business potential of theses concepts. § – © Ericsson AB 2006 4. § Developing the breakthroughs by developing the preliminary concepts toward completion. The team hosts a workshop with several lead users, a half-dozen in-house marketing and technical people, and the lead user team itself. 37 2006 -10 -3