With new technologies appearing more rapidly than ever before, how do you pick the ones that will deliver competitive advantage and identify those that could threaten your business?
Dr Letizia Mortara says companies need comprehensive technology intelligence (TI) systems to make sure they spot relevant new technologies and understand how effective they are at doing so.
Robotics, artificial intelligence, augmented and virtual reality, nanotechnologies, synthetic biology, 3D printing: manufacturers are trying to keep up with a multitude of potentially disruptive technologies.
And with the rate of technological change accelerating faster than ever, there are plenty more just over the horizon. But how do you know which of the emerging technologies will present an opportunity or threat to you and your company?
Picking up the early warning signs and understanding the implications of new technological trends is not a trivial or straightforward task.
Just searching online, for example, will not deliver sufficient insights for the identification of new technology opportunities or support the implementation of an effective strategy for businesses in today’s competitive market.
TI activities aim to identify early technology breakthroughs and trends that could create long-term competitive advantage or could impact negatively on the business.
As manufacturers come under increasing pressure to maintain a rapid pace of innovation, they are dedicating more resources to developing TI systems that can efficiently capture information from the external environment in order to develop insights that support a variety of decision-making and strategic planning activities.
What do we mean by TI?
TI covers a whole range of activities, including scouting networks, patent mining tools, calls for information via idea competitions or working with external intermediaries or consultants that can search new trends for you.
These activities can take place across all parts of an organisation and they are often informal or carried out ad hoc. When that is the case, it becomes difficult to evaluate if the TI system is making an effective contribution to the company’s performance.
A further challenge is that even if the firm has good technology intelligence, getting that information efficiently and accurately to decision-makers can sometimes be problematic.
So, how does a company know if the technology intelligence system it has put in place is performing well?
Evaluating the quality of technology intelligence
At the Institute for Manufacturing (IfM), we wanted to develop a framework that companies could use to evaluate their TI system regardless of what type of TI activities they are undertaking.
We looked at what companies are doing in practice and integrated our findings with an academic understanding of the development of impact measurements.
We asked 12 companies – ranging in size from 800 to more than 250,000 employees – how they undertook and measured TI – both formally and informally. We used their responses to develop a matrix that can be used by organisations to evaluate their TI activities.
The matrix incorporates the main strategies being used by companies to measure TI performance and suggests that companies should use a combination of these metrics to appraise TI activities.
The evaluation matrix combines measures of the intensity of the TI activity (how much TI work has been done) with the TI impact (the quality of the outcome of TI).
These can be reviewed in the short term (the success of a project) or in the long term (the health of a company). It encompasses four types of metrics:
Activity-based and project-related: these are the most easily quantifiable metrics and are less subject to personal bias. A good example of this metric would be how many patents have been reviewed for a particular project.
This type of metric is useful for understanding how far you have got in the review of available information, but stays away from measuring what the information is telling you. This can be helpful when you want to avoid forming an opinion too early, based on only partial data.
Activity-based and firm-related: this type of metric evaluates how TI is benefiting the whole company. It looks, for example, at how established and integrated the TI activity is with the rest of the organisation.
For example, are you capable of using TI insight to guide the firm? Can you do patent analysis? Do you recognise what the cumulative TI insights are telling you? Can you systematically embed these in your decision-making and planning?
Outcome-based and project-related: these metrics are typically used after a project has been completed to evaluate its success. People tend to associate the success of the project with the quality of the TI received.
However, as a project’s success can be impacted by many other factors beyond the quality of TI – the resistance of a decision-maker to act on the insight, for example – this measure cannot be used in isolation.
Outcome-based and firm-related: this is important for measuring the long-term effectiveness of TI for the company. Data needs to be collected over a long–time period to understand whether TI activities are helping the company survive and prosper.
Very few of the companies surveyed measured TI in this quadrant; it is often subjectively measured as a ‘sense’ or ‘feel’ about how well TI is delivering value to the firm. However, if short-term metrics are not used in combination with these long-term ones, the TI officers might struggle to demonstrate the value of their work.
As well as being a structured way of capturing and assessing the range of TI activities within an organisation, the TI matrix also has an important role to play in communicating the importance of TI across the organisation and, specifically, to decision-makers.
This can be something of a challenge. All the companies we interviewed reported difficulties in communicating their TI insights to senior decision-makers. Even when the insights are clear, relevant and well-presented, they are not always acted upon.
Much depends on the subjective perceptions and personalities of the decision-makers who sometimes underestimate the depth and complexity of the TI activity.
One of our interviewees said: “…you do get people in management who think that everything is on the internet, where you can just google [it]. We are trying to prove that in fact this is not the case.”
On the contrary, taking a systematic approach to gathering and using TI is going to become increasingly important to manufacturers of all sizes, as new technologies continue to come at them thick and fast.
Communicating Technology Intelligence: a guide for practitioners
Carrying out effective TI is only part of the problem. Communicating its findings to senior decisionmakers can be just as challenging.
Dr Mortara has written a practice guide to help you understand why these difficulties arise and give you some practical strategies to overcome them. The guide can be downloaded here.
Dr Letizia Mortara is a Senior Research Associate at the University of Cambridge, specialising in strategic technology management and technology enterprise. She is an associate editor for the journal, R&D Management. Letizia also runs workshops on technology intelligence at the IfM. To register your interest in attending, email: firstname.lastname@example.org
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