"Fast-Start Technology Roadmapping" - R. Phaal, CJP Farrukh ...


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"Fast-Start Technology Roadmapping" - R. Phaal, CJP Farrukh ...

  1. 1. Revised 6th October 1999 – for IAMOT 2000 (Track 8) Fast-Start Technology Roadmapping By: R Phaal, CJP Farrukh and DR Probert Department of Engineering, University of Cambridge, CB2 1RX, UK Abstract Technology is an important strategic asset for many firms, and there is an increasing need to include technological considerations in strategy and planning processes. However, establishing and communicating the linkages between technology resources and company objectives presents a continuing challenge for many organisations. Technology roadmapping is a technique that has the potential to support technology strategy and planning. Such maps can take various specific forms, but generally comprise a time-based chart linking technology developments to future product and market requirements. The method has been successfully applied in a number of industrial contexts; however, initiating and maintaining the method on an ongoing basis can be difficult. This paper describes the development and application of a process for supporting the rapid initiation of technology roadmapping in manufacturing firms. The 'start-up' process comprises a series of facilitated workshops that bring together various functions in the business, including technology and marketing. The process supports understanding and communication of the relationships between market and business requirements, product and service concepts, and technological solutions. The approach encourages learning and staff involvement, and identifies key knowledge gaps, enabling a company-specific roadmapping process to be initiated quickly. In addition, theoretical aspects of technology roadmapping are discussed, in the context of managing technological knowledge. Keywords: Technology roadmapping; technology planning; technology strategy. 1. Introduction The effective integration of technological considerations into business strategy is a key aspect of business planning. Many companies are increasingly aware of the strategic importance of technology in delivering value and competitive advantage. These issues are becoming more important as the cost, complexity and rate of technology change increase, together with the globalisation of competition and technological sources. The essence of business strategy and planning is concerned with aligning the activities and resources of the firm in such a way as to generate a sustainable competitive position in the market place. This requires a sound understanding of the nature of the changing business environment in the medium to long term (i.e. markets, customers, competition and regulation), in terms of external opportunities and threats, together with the internal strengths and weaknesses of the organisation. Technology considerations impact on both external and internal aspects of strategy, in terms of the sources of new technology and the strength of competitors' technology, together with the value of technology as a resource within the firm, providing the capability to -1-
  2. 2. develop and deliver products and services. In this context, technology strategy should be considered as an integral part of business strategy and planning, rather than as a separate process (e.g. Floyd, 1997, Matthews, 1992 and Metz, 1996). 2. A framework for technology planning There are many published definitions of technology (e.g. Floyd 1997, Whipp 19991, Steele 1989). Examination of these definitions highlights a number of factors that characterise technology, which can be considered as a specific type of knowledge. The characteristics of technology which distinguish it from more general knowledge types are that it is 'action-oriented' and focuses on the 'know-how' of the organisation. While technology is often associated with science and engineering ('hard' technology), the processes which enable its effective application are also important, for example new product and innovation processes, together with organisational structures and supporting communication / knowledge networks ('soft' aspects of technology). Technology can be best considered in the business context as an important type of resource, and hence there are considerable linkages with other resource-based views of the firm (e.g. Grant, 1991), such as competence (Hamel & Prahalad, 1994) and capability approaches (Teece et al., 1997). A key objective of technology management is to ensure that technological resources are well linked to business requirements. Temporal aspects are crucial for technology planning, both in terms of internal cycles within the firm (e.g. strategy, budgeting, planning and new product development cycles), as well as external factors (e.g. competitor activity, changes in the market, and technological developments). A framework has been developed (Fig. 1) which brings together knowledge and resource based concepts, drawing on work by Andreasen and Hein (1987). This framework addresses the area of technology planning and comprises three 'levels': • Business level: the organisation and associated networks, business portfolio, marketing and financial functions, together with strategy development and implementation processes required to deliver value to the business into the future (e.g. Mintzberg, 1994). • Product level: the product and service portfolio and platforms, manufacturing and operations functions, together with innovation and new product development and introduction processes (e.g. Twiss, 1986; Kline, 1991). • Technology level: the technology, engineering and science skills and platforms of the firm, together with technology management processes required for maintaining the technology base (i.e. identification, selection, acquisition, exploitation and protection of technology, Gregory, 1995). Effective alignment of technology with business objectives requires effective mechanisms for knowledge flow between the levels, in terms of 'pull' to ensure that business and market requirements are understood at the product and technology levels, and 'push' to ensure that technological capabilities are understood at the product and business levels. Effective technology management requires an appropriate balance between market/product pull and product/technology push. Knowledge management concepts are important in this context, such as organisational learning, explicit and tacit knowledge (Nonaka, 1991), together with -2-
  3. 3. 'dimensions' of knowledge, such as 'know-why', 'know-what', 'know-how', 'know-who' and 'know-when' (Chai et al., 1999), which are reflected in the framework. “Know-why” Business Level Focus: Organisation, networks and business portfolio; marketing & finance Process: Strategy development and implementation to deliver value into the future Organisation / Context “Know-what” Push Product Level Pull mechanisms Focus: Product /service portfolio and platforms; manufacturing & operations mechanisms - capabilities - requirements (knowledge Process: Innovation, and new product development and introduction over time (knowledge flows) flows) “Know-who” “Know-how” Technology Level Focus: Technology-science-engineering base / platforms Process: Technology management (ISAEP) to maintain the technology base Time “Know-when” Fig. 1 - Technology planning framework Various types of mechanisms can support knowledge flows and learning across levels, including multidisciplinary teams, staff mobility, communication systems, business processes and management tools. Examples of such tools include technology roadmapping, together with portfolio approaches (e.g. Cooper et al., 1997), technology valuation methods (e.g. Hartmann, 1998) and quality function deployment (e.g. Martinich, 1997). The potential competitive advantage of technological resources can only be fully realised if the knowledge flows between the levels are efficient and effective, creating a technological capability (i.e. "A capability is the capacity of a team of resources to perform some task or activity", Grant, 1991). 3. The technology roadmapping process The technology roadmap (TRM) approach is closely related to the framework described above, as technology, product and market levels, and the time dimension are primary components. Technology roadmapping can facilitate supporting and communicating technology strategy and planning. Roadmaps (or route maps) can take a variety of specific forms, depending on the particular company context (Barker and Smith, 1995; Willard and McClees, 1987; Groenveld, 1997), but generally comprise a number of 'levels' on a time-based chart (see Fig. 2). Specific technology programmes or developments are shown on the map, linked to future products and services, and then to market or business opportunities. -3-
  4. 4. time Business / Market Product / Service Technology Fig. 2 - Technology Roadmap (TRM) - schematic Technology roadmaps have been applied successfully in a number of industrial organisations. An eight stage ‘TRM-project process’ has been documented (EIRMA, 1997) based on the experiences of a group of European companies. Meanwhile, a group of US industrialists and academics propose a three phase generic roadmapping process (Strauss et al., 1998). Both groups indicate that the development of an effective roadmapping process within a business is reliant on significant vision and commitment for what is an iterative, and initially exploratory, process. Recent industrial workshops1 in the UK indicate that key practical challenges include: • Selling the concept – benefits of the TRM process • Initiating the TRM process – how to get started • Defining the scope of the TRM process – aims and resources • Integrating the TRM process into existing business processes and systems • Maintaining the TRM process on an ongoing basis Reviews of literature and practice indicate that there is presently no easy way for a company to address these challenges. However, the preliminary results of a survey1 of UK technical directors have revealed that 30% of respondents are actively seeking ways to improve technology planning using TRM. To fill this gap a detailed process is being developed to support the rapid initiation of technology roadmapping. This 'start-up' process comprises a series of four facilitated workshops that bring together various functions in the business, including technical and marketing. The process has been designed cover the key elements of technology roadmapping in a condensed time frame, to provide a quick overview of the potential benefits of the technique. The research approach being used to develop the TRM start-up process is described in Section 4. The process is detailed in Section 5 and the results of the applications are given in Section 6. 4. Research methodology The development of the TRM start-up process has been undertaken in the context of a 'procedural action' research framework, as set out by Maslen and Lewis (1994); see also Platts (1993). Procedural action research provides a methodology whereby business systems can be 1 Industrial interaction as part of an Engineering and Physical Sciences Research Council sponsored research project GR/L62900, ‘Strategic Technology Management – linking technology resources to company objectives’. -4-
  5. 5. investigated by a process of active intervention. Action research relies upon extensive access to organisations, which is usually forthcoming due to the practical, useful nature of the outputs. There are two stages associated with procedural action research: development and testing. During the development stage the procedure is expected to change significantly, incorporating improvements based on experience during its application. During the testing stage the procedure should not change significantly, although some refinement can be expected. A primary objective during the testing phase is to develop the contingent framework within which the procedure is applicable (i.e. a classification of organisations within which the procedure has been validated). The TRM start-up process has been applied four times to date (see Table 1) in the development phase of the programme: two times in an 'exploratory' mode (i.e. to develop concepts and process) and two direct applications of the draft process procedure. Table 1 - TRM start-up process applications # Company ID Product Area Turnover ($ millions, '98) Employees Company Business Unit (BU) Company BU 1* Company A Postal services Future technology / markets 6,750 - >200,000 50 - Automation systems 2* Company B Industrial coding Business unit X - Inkjet 200 140 1,400 60 systems 3 Company B Industrial coding Business unit Y - Laser 200 15 1,400 25 systems 4 Company C Security / access Cards & readers products 20 - 120 - systems * Exploratory cases At this stage the TRM start-up process is judged to be fairly stable, and it is anticipated that the testing phase will begin shortly. Testing will entail the application of the method in a variety of industry sectors and company types. 5. TRM start-up process Process overview The aims of the TRM start-up process are to: 1. Support the start-up of company-specific TRM processes. 2. Establish key linkages between technology resources and business drivers. 3. Identify important gaps in market, product and technology intelligence. 4. Develop a ‘first-cut’ technology roadmap. 5. Support technology strategy and planning initiatives in the firm. 6. Support communication between technical and commercial functions. The process is based around four key stages, which take the form of facilitated workshops (see Fig. 3), together with planning, co-ordination and implementation activities. The process is flexible in terms of time, resources and focus, and workshops can be extended or compressed depending on available information and the unit of analysis. Typically the process is initially applied in a series of four half-day workshops. The main elements of the process are summarised below. -5-
  6. 6. C = Co-ordination Workshop 2 - Product C Product feature concepts Impact ranking of features Planning Workshop 1 - Market Workshop 4 - TRM Implementation C Company requirements C Performance dimensions Map product features C Knowledge gaps Process planning Business / Market drivers Map technology response Implementation plan Workshop 3 - Technology Technology solutions C Impact ranking of solutions Fig. 3 - TRM start-up process Several factors should be considered prior to initiation of the TRM start-up process workshops, including: • Identification of appropriate participants. • Required resources and scheduling of workshops. • Identification of available information. • Definition of the unit of analysis. • Clear articulation of company objectives for the process. Workshop participants should include both technical and commercial functions (e.g. research, development, manufacturing, marketing, finance). Continuity of participation is desirable, at least for a core set of participants. Establishing the objectives for the process is important, as a means for judging success, together with ensuring that the focus of the process is appropriate. Co-ordination is a key element of the TRM start-up process, with the need to ensure that the process is continually aligned with company needs (co-ordination points are included between each step - see Fig. 3), as the results from each workshop cannot always be predicted in advance. Reflection and discussion of workshop outputs is sensible prior to starting the next workshop. For this purpose, the setting up of a 'steering group' is recommended to co-ordinate the process. Workshop 1: Market This workshop aims to establish a set of prioritised market and business drivers for the future, reflecting external and internal factors. The 'performance dimensions' which drive product development within the business are considered first (e.g. speed, weight, reliability, aesthetics). Then market and business drivers are identified - a 'level up' from the performance dimensions (i.e. customer and business motivation), grouped and prioritised. Fig. 4 - The 'performance envelope' is dictated by a trade-off between market pull (requirements) and technology push (capabilities) Technology capabilities and constraints (‘push’) Market drivers (‘pull’) Performance envelope Performance dimensions (size, weight, speed, etc.) -6-
  7. 7. Starting with performance dimensions is helpful, as these relate directly to the product, and can usually be readily identified. Also, product performance is a fundamental factor that can be used to link the market drivers to technological capability - see Fig. 4. Workshop 2: Product This workshop aims to establish a set of 'product feature concepts' which could satisfy the drivers identified in Workshop 1 - a 'level down' from the performance dimensions. The market / business drivers and product feature concepts together define a simple grid which can be used to investigate the relationship between features and drivers (see Fig. 5). The product feature concepts are grouped and their impact ranked for each market and business driver, and alternative product strategies considered (in response to combinations of market and business drivers). Technology Route Map time Business / Market drivers Business / Product features Market Product features Technology solutions Product / Service Technology Analysis Grids Fig. 5 - Analysis grids Workshop 3: Technology This workshop aims to identify possible technological solutions that could deliver the desired product features. These solutions are grouped into technical areas (or 'routes'), which taken with the product features defined in Workshop 2, define a second analysis grid (see Fig. 5). This links directly to the market-product grid described in Section 2.5 (the use of inter-linking grids is based on concepts proposed by de Wet, 1996). The impact of the technology areas on the desired product features is then ranked. The two analysis grids link together, and provide a means of relating the impact of technology to product features and market / business drivers, connecting the various levels of the roadmap. Workshop 4: Roadmapping Workshops 1-3 enable a simple framework for linking the three levels of the roadmap to be developed, together with a 'language' for supporting the construction of the roadmap (i.e. the categories that define the analysis grids - see Fig. 5). Attempting to develop a roadmap without the structure that is provided by the analysis grids is difficult. Workshop 4 draws the marketing and technology strands together to produce the first roadmap. The format of the TRM is defined, in terms of time scales, levels, and product strategy (e.g. platforms). Key milestones are identified, product evolution plotted, and technological programmes identified, together with linkages between the roadmap levels, bearing in mind the prioritised market drivers, high impact product features, and most attractive technological solutions. -7-
  8. 8. Implementation issues Implementation issues are considered at the end of the TRM start-up process, in terms of identifying gaps in market, product and technology knowledge, together with assessing how best to implement a complete roadmapping process in the company. The process should be appropriate to the particular company context, in terms of needs and circumstances. Success factors and barriers to success are considered, and 'next steps' identified. 5. Application results To assess the effectiveness of each application and in order to improve the process, the success of the process is reviewed at the end of Workshop 4 and after six months. Assessment The review after Workshop 4 incorporates participant and facilitator views by means of questionnaires, which assess process effectiveness in terms of three key parameters: • Usefulness: how well did the application meet the stated objectives? • Functionality: how well did the application meet the generic aims of the TRM start-up process? • Usability: how simple was the process to follow, how well was the process facilitated, and was the mix of workshop participants appropriate? These parameters are scored (on a scale of 1-5), based on a number of questions - see Table 2 for aggregate results. Note, the first two applications were not scored, as they were exploratory in nature. Table 2 - TRM start-up process assessment # Usefulness Functionality Usability Selected comments 3 3.8 3.9 4.2 • Helped to effectively communicate the various ' visions' of the industry from management, marketing and technology groups. • Worked well as an introduction to the process, but more focused company- wide inputs will be needed to implement the approach. • The process reduced the complexity into simple, less complex steps. • Workshops 1, 2 & 3 were effective; workshop 4 lost focus and we agreed a different approach. • Insufficient time to discuss important issues. 4 3.4 3.1 2.9 • The process focused on the challenges ahead of us. • We were not sufficiently prepared. • Insufficient time to discuss important issues. • Much of the discussion was useful, despite appearing to be confused. • Insufficient sales / marketing input. • The process helps to clarify 'gaps' in our product range and knowledge. In each company a plan was devised to take the TRM process forward, in the context of company requirements and the strategic planning processes within the business. Evidence of medium to long term change in the organisation will be sought as part of an overall assessment of the success of the TRM start-up application. This will be assessed by interview after six months. -8-
  9. 9. Process improvement The comments and scores are reviewed after each application. It can be seen that application #3 was more successful on all scores than application #4, and this is attributed to the unit of analysis being more clearly defined. In application #3, where the business units were structured around specific product types, each serving clearly identified market areas, the focus for the TRM start- up process related directly to each business unit and the related product. In application #4, the selected product / market area was not sufficiently focused, which resulted in some confusion during workshop 4 and less satisfactory outputs. This is a key learning point for the process and will be included in the facilitation guidance. Other areas for process refinement include the grouping of brainstormed options and the ranking/prioritisation of product and technology options. 6. Summary and conclusions Technology roadmapping is a technique that enables technology investment to be linked to future product development and market requirements. There are examples of how this approach has been used successfully in industry, although the initial implementation and ongoing application of the method represents a challenge. The paper describes a process to support the rapid start-up of technology roadmapping in firms. The approach has been developed by four applications within three companies, using a ‘procedural action research' methodology. Each application of the method provides an opportunity for improving and refining the process, with the aim of capturing the experience gained in the form of a practical 'how-to' workbook. In terms of process improvement during the development applications, the key issues with roadmapping have related to the importance of clearly defining the unit of analysis and the need more detailed facilitation guidance. This work can now proceed to the testing and validating stages. Testing within a wider range of companies will take place over the next year to give a contingent framework. Working with the TRM technique is illuminating the domain of technology planning. Due to the structural similarity of the proposed technology planning framework and the technology roadmap, a dynamic method of reflecting upon the framework is provided. Further work planned includes ongoing validation against existing models of technology strategy and investigating and documenting mechanisms for knowledge flow. 7. References • Andreasen, M.M. and Hein, L. (1987), Integrated product development, Springer-Verlag / IFS Ltd. (UK). • Barker, D. and Smith, D.J.H. (1995), 'Technology foresight using roadmaps', Long Range Planning, 28(2), pp. 21-28. • Chai, K.H., Shi, Y.J. and Gregory, M.J. (1999), 'Bridging islands of knowledge: a framework of knowledge sharing in international manufacturing networks', 6th European Operations Management Annual Conference, Venice, 7-8th June. • Cooper, R.G., Edgett, S.J. and Kleinschmidt, E.J. (1998), Portfolio management for new products, Addison-Wesley, Reading, Massachusetts. -9-
  10. 10. • de Wet, G. (1996), Corporate strategy and technology management: creating the interface, Proc. 5th Int. Conf. in Mng. of Tech., Miami, Jan/Feb 1996, pp. 510-518. • EIRMA (1997), 'Technology roadmapping: delivering business vision', European Industrial Research Association, Paris. • Floyd, C. (1997), Managing technology for corporate success, Gower, Aldershot. • Grant, R.M. (1991), 'The resourced-based theory of competitive advantage: implications for strategy formulation', California Management Review, Spring, pp. 114-135. • Gregory, M.J. (1995), Technology management: a process approach, Proc. Instn. Mech. Engrs., 209, pp. 347-356. • Groenveld, P. (1997), 'Roadmapping integrates business and technology', Research- Technology Management, 40(5), pp. 48-55. • Hamel, G. and Prahalad, C.K. (1994), Competing for the future, Harvard Business School Press, Boston. • Hartmann, M.H. (1999), Theory and practice of technological corporate assessment, Int. J. Technology Management, 17(4), pp. 504-521. • Kline, S.J.(1991), Styles of Innovation and Their Cultural Basis, Chemtech, Vol.21, No.8, August. • Martinich, J.S. (1997), Production and operations management - an applied modern approach, John Wiley & Sons, New York, pp. 228-231. • Maslen, R. and Lewis, M.A. (1994), 'Procedural action research', Proceedings of the British Academy of Management Conference, Lancaster University, UK, September 1994. • Matthews, W.H. (1992), 'Conceptual framework for integrating technology into business strategy', Int. J. of Vehicle Design, 13(5/6), pp. 524-532. • Metz, P.D. (1996), 'Integrating technology planning with business planning', Research- Technology Management, 39(3), pp. 19-22. • Mintzberg, H. (1994), The rise and fall of strategic planning, The Free Press, New York. • Nonaka, I. (1991), 'The knowledge-creating company', Harvard Business Review, November-December, pp. 96-104. • Platts, K.W. (1993), 'A process approach to researching manufacturing strategy', Int. J. Operations & Production Management, 13(8), pp. 4-17. • Porter, M. (1985), Competitive advantage - creating and sustaining superior performance, The Free Press. • Steele, L.W., 1989, Managing technology - the strategic view, McGraw-Hill, New York. • Strauss, J., Radnor, M. and Peterson, J. (1998), ‘Plotting and navigating a non-linear roadmap: knowledge-based roadmapping for emerging and dynamic environments’, Given at East Asian Conference on Knowledge Creation Management in Singapore, March 1998, for The Asian-Pacific Journal of Management. • Teece, D.J., Pisano, G. and Shuen, A. (1997), 'Dynamic capabilities and strategic management', Strategic Management Journal, 18 (7), pp. 509-533. • Twiss, B. (1986), Managing Technological Innovation, 3rd ed. Pitman Publishing. • Whipp, R., 1991, 'Managing technological changes: opportunities and pitfalls', Int. J. of Vehicle Design, 12 (5/6), pp. 469-477. • Willyard, C.H. and McClees, C.W. (1987), 'Motorola's technology roadmap process', Research Management, Sept.-Oct., pp. 13-19. - 10 -
  11. 11. Author Bio-sketches Dr. Rob Phaal joined the Centre for Technology Management at Cambridge University in 1997, and is currently engaged in a research programme to investigate strategic technology management issues in manufacturing organisations. The particular focus of the research project is how to link technology resources to company objectives, in order to develop a set of practical and well-founded tools to support technology strategy and planning initiatives in the firm. Rob has a background in mechanical engineering, consulting and contract research, having previously worked for The Welding Institute for six years. Clare Farrukh joined Cambridge University in 1995 as a researcher in the area of technology management, following six years as a process engineer with Ciba-Geigy. The particular focus of her current research is linking technology resources to company objectives and she is actively involved in co-ordinating the EPSRC Technology Management Network. David Probert pursued an industrial career with Marks and Spencer and Philips for 18 years before returning to Cambridge in 1991. His experience covers a wide range of industrial engineering and management disciplines in the UK and overseas. Now a lecturer in the Manufacturing and Management Division of Cambridge University Engineering Department, David's research interests include technology management and make versus buy decisions. - 11 -