Technology management, which involves the planning, implementation and monitoring of the development and use of (new) technologies to create competitive advantages, is one of the most important steering tasks in R&D-heavy industries. Birgit Stelzer, a researcher at the Institute for Technology and Process Management at Ulm University, spoke to Guido Beyß about key aspects of technology management. We will document excerpts of the interview in three blog entries. The first entry will focus on a fundamental understanding of technology management, its integration into the company and its internal and external points of reference.
Mr Beyß, how do you define technology management?
Beyß: For me, technology management is defined by taking into account and finding a balance between different influencing factors, with customer wishes and demands on one side and technological trends and possibilities on the other. The key issue is to recognise the economic potential.
What is particularly important in this respect?
Beyß: In many cases, a breakthrough is reached by a skilful combination of existing technologies which creates something completely new. The iPhone is a very good example. iPhones are small computers which can be used to place phone calls. PCs have been around since the 1970s and mobile phones since the 1990s. So what was Apple’s key contribution? Apple recognised the potential of a new combination. It took two existing technologies, combined them with new developments, such as the touchscreen, and added a very attractive design and a dash of psychological marketing to create a product that captured the spirit of our time – even though the customers themselves had not yet caught up.What is the best way to integrate technology management in corporate structures? Should a decentralised approach be used, which gives responsibility to the individual business units, or is a centralised “corporate technology” structure better?
Beyß: That will depend on the individual company. For example, a car lamp producer will find it quite easy to centralize its technology management. In contrast, let’s look at a company which offers very different technologies for the food processing industry, such as heat exchangers, homogenisers and separators, brewery and milk-processing equipment and industrial cooling systems. Due to the large range of technologies, a decentralised approach makes more sense. However, a decentralised approach to technology management requires regular exchanges of knowledge between the business units. Even if the technologies are very different, they might always be useful for different business units. But these units will need to learn about them.
What do you regard as the key “interface” in terms of technology management?
Beyß: The key interface is, of course, the market or market trends. All parties involved need to watch the market closely in order to understand not only what customers currently need, but also what they will expect in the future. Sales and R&D will need to make particular – and joint – efforts. Sales will have to overcome their short-term view which focuses only on the next order. And R&D will need to go beyond simple technological possibilities or opportunities and focus on the contribution they can make to a marketable solution.It often happens that a company requires technologies that are not covered by its own portfolio to develop further. How should it deal with that?
Beyß: The management will need to play an important steering role and decide on “make or buy”. If developers tend to want to make everything themselves, the management will need to act and raise the question of whether the company is really well-suited for the task or whether it makes sense to use already existing technologies. The management will need to find a balance between quick solutions and a certain loss of control.
Once a company has decided to use an external technology, the next question will often be whether it should cooperate with or simply buy the company which has developed the technology. If a partner company has developed a technology with high economic potential, it may make sense to acquire it. Thus, the “make or buy” issue may quickly become an M&A issue. In the case of Apple and Samsung, this question probably did not arise.