Technology strategy for the enterprise

Technology strategy for the enterprise

Organising technology at the enterprise level is part of corporate planning function and is a continuous process. This can be divided into the following three streams :

a. Replacement of obsolete technologies with newer ones; and continuous modernization of existing technologies for improving productivity and competitiveness.
b. Development and introduction of new products with a view to Diversify.
c. Setting up of new units.

While having certain common components, the above three streams have certain operational differerences and therefore need to be dealt with separately. However, the first step to technology status and the forecasting of technology needs, keeping in view the technology trends (domestic and global) and to the changing market in order to better satisfy the consumer expectations. While defining strategy, the time frame of technology cycle and its impact needs the maximum attention. Further, technology should be identified not only in term of machines but also products and processes to achieve the desired end product and level of productivity. This can be clarified by comparing core industries like Cement and Steel with fast track Electronics industry. While in the first case changes in the machines and processes take place without consumer getting the feel of it, in case of electronics and consumer products, the product range changes have an impact on consumer because he gets involved in it.

Further, a company engaged in the manufacture of consumer electronic products has very little time at its disposal to bridge the gap and keep pace with changes, but a company making cement or steel could go in a systematic manner to improve its state of technology and simultaneously meet the requirements of employment policies and marketing distribution system in the country in order to satisfy the consumer needs effectively.

The questions of technological obsolescence, time cycle and scale of operations are more relevant today than they were ever before. It is because of the increased pace of technological developments, emerging intense competition and stepping of electronics in almost all industries—be it automobile, telecommunication, aviation, cement or mineral industries where use of micro—processor has now become more a necessity than fashion—that the concepts of scale or size of production have assumed increasing importance. India is passing through transition phase where we have technologies varying from bullock cart to A-320 aircraft. Appropriate technology for each industrial segment is thus the need of the hour and should be the objective of an enterprise. While we might like to introduce bio-engineering, super conductivity and jet engines in one go, the scale of operations and results achieved may or may not justify the same. Since technology strategy of the corporation has a long term impact, its appropriate choice in the context of the environment is very critical.

As indicated earlier, the technology strategy of an electronic consumer product company, for instanced, cannot be the same as that of Steel, Cement or other core industry. And within the same sector the technology strategy of a company will change depending upon whether its target is domestic, international or mixed market. For example the technology strategy of a 100% Export Oriented Unit (EOU) company has to the state-of-the art technology and also has to be backed up by the capability to quickly respond to the changes in accordance with the merging global situation. On the other hand the strategy of a core industry company will be governed by domestic needs and Government’s socio-economic policies.

Technological changes at the enterprise level should take cognizance of the following :
a) Country’s changing economic scenario
b) Changing cultural and living standards
c) Government policies including those with respect to import and export and their effect on cost.
d) Global changes taking place in the range of products affecting the economic scene and living standards
e) Intensity in competition
f) Economics and sociology of conservation and pollution control consciousness creamed as a result of Government policies and pressures.

Some of the typical products exemplifying the global or universal trends are the TV, Video, automotive and home appliances industries in which a sort of explosion in demand has taken place.
In these verindustries, grater computersation, control through remote instruments and miniaturization are the technological changes which are now taking place.

After the internal resources, customer needs; global technology and market trends have been evaluated, the next step is to precisely identify the gaps at the enterprise level. While quantitative methods an assist in the identification of emerging technologies and possible know-how gaps, an assessment based on the following can be of direct use for an existing set up (for new enterprises the more scientific methods may be necessary) :
• Feedback data on the performance of existing equipment and failure analysis report, comparing productivity, cost of production and quality vis-à-vis acceptable standards.
• Feedback data in basic product parameters vis-à-vis other competitors and keeping watch in their plans and activities.
• Technology scanning by product groups.
• Interaction with customers, foreign companies, consultancy organisations, institutions, etc.
• Mapping the international technological status through tendering, obtaining quotations, engaging foreign consultants and evaluation the same in terms of domestic/export environment for the enterprise.
• Clearly defining the technology life cycle of new products as a consequence of technological changes by means of cost benefit analysis and with reference to time frame for implementation.
• Energy conservation and pollution control policies and strategies.

The management of technology at the enterprise level requires that the technology management group should receive necessary inputs for formulation of possible technology options form the customers, business groups and other corporate agencies. Based on these inputs the Technology Management Group should identify gaps in technology and formulate possible new technology alternatives. Thus the specifications of the required new technology get firmed up as a first step. The plan of action to implement the strategy may include :

a) Resource analysis of the company in terms of availability of technological expertise, finances, skills and equipment.
b) Analysis of Customer (both current as also emerging) needs and the time frame of validity.
c) Analysis the global data regarding the state of art of the technology and the markets. Based on these inputs the Technology Group carries out an evaluation of available options and the cost benefit analysis to arrive are investment decision.
d) Identify the route : technology acquisition vs. in-house development.


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