TECHNOLOGY MANAGEMENT

Technology is a Greek word derived from the synthesis of two words: techne (meaning art) and logos (meaning logic or science). Technology means the art of logic or the art of scientific discipline. Formally, it has been defined as "a design for instrumental action that reduces the uncertainty in the cause-effect relationships involved in achieving a desired outcome". That is, technology encompasses both tangible products, such as the computer, and knowledge about processes and methods. In other words, technology as "the use of science-based knowledge to meet a need." technology as a bridge between science and new products." Technology draws heavily on scientific advances and the understanding gained through research and development. It then leverages this information to improve both the performance and overall usefulness of products, systems, and services. In the context of a business, technology has a wide range of potential effects on management:

Reduced costs of operations. For example, Dell Computer Corporation used technology to lower manufacturing and administrative costs, enabling the company to sell computers cheaper than most other vendors.

New product and new market creation. For example, Sony Corporation pioneered the technology of miniaturization to create a whole new class of portable consumer electronics (such as radios, cassette tape recorders, and CD players).

Adaptation to changes in scale and format. In the early part of the twentyfirst century, companies addressed how small devices such as cell phones, personal digital assistants (PDAs), and MP3 players could practically become, as well as how each product could support various features and functions. For example, cell phones began to support email, web browsing, text messaging, and even picture taking as well as phone calls.

Improved customer service. The sophisticated package-tracking system developed by Federal Express enables that company to locate a shipment while in

transit and report its status to the customer. With the development of the World Wide Web, customers can find the location of their shipments without even talking to a Federal Express employee.

Reorganized administrative operations. For example, the banking industry has reduced the cost of serving its customers by using technologies such as automated teller machines, toll-free call centers, and the Web... This reduction in cost could be attributed primarily to reduction the amount of labor involved, which had a profound effect on employment and labor-management relations in banking.

TECHNOLOGY AND INNOVATION

Technological change is a combination of two activities invention and innovation. Invention is the development of a new idea that has useful applications. Innovation is a more complex term, referring to how an invention is brought into commercial usage. The distinction between the two is very important. As an example, Henry Ford did not invent the automobile; companies in Europe such as Daimler were producing cars well before Ford founded his company. Henry Ford instead focused on the innovation of automobiles, creating a method (mass production) by which cars could be manufactured and distributed cheaply to a large number of customers.

Technology life-cycle (TLC):It describes the commercial gain of a product through the expense of research and development phase, and the financial return during its "vital life". Some technologies, such as steel, paper or cement manufacturing, have a long lifespan (with minor variations in technology incorporated with time) whilst in other cases, such as electronic or pharmaceutical products, the lifespan may be quite short. The technology life cycle is concerned with the time and cost of developing the technology, the timeline of recovering cost and modes of making the technology yield a profit proportionate to the costs and risks involved. The TLC may, further, be protected during its cycle with patents and trademark seeking to lengthen the cycle and to maximize the profit from it.

The 'product' of the technology may just be a commodity such as the polyethylene plastic or a sophisticated product like the ICs used in a smart phone. The development of a competitive product or process can have a major effect on the lifespan of the technology, making it shorter.

The four phases of the technology life-cycle:2.1 Licensing in the R&D phase with licensing option 2.2 Licensing in the ascent phase with licensing option 2.3 Licensing in the maturity phase with licensing option 2.4 Licensing in the decline phase with licensing option

The four phases of the technology life-cycle The TLC may be seen as composed of four phases: (a) The research and development (R&D) phase (sometimes called the "bleeding edge") when incomes from inputs are negative and where the prospects of failure are high. (b) The ascent phase when out-of-pocket costs have been recovered and the technology begins to gather strength by going beyond some Point A on the TLC (sometimes called the "leading edge") (c) The maturity phase when gain is high and stable, the region, going into saturation, marked by M (d) The decline (or decay phase), after a Point D, of reducing fortunes and utility of the technology. Licensing options In current world trends, with TLCs shortening due to competition and rapid innovation, a technology becomes technically licensable at all points of the TLC, whereas earlier, it was licensed only when it was past its maturity stage.

Large corporations develop technology for their own benefit and not with the objective of licensing. The tendency to license out technology only appears when there is a threat to the life of the TLC (business gain) Licensing in the R&D phase There are always smaller firms (SMEs) who are inadequately situated to finance the development of innovative R&D in the post-research and early technology phases. By sharing incipient technology under certain conditions, substantial risk financing can come from third parties. This is a form of quasi-licensing which takes different formats. Even large corporates may not wish to bear all costs of development in areas of significant and high risk (e.g. aircraft development) and may seek means of spreading it to the stage that proof-of-concept is obtained. In the case of small and medium firms, entities such as venture capitalists ('angels'), can enter the scene and help to materialize technologies. Venture capitalists accept both the costs and uncertainties of R&D, and that of market acceptance, in reward for high returns when the technology proves itself. Apart from finance, they may provide networking, management and marketing support. Venture capital connotes financial as well as human capital. Large firms may opt for Joint R&D for the early phase of development. Such vehicles are called strategic alliances strategic partnerships. With both venture capital funding and strategic (research) alliances, when business gains begin to neutralize development costs (the TLC crosses the X-axis), the ownership of the technology starts to undergo change. Licensing in the ascent phase The ascent stage of the technology usually refers to some point above Point A in the TLC diagram but actually it commences when the R&D portion of the TLC curve inflects (only that the cashflow is negative and unremunerative to Point A). The ascent is the strongest phase of the TLC because it is here that the technology is superior to alternatives and can command premium profit or gain. The slope and duration of the ascent depends on competing technologies entering the domain, although they may not be as successful in that period. Strongly patented technology extends the duration period. Licensing in the maturity phase The maturity phase of the technology is a period of stable and remunerative income but its competitive viability can persist over the larger timeframe marked by its 'vital life'. However, there may be a tendency to license out the technology to a third-parties during

this stage to lower risk of decline in profitability (or competitive) and to expand financial opportunity. The exercise of this option is, generally, inferior to seeking participatory exploitation; in other words, engagement in joint venture, typically in regions where the technology would be in the ascent phase,as say, a developing country. In addition to providing financial opportunity it allows the technology-owner a degree of control over its use. Gain flows from the two streams of investment-based and royalty incomes. Further, the vital life of the technology is enhanced in such strategy. Licensing in the decline phase After reaching a point such as D, the earnings from the technology begin to decline rather rapidly. To prolong the life cycle, owners of technology might try to license it out at some point L when it can still be attractive to firms in other markets. This, then, traces the lengthening path, LL'. Further, since the decline is the result of competing rising technologies, licenses may be attracted to the general lower cost of the older technology (than what prevailed during its vital life). Licenses obtained in this phase are 'straight licenses'. They are free of direct control from the owner of the technology (as would otherwise apply,say, in the case of a jointventure). Further, there may be fewer restrictions placed on the licensee in the employment of the technology.

Technology Acquisition
It is the process of acquiring a new technology, new product, service, process by the efforts of an individual or by the organization or any other macro entity. Two types of acquisition: a) Internal acquisition:- it is the result of efforts that are initiated and controlled by the firm itself. It requires existence of technology capability in the firm. Steps involved in Internal acquisition process:i) Planning new product/ service to be offered ii) Screening new product/ service to be offered iii) Initiating development process iv) Carrying out trial production on small scale/ test marketing v) Improving design & production process vi) Commercialization b) External acquisition:- it is the process of acquiring the technology developed by others for use by the acquirer enterprise.

Steps involved in external acquisition process:i) Outsourcing ii) Strategic alliance iii) Collaborating research and development iv) Enterprise acquisition