Chapter 8. Emerging Technology Strategic Roadmap

Chapter 8. Emerging Technology Strategic Roadmap

"Perception is strong and sight weak. In strategy it is important to see distant things as if they were close and to take a distanced view of close things."

Miyamoto Musashi

Having outlined many emerging and disruptive technologies that could well be on your radar as future solutions, it's time to discuss an approach that the enterprise can take in order to best leverage these technologies and extract business value. A formalized process will help to keep the radar in motion and to institutionalize the process for moving enabling technologies from theory into practice and into solid business benefits. It forms an action plan or strategic roadmap for continuous radar operations detecting and responding with intelligence in terms of understanding the threats and opportunities and applying the best resources at the best leverage points. Radar makes an excellent analogy. It provides an early warning system for events on the horizon, giving the enterprise time to craft a strategic response and to either put up defenses or to launch a counterattack.

The term radar is an acronym for RAdio Detection And Ranging. Applied to the enterprise, a comparison can be drawn in terms of detecting emerging technologies and determining the timing of their impact in terms of when they should be leveraged. Additionally, conventional radars have to deal with background noise and have their threshold set to indicate legitimate targets whose signal is above the ambient noise level. The signal-to-noise ratio measures the strength of the true signal when compared to the background noise. A good signal-to-noise ratio means that targets can readily be identified. If the signal-to-noise ratio approaches the number "one" or lower, then it is often hard to discern true targets from false alarms due to background noise. A similar issue applies to the enterprise when implementing an emerging technology radar. The technology hype cycle can boost the noise levels for new technologies, leading to overinflated expectations and, in effect, false alarms or at least alarms that are too early to be effectively acted upon.

Continuing the analogy, a conventional radar is comprised of seven basic components: a power supply, synchronizer, display, transmitter, receiver, duplexer switch, and antenna. For the enterprise, the power supply relates to funding and executive buy-in. It drives the entire device. The synchronizer relates to the timing and frequency of radar activities, i.e., how often the signal is sent out and how often it is interpreted. The transmitter, receiver, and duplexer relate to the information-gathering processes, i.e. collaborative discussions for information acquisition via internal and external sources. The antenna relates to the strategic direction in which the technology radar is pointed, i.e., knowing which software categories to focus on and to listen for. Finally, the display relates to the actionable information and work products that are the output of the entire radar process for business leaders to react to and refine their business strategies. Figure 8-1 shows this radar analogy in terms of these seven basic components. The enterprise equivalent is shown in the parentheses below each component.

Figure 8-1. Basic Components in Radar Analogy for Emerging and Disruptive Technologies. Source: Adapted from Federation of American Scientists, Military Analysis Network.

The basic steps for setting this emerging technology direction are to establish the radar process, to understand how to operate the radar, to prioritize detected events, to take appropriate actions, and to constantly monitor results. Translating this approach for the enterprise yields several action items. Even if you have some form of radar already in place, it's worth continually monitoring its performance and tuning as necessary. Particular emphasis should be placed on extending the radar to look out further for emerging and disruptive technologies.

Venture capitalists, software companies, and high-tech companies tend to have well-tuned radars since it is part of their business to be ahead of the curve. Budgets for research and development can be extremely high in the software and high-tech sector since keeping ahead of the competition is the only way to ensure survival. For example, according to the MIT Technology Review's Corporate R&D Scorecard 2001, spending on R&D as a percentage of revenue for the software sector ranged from 10 to nearly 30 percent for some of the highest ranked R&D spenders, including Microsoft, Oracle, and SAP. Microsoft's R&D budget was close to $4 billion during that period. In terms of percentage of revenues, I2 and Electronic Arts were both close to 30 percent. Turning to the typical enterprise, even though companies invest heavily in R&D, they may not have a radar process in place to help detect enterprise software innovations that can be strategic to their business. Any existing radar process for detecting new enterprise software innovations may well be just a part-time, informal activity for several executives and not currently a formalized process. A lot of the traditional R&D budget is focused on developing new products, such as new semiconductor products and new pharmaceuticals, and bringing them to market, but not on bringing outside technologies into the enterprise to improve business operations. Additionally, as revenues show slower growth rates or even decline, many enterprises face cuts to their R&D budgets. R&D often needs to produce more innovation from less investment.

As the rest of the economy becomes ever more virtualized and increasingly starts to expose its business functions as software services over the next several years, the need for advanced radar systems specific to these areas increases substantially. The enterprises' products in terms of value creation will increasingly become manifested as software. Therefore more R&D budget needs to be directed toward virtual products as well as physical products and services. A manufacturing company may have physical products and a large R&D budget dedicated to bringing new products to market, but the war in terms of competitive advantage will be increasingly fought on the battlefield of business agility driven by software applications and processes.

Within the IT department, with more and more capital expenditure of the enterprise moving into information technology, a well-tuned radar can help to ensure that every dollar invested is focused on the right technologies for each business objective. It can also help to detect emerging technologies that can perform similar business functions as older technologies for less cost, in terms of development and ongoing maintenance, or to provide greater and more flexible output in terms of enterprise value for the same cost as the older technologies.