Integrating technological innovation into business

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The impact of technology as a source of competitive advantage is more and more intensive. In order to realise such a competitive advantage, it is vital to understand both the specific technologies and the ways in which organisations can best manage technology.

2. Case study: The IT productivity paradox

In this case study UK banking industry experiences technological changes. However the introduction of new technology and automation system has not always ended with positive effect on productivity. Some banks have difficulties to adapt their organisation along with new technological changes. Some are just patching legacy system into new system with existing business practice maintained in order to avoid the uncertainty associated with learning curve of new system introduction. It is also noticed that a lack of support from the organisation in the areas of newly introduced system due to misalignment of technology and business strategy. [Block 7, The IT productivity paradox, p. 9]

Main technology management issues in this case study can be defined as follows.

Implementation of technology into products and processes.

Improving organisational effectiveness by aligning technology and business strategy.

Figure 1. Technology management in UK banking industry case

2.1 Implementation of technology into products and processes

There are always obstacles and challenges in implementing new technology. Resistance to change as described in the case study is a common example. It may take many forms, including active or passive, individual or organised. From my experience, it can be eased by involving people in the change process and giving some emotional support.

2.2 Improving organisational effectiveness by aligning technology and business strategy

Organizations that have been able to successfully integrate technology and business strategy have created significant business returns. [Bruce, 1998] Company officers that have aligned IT with business strategies argue that the integration was crucial to the firm's survival and its success. [Earl, 1994] The level of interaction between business and IT department plays a significant role on improving alignment issue.

3. Case study: Towards a new theory of innovation management

It is critical for such high-tech firms to develop innovative products and defend their competitive advantage. Therefore, it is important to have a good and efficient development process of innovative product.

In this case study innovation management of two companies, Canon and Apple, are discussed. It is noticed from both companies that the development leader tried to promote interactions between different development groups to facilitate innovation process. Meanwhile each company shows differences in management style. For example, more collective approach is taken by Japanese innovation leader and Steve Jobs of Apple is more military leadership style. It is also noted that the MC team of Canon is well integrated within company structure, however the Mac team of Apple experiences a lack of company-wide technology transfer and coordination. This has led to a loss of newly created knowledge and information from Apple as many development leaders left the company. [Block 7, Towards a new theory of innovation management, p. 10]

Main technology management issues in this case study can be defined as follows.

How to manage innovative project.

How to promote and motivate innovation in organisation.

Figure 2. Technology management in innovation

3.1 How to manage innovative project

It is always hard to draw new ideas and turn it into an innovative product. For such a high-tech product development, it is common to have issues related to many departments from design to manufacturing. As suggested in the case study, joint efforts by various involving parties can accelerate problem solving and even create a new concept on products that expands the limits of what was thought possible.

I think it is also important to consider organisational culture when involving interaction between groups. In my work place, there are product design teams and product test teams where most interactions are occurred during product development phase. However those teams have very different culture. [a] I think understanding cultural differences helps clearer communication and better cooperation.

3.2 How to promote and motivate innovation in organisation

Group leaders have used various methods to promote innovation in the case study such as informal off-site sessions and slogans. I think it is also important to create an environment supportive of innovative ideas. It is needed to have time, resources and collaboration with other organisation to realise such ideas.

It is a pity that the Mac team was more or less separated from the rest of the organisation and there was a lack of technology transfer and coordination between them. Eventual departure of the Mac team results in a loss of newly created information from Apple. I think knowledge acquired during innovative development is very valuable to the organisation; therefore this should be improved so that the firm can keep the newly-created innovative information and transmit throughout organisations.

4. Conclusion

Various technology management issues are discussed in the case study.

As a user of technology it is crucial to implement it into products and process. Many issues can be developed during the implementation phase. Further problems can be prevented by aligning technology and business strategy.

As a developer of technology it is essential to have innovative organisation. Many high-tech firms try to promote and motivate innovation in diverse ways. Keeping innovative information within the company and developing further by sharing with other organisations is also important.

In conclusion, technology management is the challenge of integrating technological changes as well as facilitating new technology development through innovation.

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The meaning of innovation

1. Introduction

Innovation can be described in many different ways, and there is not one acknowledged definition in use. However, the general understanding of innovation is pretty much the same, although the definitions differ slightly. Innovation, generally, refers to new products, processes or ideas that are put into use in the world.

2. Technical changes

Technical changes have always been important roles to business and organisational success. Three major types of technical change such as improvement, innovation and invention are introduced in the course material. According to [Block 1, p. 80], innovation is described as follows in the context of technical change.

Goal: Successful and profitable introduction of products processes or services.

Activity: Design for production and commercial exploitation

At first it was quite confusing to distinguish between innovation and invention, but generally Innovation is used to describe the renewal of design and function of the product, not the introduction of something totally new concept of the product.

One example of innovation is the iPod. According to the record [REF] the first mp3 players was created by Eiger Labs in 1997, so MP3 players had been around for several years before the iPod which has started in 2001. That means the iPod may have some unique hardware and software features of the device, the fundamental concept of mp3 player is not at all new. Therefore the different iPods implemented in terms of sizes, shapes and diverse functions can be considered as innovations based on the Eiger Labs's original idea.

The area of innovation can be expanded into much broader organisation level according to figure 2 of block 2. The drawing shows that innovation involves the whole processes of market research, prototype development, manufacturing development, production marketing and sales. This can be also seen in the case study of Canon, for example. The feasibility study team with people from R&D, production, marketing and product design was organised to conceptualise innovative product of Mini Copier. [Block 7, Towards a new theory of innovation management, p. 4]

3. Different perspectives

The meaning of innovation could also be interpreted in many different perspectives. For example, the meaning of innovation in figure 6 of block 1 is described within an organisational context. So everyone in an organisation contributes at least to some degree to the innovation process. On the other side innovation can also generate negative effects such as organisational resistances to change and lack of cooperation from employees. However, companies are forced to innovate if they want to keep their competitive advantage. As a consequence, a lot of firms do not hesitate to take risks to innovate

It is actually ambiguous for me where to set the boundary for innovation throughout the text in block 1 and 2. It is unclear whether innovation and improvement should be treated as a same group or category. Also several different terms of innovation based on the size of technical changes are used such as radical, incremental and improvement innovation [Figure 1, block 2] and that makes it difficult to have the meaning of innovation in a simple definition.

Incremental innovation exploits existing forms or technologies, whereas a radical innovation is something new to the world [Luecke, 2003]. However, it is difficult to distinguish a point of transition on the continuum between incremental and radical innovation; in contrast, an alternate classification is based on the perceived level of risk as described in Table 2 and SAQ 9 of block 2. If we compare these two kinds of innovation, we can find that incremental innovations normally take less time and generate less risk, so many companies prefer it.

However, incremental innovation cannot guarantee a company's sustainable competitive advantage in the future. For that reason, companies like to operate incremental innovations and radical innovations hand in hand, which is why radical innovations are generally followed by a period of incremental innovations.

Product innovation and process innovation are also introduced to characterise the occurrence of new or improved goods and services, and improvements in the ways to produce these goods and services. [Box 1, Block 2] However, distinctions between product and process innovation are not always clear because complications arise when considering that product and process innovations may be related (Kraft 1990), and that there are in fact, good arguments to suspect a quite significant interrelationship (Ewers et al. 1990). Product innovation can necessitate process innovations, and process innovation may enable product improvements.

From my work experience an innovation process aims to achieve substantial reductions in unit costs of production or service delivery. In many cases this is accomplished by integrating or eliminating separate process steps. [Luecke, 2003] To build a competitive advantage, companies need to build an innovative process which will reduce the manufacturing, delivery and service costs.

4. Conclusion

To sum up, innovation is to perform something in a new way. It can be the launch of an entirely new product, but it can just as well be the launch of an existing product in a new market, or using new production methods. Innovation does not have to involve a revolutionary invention; it is innovative as long as something is achieved in a new way. Another important aspect in the definition of innovation is that it should produce an economical value.

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A system to successfully exploit new ideas

Figure 3. System map for innovation

New ideas for innovation can be developed from either internal environment or external environment. To keep up with new ideas it is needed to have a monitor system for scanning. In my organisation the external environment is best monitored by marketing department but no dedicated group exists to scan internal development which I think it is one of weak point.

Then when an innovative idea for the product is unfold, the feasibility of new idea has to be checked. The proposal should be realisable with technology and process known. If not, it will be screened out in the review process. If everything is alright, then the product description is created and moves on to product development phase.

Development process may be performed by a cross-functional team consists of experts in different fields who have knowledge of process technology, production processes, requirements which a product needs to meet, on methodology of product implementation.

During the development phase the team members usually confronts problems or are in need of some new ideas. In this case brainstorming sessions are quite a useful process. The ideas developed during the sessions can be tried out and the result can be analysed. If the results are satisfactory, then the solution is found, problem-solved.

Time to market is equally important as innovative product in this competitive world, therefore development process must be carefully planned, managed and reviewed. A review process is where all the information is confronted by the whole team and any errors or problems that may arise will be found and discussed.

People often set ambitious plans for innovative product but usually face the important problem of allocating resources between projects and that's why I have resource management in the system.

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Key performance indicators that can be used to assess the success of an organization's innovation system

From the system map above I have identified three major points in the innovation process. Firstly, innovative ideas should be well scanned, collected and verified. Secondly, it is important to have creative but also efficient implementation cycle in the process. Finally, products will be sold in the market and evaluated with feedbacks that could trigger a new cycle of innovation.

Based on my findings I would like to suggest three KPIs to access the efficiency of the innovation process as follows.

% of ideas submitted within the organisation that were officially implemented.

Time to market of new innovative products or services: The time that takes from the time a product is defined to the time it is released to the market.

% of sales from new innovative products or services.

I have assumed commercial organisations for the suggestion. If it is for non-commercial organisations, I should probably put more stress on how it is perceived than how efficient the process is.

I have also assumed a product innovation for the suggestion. So if it is for a process innovation, outcome should be measured from the different perspective, for example process quality or processing time.

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