Innovation and Technology Management
Joseph J. SimpsonJuly 31, 2002
© 2002 Joseph J. Simpson
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Innovation and Technology Management
Present a systematic approach to innovation and technology management using a generic systems engineering process.
Discuss differences between incremental and disruptive technologies.
Evaluate open source software technology as a disruptive technology.
Goals
© 2002 Joseph J. Simpson
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Innovation and Technology Management
Define Terms
Outline FRAT Process
Discuss:
Organization Research & Development Function
Product System Innovation
Environment System Innovation
New Technology Development and Innovation
Summary and Conclusions:The product and the product production process should be combined for evaluation -from both an innovation and a management perspective.
Overview
© 2002 Joseph J. Simpson
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Innovation and Technology Management
Define Terms
© 2002 Joseph J. Simpson
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Innovation and Technology Management
Technology:
“… the skill, knowledge, experience, body of scientific knowledge, tools, machines, computers, and equipment that are used in the design, production, and distribution of goods and services.”
Innovation:
“… the application of technological change to products and organizations.”
Define Terms
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Innovation and Technology Management
Constraints - External Environment
Functional Analysis,Requirements
Alternatives, Solution
Verification, Validation
Define problemWhat is the problem?Who needs to have it fixed?Why does it need to be fixed?
Determine WHAT is needed to fix problem What has to be done?How well does it have to be done?
Decide HOW to fix the problemWhat are various ways to do it?What way will you use to fix the problem, why?When done, is the original problem fixed?Has the best way been used to fix the problem?
Solve problem; provide solution to customer
A Problem Solving Meta Process
INPUTINPUTINPUT
WHATWHATWHAT
HOWHOWHOW
OUTPUTOUTPUTOUTPUT
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Innovation and Technology Management
Problem Statement
WHAT
TradableDerived
Requirements
HOW
INPUTConstraints
From ExternalEnvironment
OUTPUTSolutions /
SystemComplete
TestValidate/Verify
FunctionalAnalysis
AlternativesSolution /
Architecture
Meta Process in SE Notional Format
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Innovation and Technology Management
Architecture
A1 A2 A3
Architecture View
Requirement
R1 R2 R3
Requirement View
Test
T1 T2 T3
Test View
Function
F1 F2 F3
Function View
Any system must be expressed in four views
FRAT - System Views*
* Mar & Morais
© 2002 Joseph J. Simpson
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Innovation and Technology Management
Outline FRAT
Process
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Innovation and Technology ManagementThe FRAT
Process Engine*
Constraints
DefineMission Needs
Define FunctionsThat Meet Needs
DefineRequirements
DevelopAlternatives
Regulators
CustomerReviews& Audits
Customer
Developer
Developer Goals &Objectives
Customer &Stakeholders
Customer &Developer
System Description generated for this level forms the Mission for the next level
SelectSolution
V & V
Developer
Developer
DevelopDecisionCriteria
* “FRAT – A Basic Framework for Systems Engineering,” Mar & Morais
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Innovation and Technology ManagementFRAT Concepts
EnvironmentSystem
ProductSystem Organizational
Process System
Architecture
A1 A2 A3
Architecture View
Requirement
R1 R2 R3
Requirement View
Test
T1 T2 T3
Test View
Function
F1 F2 F3
Function View
FRAT System Views
Any system must be expressed in four views
Architecture
A1 A2 A3
Architecture View
Requirement
R1 R2 R3
Requirement View
Test
T1 T2 T3
Test View
Function
F1 F2 F3
Function View
FRAT System Views
Any system must be expressed in four views
Architecture
A1 A2 A3
Architecture View
Requirement
R1 R2 R3
Requirement View
Test
T1 T2 T3
Test View
Function
F1 F2 F3
Function View
FRAT System Views
Any system must be expressed in four views
© 2002 Joseph J. Simpson
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Innovation and Technology ManagementValue Network
EnterpriseSystem
EnvironmentSystem
Enterprise A
Enterprise F
Enterprise B
Enterprise D
Enterprise E
Enterprise C
Consumes ResourcesProvides Product
Product System Process System
Constraints
DefineMission Needs
Define FunctionsThat Meet Needs
DefineRequirements
DevelopAlternatives
Goals &Objectives
SelectSolution
V & V
DevelopDecisionCriteria
Constraints
DefineMission Needs
Define FunctionsThat Meet Needs
DefineRequirements
DevelopAlternatives
Goals &Objectives
SelectSolution
V & V
DevelopDecisionCriteria
Constraints
DefineMission Needs
Define FunctionsThat Meet Needs
DefineRequirements
DevelopAlternatives
Goals &Objectives
SelectSolution
V & V
DevelopDecisionCriteria
Constraints
DefineMission Needs
Define FunctionsThat Meet Needs
DefineRequirements
DevelopAlternatives
Goals &Objectives
SelectSolution
V & V
DevelopDecisionCriteria
Constraints
DefineMission Needs
Define FunctionsThat Meet Needs
DefineRequirements
DevelopAlternatives
Goals &Objectives
SelectSolution
V & V
DevelopDecisionCriteria
Constraints
DefineMission Needs
Define FunctionsThat Meet Needs
DefineRequirements
DevelopAlternatives
Goals &Objectives
SelectSolution
V & V
DevelopDecisionCriteria
Generic Enterprise is Composed of
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Innovation and Technology ManagementProduct Architecture
ComputerSystem
Motherboard CPUCase
ProcessingUnit
PowerSupply I/O Cards Disk
Drives
Software Peripherals
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Innovation and Technology ManagementOrganizational Architecture
Prod
uct T
eam
Man
ager
s
Engineering Sales &Marketing
ProductDesign
Research &Development Manufacturing
FunctionalManagers
ProductTeam A
ProductTeam B
ProductTeam C
ProductTeam D
CEO
Two-boss employee Product Teams
Adapted from Contemporary Management, GR Jones, JM George, CWL Hill, 2000
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Innovation and Technology Management
A. Organizational System -
Research and Development
Approach
ProductArchitecture
Organizational Architecture
ComputerSystem
Motherboard CPUCase
ProcessingUnit
PowerSupply I/O Cards Disk
Drives
Software Peripherals
Engineering Sales &Marketing
ProductDesign
Research &Development
Manu-facturing
FunctionalManagers
ProductTeam A
ProductTeam B
ProductTeam C
ProductTeam D
CEO
Two-boss employee Product TeamsPr
oduc
t Tea
mM
anag
ers
Generic Enterprise Architecture
The Smart Organization, creating value through strategic R&D, by Matheson, David and
Matheson, Jim addresses
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Innovation and Technology Management
1. Maintain a value creation culture2. Develop decision alternatives3. Commitment to continual
learning4. Embrace uncertainty5. Maintain an outside-in
perspective6. Use systems thinking7. Ensure open information flow8. Achieve alignment and
empowerment9. Institute disciplined decision-
making
Organizational Principles for R&D
The Process Flowfor Each Level
Constraints
DefineMission Needs
Define FunctionsThat Meet Needs
DefineRequirements
DevelopAlternatives
Regulators
CustomerReviews& Audits
Customer
Developer
Developer Goals &Objectives
Customer &Stakeholders
Customer &Developer
System Description generated for this level forms the Mission for the next level
Innovation and Technology Management
SelectSolution
V & V
Developer
Developer
DevelopDecisionCriteria
Organizational System Functions & Reqts
The principles cluster aroundthe functions and
requirements areaswithin the process flow
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Innovation and Technology ManagementDecisionQuality*
50100
Creative, Doable
Alternative
Meaningful, Reliable Information
Clear Valuesand Trade-Offs
Logically Correct
Reasoning
Commitmentto Action
Appropriate Frame
Decision ADecision B
0
* The Smart Organization, creating value through strategic R&D, Matheson and Matheson
© 2002 Joseph J. Simpson
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Innovation and Technology Management
The Process Flowfor Each Level
Constraints
DefineMission Needs
Define FunctionsThat Meet Needs
DefineRequirements
DevelopAlternatives
Regulators
CustomerReviews& Audits
Customer
Developer
Developer Goals &Objectives
Customer &Stakeholders
Customer &Developer
System Description generated for this level forms the Mission for the next level
Innovation and Technology Management
SelectSolution
V & V
Developer
Developer
DevelopDecisionCriteria
Organizational Decision Quality
The decisions cluster aroundthe goals, objectives and
decision criteria withinthe process flow
These decision quality metrics are applied primarily to the research and development function of the enterprise
© 2002 Joseph J. Simpson
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Innovation and Technology ManagementDecisionQuality*
50100
Creative, Doable
Alternative
Meaningful, Reliable Information
Clear Valuesand Trade-Offs
Logically Correct
Reasoning
Commitmentto Action
Appropriate Frame
Decision ADecision B
0
* The Smart Organization, creating value through strategic R&D, Matheson and Matheson
© 2002 Joseph J. Simpson
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Innovation and Technology Management
B. Product System
Innovation Management
ProductArchitecture
Organizational Architecture
ComputerSystem
Motherboard CPUCase
ProcessingUnit
PowerSupply I/O Cards Disk
Drives
Software Peripherals
Engineering Sales &Marketing
ProductDesign
Research &Development
Manu-facturing
FunctionalManagers
ProductTeam A
ProductTeam B
ProductTeam C
ProductTeam D
CEO
Two-boss employee Product TeamsPr
oduc
t Tea
mM
anag
ers
Generic Enterprise Architecture
The Innovators Dilemma by Clayton M. Christensen addresses
© 2002 Joseph J. Simpson
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Innovation and Technology Management
Established companies lead in the incorporation of incremental technology into their products, almost 100 percent of the time.
Disruptive technology is not often successfully deployed by market leading firms.
Example Product Systems That Incorporated Both Types• Steel Milling and Production• Mechanical Excavator• Disk Drive• Motorcycle
Open Source Software is offered as a recent example of a disruptive technology
Two Technology Types: Incremental / Disruptive*
* The Innovators Dilemma by Clayton M. Christensen
© 2002 Joseph J. Simpson
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Innovation and Technology Management
The innovation enables less-skilled or less-wealthy customers to do for themselves things that only the wealthy or skilled intermediaries could previously do
The innovation targets customers at the low end of a market who don’t need all of the functionality of current products; the business model enables the disruptive innovator to earn attractive returns at discount pricesunattractive to the incumbents
Disruptive Technology Characteristics
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Innovation and Technology Management
• Free distribution of source code
• Ability to modify code and redistribute
• Ability for anyone to participate
• Product freely available on internet
• Provide basis for new business models
• Encourages rapid code improvement
• Serves the needs of many customers
Open Source Disruptors
Product System Values & Distribution Rights
The Process Flowfor Each Level
Constraints
DefineMission Needs
Define FunctionsThat Meet Needs
DefineRequirements
DevelopAlternatives
Regulators
CustomerReviews& Audits
Customer
Developer
Developer Goals &Objectives
Customer &Stakeholders
Customer &Developer
System Description generated for this level forms the Mission for the next level
Innovation and Technology Management
SelectSolution
V & V
Developer
Developer
DevelopDecisionCriteria
The disruptors cluster around the goals, objectives,
decision values &criteria within the
process flow
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Innovation and Technology Management
C. Environment
System Innovation
Management
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Innovation and Technology ManagementThe System Boundary
Constraints
DefineMission Needs
Define FunctionsThat Meet Needs
DefineRequirements
DevelopAlternatives
Regulators
CustomerReviews& Audits
Customer
Developer
Developer Goals &Objectives
Customer &Stakeholders
Customer &Developer
System Description generated for this level forms the Mission for the next level
SelectSolution
V & V
Developer
Developer
DevelopDecisionCriteria
* “FRAT – A Basic Framework for Systems Engineering,” Mar & Morais
© 2002 Joseph J. Simpson
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Innovation and Technology ManagementDisruptive Network: No Common Customers
EnterpriseSystem
EnvironmentSystem
Enterprise A
Enterprise F
Enterprise B
Enterprise D
Enterprise E
Enterprise C
Consumes ResourcesProvides Product
Enterprise 1
Enterprise 2
© 2002 Joseph J. Simpson
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Innovation and Technology ManagementDisruptive Network: Some Common Customers
EnterpriseSystem
EnvironmentSystem
Enterprise A
Enterprise F
Enterprise B
Enterprise D
Enterprise E
Enterprise C
Consumes ResourcesProvides Product
Enterprise 1
Enterprise 2
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Innovation and Technology ManagementDisruptive Network: Some Common Customers
EnterpriseSystem
EnvironmentSystem
Enterprise A
Enterprise F
Enterprise B
Enterprise D
Enterprise E
Enterprise C
Consumes ResourcesProvides Product
Enterprise 1
Enterprise 2
© 2002 Joseph J. Simpson
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Innovation and Technology ManagementDisruptive Network: Some Common Customers
EnterpriseSystem
EnvironmentSystem
Enterprise A
Enterprise F
Enterprise B
Enterprise D
Enterprise E
Enterprise C
Consumes ResourcesProvides Product
Enterprise 1
Enterprise 2
© 2002 Joseph J. Simpson
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Innovation and Technology ManagementDisruptive Network: All Disruptive Customers
EnterpriseSystem
EnvironmentSystem
Enterprise A
Enterprise F
Enterprise B
Enterprise D
Enterprise E
Enterprise C
Consumes ResourcesProvides Product
Enterprise 1
Enterprise 2
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Innovation and Technology Management
New Technology Development and
Innovation Management
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Innovation and Technology Management
Research by Sampathkumar, Clausing, Schultz and Fricke clearly separated technology development from product development
Three independent concurrent activities frame innovation• Incremental development of new technology• Incremental development of new applications• Incremental development of new products
Radical technology innovation is introduced in the technology stream and can either be used (1) to continue technology development, or (2) to create a radically new application area. The new application area can generate radically new products.
Role of New Technology Developmentin New Product Development
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Innovation and Technology ManagementThe Flow of Innovation*
Technology Stream
Application Stream
Product Stream
t
Product(System)
Incremental(sustaining)
Incremental(sustaining)
Fundamentallynew (radical)New
Technology
Fundamentallynew (radical)
Application
Alternatively Alternatively
* Adapted from Sampathkumar, et.al.
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Innovation and Technology Management
Measures for Technology “Newness”• Functional structure and logic• Physics used to implement new function
Measures for Technology Application “Newness”• Unanticipated benefits• Required amount of learning
If the main product function uses a new technology, and the performance characteristics are different, then this is deemed aradically new technology application.
“Newness” and Radically New Application
* Sampathkumar, et.al.
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Innovation and Technology Management
Open Source Software Technology Evaluation• Function and logic are the same as closed source technology• Physics are the same as closed source technology• Anticipated benefits are great• Required amount of learning and operational change is small.
Given this “product evaluation,” open source software may not be a radical new disruptive technology. When the process system thatdevelops the software is evaluated, then the disruptive nature of open source technology can be clearly determined.
Both the product system and the process system innovation activities associated with open source software need to be evaluated to completely understand the disruptive nature of these products
Open Source Software
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Innovation and Technology ManagementThe Flow of Innovation*
Open Source Software (IBM)Technology
StreamApplication
StreamProduct Stream
t
Product(System)
Incremental(sustaining)
Incremental(sustaining)
Fundamentallynew (radical)New
Technology
Fundamentallynew (radical)
Application
Alternatively Alternatively
Services
Hardware
Software
Services
Hardware
Software
Services
Hardware
Software
© 2002 Joseph J. Simpson
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Innovation and Technology ManagementThe Flow of Innovation*
Open Source Software (Sun)Technology
StreamApplication
StreamProduct Stream
t
Product(System)
Incremental(sustaining)
Incremental(sustaining)
Fundamentallynew (radical)New
Technology
Fundamentallynew (radical)
Application
Alternatively Alternatively
Hardware
SoftwareHardware
SoftwareHardware
Software
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Innovation and Technology ManagementThe Flow of Innovation*
Open Source Software (MS)Technology
StreamApplication
StreamProduct Stream
t
Product(System)
Incremental(sustaining)
Incremental(sustaining)
Fundamentallynew (radical)New
Technology
Fundamentallynew (radical)
Application
Alternatively Alternatively
SoftwareSoftwareSoftware
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Innovation and Technology Management
Summary and
Conclusions
© 2002 Joseph J. Simpson
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Innovation and Technology Management
Innovation and technology management requires a combined coherent focus on both the product and the process that develops the product.
Systems engineering processes and principles provide a logical framework for evaluation and management of innovation and technology of all types.
The product and the product production process should be combined - from both an innovation and a management perspective. Process innovation is as important as product innovation in the open source software domain.
Summary and Conclusions
Disruptive technologies provide great advantages to an enterprise.