Technology needs to be viewed from the function it delivers to a product or service which satisfies a market need. Technology can be leveraged by innovating on various business model elements
The first one was architecting innovation wherein I discussed how organisations can architect innovation portfolio for them to begin their innovation journey & stay on the course, its a plan that they would like to build on.
The second post talked about ‘sensing the consumer wave’ where I touched upon the customer side of innovation which is gleaned using several population behavioural trends. This effort saves a lot on the traditional market research.
This post takes a brief view of technology side of innovation. I would invite reader’s view to further my own learning on the subject.
Defining Technology
Let’s define technology in simple terms. Technology is nothing but practical application of science to commerce or industry. Therefore one route to innovation is when organisations marry technology with the user need.
Classifying Technologies
The technology world can be simply categorised into 3 parts physical, biological & digital. The last one provides a great interface between the first two.
Physical technologies deliver something tangible to us. Some of the key technologies of the future are autonomous vehicles, 3-D printing, robotics, new materials will redefine our lives and businesses in terms the way we travel, the way we produce & use, the way we process things & the way we design things.
Biological technologies will impact agricultural produce, health care and provide customisation in every sphere of biological world.
Digital technologies are connecting physical objects & humans and humans with humans in seamless way. Organisations use these technologies to give a new voice to their products and services.
Marrying Technology & Market Need with Business model
No technology can transform an industry unless a business model can link it to an emerging market need. Market need is a result of ‘jobs to be done’ by larger number of people, more about this in my next post. Simply put, anyone will hire your product or service because it helps him/her do a jobs that they are trying to get done more efficiently. Many of these jobs didn’t exist yesterday, but today with the advent of technology these hidden needs of ‘jobs to be done’ are driving growth of new businesses with the product & services they offer.
With transformative business models (Reference 1) technologies are linked to the market need to achieve success. Some key features of these business model ideas are
- Personalisation – I want what I want
- A closed-loop process – Recycling to reduce cost
- Asset sharing – Mitigating the risk of high investment in acquiring assets by a distributed asset ownership
- Usage-based pricing – I pay as I use
- A collaborative ecosystem – No single entity can manage & win, collaboration to deliver a product & service is key
- An agile and adaptive organization – less hierarchical decision making, allowing front line employees to analyze & decide according to market dynamics.
Following figure shows how organizations can match technology & market need by an innovative business model feature (the example here is just an illustration & there’re could be many ways of doing it). The key learning for strategist is to make a dashboard like this and continue mapping technologies and market need as they realize one & ideate to come up with a new business model
Criteria for selecting technologies
There are several factors in selecting technologies, these can broadly divided into 2 categories; industry factors, company factors. Let me touch upon them briefly
Industry Factors
These factors include the pace with which technology changes in a particular industry, so the decision between ‘make & buy’ becomes very obvious. Revenue potential of technology and cost of evaluation are other factors. For market ready products of technology the speed of revenue generating (first mover advantage) is usually high.
Organisational Factors
This depends mainly on 3 factors ;
Purpose to use technology which largely depends on the overall strategy of the firm which is based on mainly whether they want to enter new market, or counter disruption by enhancing existing products with the help of technolgy. The other factors that are considered are product development capability of the firm and the product portfolio that they have. The weaker the product development capability greater is the tendency to adopt to a market ready technology.
Conclusion
Technology needs to be viewed from the function it delivers to a product or service which satisfies a market need. Technology can be leveraged by innovating on various business model elements.
Thanks for your time. Let me have your inputs.
We help our clients with various intervention in their pursuit to innovate
Reference
1) HBR Oct 2016 : The Transformative Business Model by Stelios Kavadias, Kostas Ladas, and Christoph Loch
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