Technology roadmapping in review: A tool for making ... · Technology roadmapping in review: A tool...

Technological Forecasting & Social Change

71 (2004) 81–100

Technology roadmapping in review:

A tool for making sustainable new product

development decisions

Irene J. Petricka,*, Ann E. Echolsb,1

aSchool of Information Sciences and Technology, Penn State University,

University Park, PA 16802, USAbDepartment of Management and Organization, Penn State University,

University Park, PA 16802, USA

Accepted 29 April 2003

Abstract

Typically, firms decide whether or not to develop a new product based on their resources,

capabilities and the return on investment that the product is estimated to generate. We propose that

firms adopt a broader heuristic for making new product development choices. Our heuristic approach

requires moving beyond traditional finance-based thinking, and suggests that firms concentrate on

technological trajectories by combining technology roadmapping, information technology (IT) and

supply chain management to make more sustainable new product development decisions. Using the

proposed holistic heuristic methods, versus relying on traditional finance-based decision-making tools

(e.g., emphasizing net present value or internal rate of return projections), enables firms to plan beyond

the short-term and immediate set of technologies at hand. Our proposed heuristic approach enables

firms to forecast technologies and markets, and hence, new product priorities in the longer term.

Investments in new products should, as a result, generate returns over a longer period than traditionally

expected, giving firms more sustainable investments. New products are costly and need to have a

0040-1625/$ – see front matter D 2003 Elsevier Inc. All rights reserved.

doi:10.1016/S0040-1625(03)00064-7

* Corresponding author. Tel.: +1-814-863-7133.

E-mail addresses: [email protected] (I.J. Petrick), [email protected] (A.E. Echols).1 Tel.: +1-814-863-0642.

I.J. Petrick, A.E. Echols / Technological Forecasting & Social Change 71 (2004) 81–10082

durable presence in the market. Transaction costs and resources will be saved, as firms make new

product development decisions less frequently.

D 2003 Elsevier Inc. All rights reserved.

Keywords: Roadmapping; Technology choice; New product development; Investment risk; Supply chain

integration

1. Introduction

Few would argue that today’s globally connected economy, driven by Internet time,

requires a fleetness of foot that only a handful of firms possess [1,2]. As product systems

become more complex, and as new materials and information technology (IT) embedded in

products become more sophisticated, the expertise needed to successfully develop a new

product often lies in more than one firm [3,4]. What is needed is a change in the way that

suppliers and buyers interact with one another, including a more open information-sharing

network. This represents a significant departure from traditional supply chain management

practices and requires a new set of IT tools and systems to capture, link, and share

information across organizational boundaries.

In this paper, we present how firms can more confidently make new product development

decisions that focus on sustainable new product investments. The goal is to limit investment of

resources in a new technology that becomes obsolete in the short term. Firms need durable

investments that can sustain them in the midst of eras of technological discontinuities and

ferment (cf. Ref. [5]). Our heuristic method requires viewing supply chain management from a

new angle, combining supply chain resources with IT (which results in technology road-

mapping), and using the roadmapping tool to make superior technology investment choices.

We begin with an overview of technology development and innovation theory from an

evolutionary perspective to set the stage for the myriad of new product development decision

options, delineate our new product development focus for this paper, introduce our nontradi-

tional view of how supply chain management can be used, describe how combining our view of

supply chain management and IT results in a technology roadmapping tool, and finally, explain

how this tool can enable managers to make superior new product development decisions.

2. Technology development and innovation theory: an overview

The pace of technological change is increasing, and is expected to continue doing so in

exponential fashion [5]. The most widely used framework for describing technological

evolution is the punctuated equilibrium model [6–8]. This model describes technology

evolution as beginning with a radical new technology with competency-destroying qualities.

The radical innovation is tempered over time as it goes through refinement and product-

based/market-based reshaping during a period of ferment, culminating in a dominant design

(an industry standard), and then tapering into a stage of incremental process-based change (cf.

I.J. Petrick, A.E. Echols / Technological Forecasting & Social Change 71 (2004) 81–100 83

Refs. [9–12]). Initially, firms compete under intense conditions, as their ability to predict

which design will win is an uncertain process [13]. Once a ‘‘bandwagon’’ of firms, customers,

and suppliers, comprising the majority of users, lock-in a product design, it becomes known

as the dominant design [14]. Based on Arthur’s [15] increasing returns hypothesis, firms are

wise to produce the dominant design [13]. Firms are highly motivated to jump on the ‘‘right’’

bandwagon, as the strength of the support for a design should affect firm success [14,16,17].

After a dominant design is known, industry dynamics refocus around continuous improve-

ment and competence-enhancing technological discontinuities. Competency-enhancing inno-

vations are those that extend company requisites, while competency-destroying innovations

render the company’s current requisites obsolete [18]. Competency destroying innovations

are the ‘‘game changers’’ that companies attempt to introduce and fear that a competitor will

introduce. From a technology perspective, discontinuous technologies lie at the heart of

competency destroying innovations. Shumpeter [19] dubbed the role that technology plays in

industrial evolution as the process of ‘‘creative destruction.’’ He noted that the true threat a

company faced was not from price competition, but from technology competition. Unfortu-

nately, even today these ‘‘game changing’’ technologies are the most difficult to track. When

a competence-destroying technological discontinuity occurs, radical changes cause the

evolutionary cycle of technology to move on to a new trajectory. These trajectories are

usually modeled as S-curves. Firms may innovate along technological S-curves at differing

points. However, the rate of development along an S-curve will vary within and between S-

curves, causing the firms to experience different outcomes depending upon the timing and

type of their innovation.

New product development decisions that do not take into consideration the dynamics of

technology evolution may result in investments that are unsustainable. Firms may see the new

product options in the short-term as most profitable, but these investments lack long-term

potential. Thus, the firm must reinvest in subsequent technologies to remain viable. Firms

able to invest in new products that are expected to have greater sustainability can focus more

directly on enhancing core competencies, are likely to face less distractions regarding what

new technology to develop for the next short-term period, and can accrue knowledge benefits

that nonfocused firms may not be able to acquire. A decision to develop a new product that is

attractive in terms of its short-term rate of return without consideration to its long-term

sustainability, may use up valuable, rare, immobile, intangible, nonimitable, or renewable

resources (cf. the Resource-Based View of the Firm [20–30])2—especially with regard to

research and development (R&D) resources [31]. Decisions based on short-term rates of

return in lieu of long-term sustainability considerations may lessen organizational flexibility,

and result in an escalating commitment before having to be abandoned if it does not dominate

[11,12] or gain enough organizational support [15]. Therefore, new product development

choices that consider technology evolution and long-term expectations are considered to be

2 Note that our approach in this paper is counter to the dynamic capabilities approach [37,38] in that we reduce

emphasis on a firm’s need to constantly reconfigure resources to respond to specific needs, which presumably lead

to a series of short-term competitive advantages thought to enable sustainability under tumultuous conditions.


more meaningful to the firm’s future success than simply relying on economic returns in the

near term.

3. New product development from the firm’s perspective

Obviously, innovations may occur for different purposes during the different evolutionary

stages of technological development. To date, technology developments and evolutionary

stages have been viewed from outside the firm (cf. architectural, modular, radical, and

incremental classifications of innovations [32–34]). We take a different perspective and view

technology developments and evolutionary stages from the standpoint of the firm involved in

new product development. To a firm, a new product involves either a changed or new

component of a system, the creation of a new system, or both. A component may be a single

part or an assembly of parts that are more profitable for the end user when they are within a

‘‘whole’’ or larger unit, versus being used alone. A system is a framework for a set of

component parts—the design of their integration into a ‘‘whole’’ or profitable unit for the end

user. Given that we begin with a set of existing components in an existing system, the firm

then has three ways to classify its innovation: (Choice 1) it can develop a new component for

use in an existing system; (Choice 2) develop a new system that uses existing components; or

(Choice 3) develop a new system with new components. Whereas Choice 1 is considered an

improvement or minor innovation, Choices 2 and 3 are considered major innovations

emphasizing market-pull and technology-push, respectively. Choice 3 is the most radical

of all, because it is most likely to be competence-destroying.

Different innovations may be more or less likely to be developed by different kinds of

firms. Broadly speaking, start-ups in an industry are more likely to introduce radical,

architectural innovations compared to incumbent firms [35,36]. This translates into a higher

probability that start-ups will develop a new system with new components (Choice 3)

compared to incumbents. Alternatively, incumbent firms enjoy a first mover advantage when

pursuing component-based modular or incremental innovations [33]. It is more likely that

incumbents will develop either a new component for use in an existing system, or a new

system that uses existing components (Choices 1 or 2) compared to start-up firms. Firms must

consider the width of the technology trajectory they are entering, and the extent to which it

deviates from past, related technologies (in terms of replacement or substitutability;

complementarity or symbiosis) to determine the impact of innovation to their future

performance capabilities. Innovators must also consider the amount of new discovery

(attentiveness and activity) taking place within a technological regime, which determines

the speed or pace of advancement along a trajectory. A trajectory may begin fast-paced and

plateau relatively early in its life, or improve slowly at first and take off exponentially later

on, with no plateau in sight. Thus, the meaning of an innovation for a firm may be best

explained by the nature of the innovation and its relationship to the firm’s core competencies

and its market knowledge.

This paper focuses on how firms can make new product development decisions that result

in higher returns from innovation over a longer-term period. This implies choices about


technology systems and components, and also stresses the link to market evolution. New

product development decisions are intrinsically about functional performance and timing. The

tradeoffs inherent in the new product development process juxtapose uncertainty reduction

and decision-making quality. Firms attempt to obtain the highest likelihood of payoff, when,

and for how long. Incumbent and new entrant firms tend to make the same decision using

different frameworks based on their resources and capabilities (or core competencies),

experience with the market, experience with the technology system and its components,

and, in the case of incumbent firms, their ability to adapt to accommodate new developments

into their existing portfolio of products and processes.

Of particular interest, then, are the competence-destroying, discontinuous technologies—

as these are the ones that spawn new products and create new technological trajectories. By

definition, all firms pursuing a technological trajectory that was disrupted by a ‘‘Choice 3’’

radical innovation that they did not create will be holding onto at least one ‘‘dead-end’’

product that lies on a now-terminated or obsolete S-curve. The majority of firms have an

incentive, therefore, to prevent ‘‘Choice 3’’ innovations from occurring. Since the firm that

initiates the ‘‘Choice 3’’ innovation is less likely to be an established firm, radical

innovators are not easily detectable on established firms’ radar screens. Also, because

the radical innovator is likely to experience a competitive response from incumbent firms

that can overwhelm its limited entrepreneurial budget, it is seemingly motivated more by

altering the status quo and the associated adrenaline-high resulting from taking on such risk

through the act of engineering than by wanting to craft a new business and participate in

the act of management that includes starting and perpetuating going concerns—making it

unlikely to even be a faint blip on the radar screens of established firms. It is this invisible

threat to established firms—competence-destroying entrepreneurship by radical innova-

tors—that provides the impetus for established firms to engage in technology roadmapping

across the supply chain. Yet, it is system-based innovation that generates the highest profits

for firms.

For established firms, then, the way to generate high profits is to pursue ‘‘Choice 2’’

innovations, as well as maintain involvement in new product developments classified as

‘‘Choice 1.’’ Innovations that are component-based allow a firm to stay on an existing

technological trajectory. They are more sustainable than systems-based innovations, albeit

less likely to generate profits as high as those of systems-based innovations. An example of

such innovation strategy can be found in emerging fuel-cell technology. Incumbent firms,

with technological competencies rooted in internal combustion (IC), continue to seek ways to

increase fuel efficiency of the IC engine while simultaneously investing R&D to develop

hybrid engines or fuel-cell-based propulsion systems [39]. These incumbents, in effect, are

pursuing two S-curves: one they know well and whose asymptote is approaching, and one

that offers significant uncertainty. The fuel-cell example also illustrates how changes in one

module of the system can have dramatic impacts on the system and the support infrastructure

in which the system works.

To further explain, consider tracking technology through S-curve models of technology

performance per unit time (or per unit of engineering effort). Technology life cycles—S-

curves—are tied to improvements in performance resulting from R&D investments over time

Fig. 1. Technology S-curves help define performance over time and enable comparison of competing technology

performance.


(see Fig. 1). Typically, performance improves slowly in the early stages where R&D

investment might be expected to be only limited. Over time, as more effort is expended,

performance improves rapidly, until the incremental improvement per unit effort peaks and

then begins to decline. Foster [40] noted that the performance of alternative technologies

rarely surpasses that of established technologies prior to the inflection point. This can be

explained by the propensity of firms to continue investing in known technology solutions

while the incremental improvement per unit of investment is increasing [41]. As technology

matures, the rate of performance improvements achievable through a given technological

approach declines. Sahal [12] attributed this to challenges of scale (where technology must

meet impossibly large or impossibly small applications) and system complexity. Accordingly,

the only way to progress is through radical system redefinition.

4. Why should firms use technology roadmaps to choose an innovation strategy?

Established firms tend to make new product development decisions based upon the

incremental return on investment, as well as their continuing marginal return on past

investments. Often, past investments constrain the firms from leaping to another compo-

nent platform or architectural system. Companies utilizing lead users and customers to

determine product needs explain part of this. Another reason is a company’s desire to

recover as much of its sunk cost as possible and to continue operations as long as some

recovery of investment is possible. Such was the case with integrated steel makers when

Nucor Steel introduced steel manufacture using mini-mills, which are part of a different

trajectory. The installed capital base of the integrated steel maker encouraged incremental

investments to extend the life of the capital equipment base. As a new entrant, Nucor was

not similarly constrained. Consequently, the new entrant is able to consider investment

decisions on their merit and on their future ability to sustain the company and to be

sustained in the context of evolving markets. The relative position between the crux of the

current technology’s S-curve (and reaping the benefits of such) while facing the uncertainty


associated with the commencement of an emerging technology’s S-curve is favored by the

firm that can leap from the current technology S-curve to the emerging technology S-curve

at the point where the two curves intersect. Though technology S-curves are a valuable

tool to assess technology evolution and to compare technologies, they are inadequate to

assess the full impact of a technology on current and future activities since the technology

must be assessed with respect to the interactions with other technologies and with the

system as a whole [42,43]. Balancing investments in current efforts while initiating efforts

in new technology trajectories helps provide the needed cash flow to fund future work.

Uncertainty makes it difficult for firms to achieve and maintain this balance. Ultimately,

firms must assess their propensity for risk and must seek ways to externalize the risk or to

share it.

5. How do firms rationalize risk?

In order to profit from uncertainty, firms may pool investments and share risks. They must

be able to understand all of the ways in which components produced within a firm can be

used in different systems produced within that firm, as well as understand what components

are currently being produced and expected to be introduced by suppliers. This knowledge of

components within a firm, as well as between firms, can be provided by technology

roadmapping. Here, we assume that original equipment manufacturers (OEMs) emphasize

system innovations, and that suppliers/technologists emphasize component innovations. For

OEMs to pursue ‘‘Choice 2’’ innovations, they must be widely familiar with components

offered now as well as those planned for future production by their suppliers. In essence,

OEMs need knowledge from their suppliers. Hence, technology roadmapping requires

viewing a firm’s supply chain in a nontraditional way. Traditionally, supply chain manage-

ment has focused on efficiency by managing suppliers’ costs, time, inventory, and logistics

(e.g., via the practice of Just-In-Time Inventory). Yet the supply chain is a rich source of

knowledge that can provide firms with greater predictability in determining new product

feasibility, customer needs, and market demand. Firms that can manage their supply chain to

foster cooperative knowledge sharing and information gathering (with assistance provided by

IT systems) can utilize technology roadmapping to enhance the sustainability of their new

product development decisions.

Software-based technology roadmapping offers a framework to visually integrate market

and technology evolution. Companies use it to collect information from a wide variety of

sources to develop dynamic near-, mid-, and long-term plans for R&D investments and new

product and process developments. The framework organizes data into meaningful categories

that can be manipulated both temporally and across organizational functions. Perhaps an even

more compelling opportunity lies in the technique’s ability to integrate decision-making and

activities across the supply chain. Current e-business practices tend to focus on efficiencies

within the supply chain. Far more can be gained for both buyer and supplier if the interaction

stresses information flow, risk reduction through reduced uncertainty, and integration of

technology investment and development and product planning across the supply chain. Such


integration also facilitates make-versus-buy decisions at multiple points in the supply chain,

thus reducing the risk inherent in bringing new products to market.

Today, systems are increasingly complex, with IT embedded into products. This makes the

challenge of tracking developments in component technologies more difficult. Moreover, it

encourages pockets of experts to develop, some of which may be outside of the company.

This implies that companies need to share knowledge, expertise, and information across

organizational boundaries. In fact, interfirm collaboration is becoming increasingly popular.

However, while some firms may believe in the need to seek collaborations with start-ups (cf.

Microsoft) as a way of increasing the likelihood of survival in the face of ‘‘Choice 3’’

discontinuities [42], technology roadmapping encourages collaborations within communities

of established firms with the goal of increasing the sustainability of ‘‘Choice 2’’ systems

innovations. Corporate renewal or intrapreneurship, therefore, could become at odds with

randomized competence-destroying entrepreneurship if the battle over monitoring and

controlling component innovation intensifies to an extreme. However, as suggested here,

technology roadmapping is simply an aid in managing innovation. It highlights linkages

between components, and is not designed to prevent the natural randomization of discovery

within the business landscape that promotes the occurrence of spontaneous radical ‘‘Choice

3’’ innovations. In fact, if roadmapping occurs across the supply chain, the likelihood

increases that the network of companies participating can initiate radical ‘‘Choice 3’’

innovations. Making the assumption that different nodes in the supply chain have access

to different sources of information from experts and extended customers, we suggest that

companies that are involved in ‘‘collective roadmapping’’ have a heightened awareness of

both component evolution possibilities and potentials for successful architectural system

redesigns evidenced by unmet customer need. Additionally, these networks have the

wherewithal to invest in these ‘‘Choice 3’’ innovations.

Regardless of the type of innovation, however, information transfer is an essential

component of technology development. Von Hippel [44] suggested that production networks

with superior transfer mechanisms between supplier, producer, and user were more innovative

than similar networks with less effective knowledge sharing practices. Recent studies

demonstrate that tightly coupled groups transfer complex information more effectively, but

they also note that these tightly coupled groups tend to be less innovative since they have

more redundant information [45]. Several advances in IT have reduced the emphasis on co-

location. For example, Jassawalla and Sashittal [46] determined that cross-functional teams

increased the integration within the new product development process, but that these gains

were even more pronounced in organizations that considered participant-related factors in

their processes. These factors include new ways of linking people and functional groups that

create synergies, utilize existing talent to the fullest potential, and harness peoples’ creativity.

Together, these practices result in a sense of what the authors call a high level of ‘‘at-

stakeness,’’ which is characterized by equitable input in decision-making and an explicit

acknowledgement of the interdependencies that exist within the process. In addition, the most

successful companies frequently aim to create high levels of transparency between partic-

ipants through the joint exploration of innovative scenarios between customers, suppliers, and

developers resulting in flatter, customer-focused, boundaryless organizations. These findings


offer important guideposts to the requirements for an underlying IT system to support cross-

organizational collaborative new product development.

6. The technology roadmapping framework: a technique to capture diverse information

in technology evolution and new product development

To fully take advantage of technology developments, companies must have information

about the timing of these developments, the resources needed to support the development

effort, and the multiple ways in which the technology might be used within the company’s

current and future product offerings [47]. Technology roadmapping has been identified as a

way to accomplish this information capture and presentation. Motorola [48], Phillips [49],

Lockeed-Martin [50] and others utilize this technique.

Roadmapping offers a framework to visually integrate market, product, and technology

evolution. Firms use it to gather information from a wide variety of sources to develop

dynamic near-, mid-, and long-term plans for R&D investments as well as new product and

process developments. Within a company, this tool integrates what is known at all levels of

the firm into a framework that supports strategic initiatives and tactical decisions. Road-

mapping is very different from another popular graphically based management tool, the

Program Evaluation Review Technique or PERT network [51,52]. A PERT network is used

Fig. 2. Generic roadmapping format links basic and applied research and technology development to support

product platforms for individual markets. Adapted from Ref. [54].

Fig. 3. Honeywell technology roadmapping utilizes Geneva Vision Strategist software to digitally capture

technology projects, components, subassemblies, and the timing of these developments to support products [56].


for scheduling complex projects given various time estimates for completing project

activities, and is very tactical in nature. Unlike roadmapping, a PERT network is not a

forecasting or enterprise integration tool.

Phaal et al. [53] have identified 16 different formats of roadmaps at use in companies.

However, all company-based roadmaps possess some common elements (see Fig. 2).

Technology roadmapping involves intertwined cycles—those for technologies and those

for markets—that are interfaced by an industry’s competitive dynamics. In general, roadmaps

identify the technologies underlying current and planned products and highlight the known

technology developments that are anticipated, and the elements that will be needed to

successfully develop the new product. These maps also identify the underlying R&D

investments needed to develop the technologies and to integrate them into a new product

and/or system.

For example, Honeywell, which has a long history of technological forecasting [55], is

currently using digital roadmapping software, Geneva Vision Strategist,3 to help coordinate

its investments in new technology and products. Current efforts extend the expert-based

pioneering approach originally used at Honeywell. Fig. 3 is an example of the technology

roadmap information that Honeywell presently evaluates. Honeywell creates scenarios—

collections of linked technologies, components, subassemblies, and key aspects of a product

that must come together to create a successful product offering (see left of Fig. 3). This

3 Geneva Vision Strategist is produced by The Learning Trust, http://www.learningtrust.com.

http:\\www.learningtrust.com

http:\\www.learningtrust.com


information originates directly from those involved in the technologies and products, and is

not filtered by experts. The software organizes these developments in terms of timing,

financial commitment, and technical uncertainty (see right of Fig. 3). The phased nature of

Honeywell’s approach helps the company determine the sequencing of events and invest-

ments. The company has recently tied its stage-gate innovation management system to the

roadmapping process to improve investment decision-making [56]. Roadmapping also

facilitates Honeywell’s ROI projections since it helps the company envision and manage

technology reuse. Honeywell’s goal is to deliver differentiating technology only when it is

needed. Using technology roadmapping, Honeywell is able to improve its R&D effectiveness

and efficiency by working on the right things and leveraging its investments across divisions

and platforms whenever possible.

7. Making sustainable new product development choices

Entering with a new product that capitalizes on architectural innovation requires that the

new entrant combine existing technical knowledge with new market knowledge. Firms with

a given stock of knowledge are likely to follow a particular S-curve pattern. Moving along an

S-curve trajectory assumes a frame of reference whereby technology development progresses

along expected or predictable lines. Given that the firm has IT capabilities and can therefore

expand its knowledge base to search for new markets and ways to incorporate a new system,

which branches from its technical expertise, such firm can add value to existing knowledge.

Interorganizational communication is essential to enabling the firm to achieve such

innovation.

An interorganizational approach to R&D and new product/new process development that

stresses diversity of information sources aligned into a cohesive, real-time IT framework,

requires companies to rethink their approach to supply chain management. Firms that can

look outward can create new supplier/buyer partnerships, describe opportunities for synergy,

symbiosis, and/or technology disruption, and enact what they see can be accomplished.

Studies suggest that this approach can positively impact time to market for the overall supply

chain [57]. Hammer [58] likens this to managing chains of activities across companies,

stressing that streamlining cross-company processes is the next great frontier. These agile

supply chains [59] are particularly important when technology uncertainty and market

uncertainty combine to create severe competitive pressures for a single company since they

help pool knowledge and share risk across network members.

Some of the ways that supply chain management has been approached include information

integration through computers, activity-based accounting, carrier reduction, single sourcing,

outsourcing, and third-party logistics. Outsourcing is the fastest growing supply chain

management strategy [60]. Outsourcing links the capabilities of resources within the network,

thus extending the capabilities of an individual firm [61]. This growth increasingly means that

suppliers will become a source of information about new technologies, and that in many

cases, the actual development is more likely to be undertaken by a supplier rather than by the

assembler, integrator, or end user [62,63].


8. Roadmapping across networks supercedes traditional supply chain coordination

Current business-to-business communications do not maximize the value of diverse

information flows. Electronic data interchanges (EDI) involve computer-to-computer sharing

of information and are mainly used for the exchange of business documents [64]. The Internet

has expanded this computer-to-computer cross-talk to include transaction processing and

order tracking.

Enterprise resource planning (ERP) systems that combine information about finance,

marketing, and material requirements [65] represent a more advanced exchange of

information within and across organizational boundaries. Performance within and across

the supply chain has been assessed by reductions in costs and cycle time, reductions in

inventory and inventory fluctuations, and a return on investment in working capital [66].

Current ERP systems do not address the underlying choices in technology development or

the tradeoffs implicit in new product development. More recently, purchasing departments

have begun to reconsider their decisions in a scope beyond cost and quality. For example,

Motorola’s Personal Communications Sector group has made sweeping changes to its

supply change management organization. The PCS division is using purchasing engineers to

more effectively link engineering decisions with purchasing decisions [67]. In 2001,

Motorola outsourced more products to original design manufacturers (ODM) and reduced

its supplier base by two thirds. Using this approach, make-versus-buy decisions are

considered based on risk reduction, uncertainty, and the shared expertise that exists across

the supply chain. Under these conditions, individual component purchases along the supply

chain have gone from ‘‘over the wall’’ order taking to collaboration. When cell phone

volumes doubled each year, the pressure to standardize or reuse components was slim. As

demand has stagnated, Motorola sought ways to reduce its manufacturing and component

costs. In a 2-year period, it has gone from 65 different cell phone models to about 25

models; resulting in savings in 2001 of US$1.3 billion and estimated savings in 2002 of

US$2 billion [67].

Motorola expects that the primary benefit from its initiative is a reduction in its supply

base, that is, identify key suppliers and develop long-term relationships with these select few.

Seeking to go from over 300 suppliers to fewer than 100 suppliers, Motorola has emphasized

technology capability as the critical factor in deciding which suppliers to keep [68]. Fig. 4

illustrates Motorola’s overall strategy to work with key suppliers.

Motorola personnel generate individual roadmaps for products and/or projects using

Geneva Vision Strategist software. In using this digital platform, Motorola obtains similar

benefits as Honeywell, including technology reuse across divisions, reduced product

complexity, and reduced costs and cycle times. Motorola has extended the use of road-

mapping to its supply chain.

Motorola begins this process by linking its divisional roadmaps into a ‘‘Meta Roadmap’’

that is used to communicate with customers and suppliers. This roadmap assists Motorola in

identifying gaps in product offerings and unmet customer needs. Motorola can also

anticipate future possible offerings by considering what’s in its supplier pipeline. To do

this, Motorola is signing long-term agreements with key suppliers and asking them to

Fig. 4. Motorola integrates supplier roadmap information directly into its internal roadmaps to plan technology

and product evolution.


undertake digital roadmapping that can be directly integrated into Motorola’s technology

roadmapping system [68]. The company is using the Internet to coordinate and integrate its

supplier input.

The benefits to the entire network are immediate, because of the reduction in uncertainty

involved in timing of product launches and possible volumes of production needed to

support them. Motorola, on the other hand, reduces its technical risk by using proven

components whenever possible, enhances its product line by integrating the most recent

component developments into its products, and is improving its competitive position by

reducing the cycle time to market. The roadmapping software is transforming the current

supply chain into a collaborative community of technology and product developers.

Ultimately, Motorola hopes this collaboration will help it identify emerging technology

opportunities earlier in their development, thus giving it a competitive edge in product

planning.

9. Information sharing enhances network agility

From an interorganizational perspective, sharing information across boundaries develops

each firm’s capabilities [69–71]. Here, managing knowledge flows is akin to managing

cooperative relationships [72], and successful knowledge flows may be the ultimate source of

competitive advantage [73].

Two important aspects of information sharing across organizational boundaries are synergy

and leveragability [73]. Synergy results when the cooperation yields additional value from

interdependent knowledge sharing. This means that the cooperative sharing produces more


knowledge for each firm by knowing the other’s information. This is due to interdependen-

cies of their activities [74]. Leveragability occurs when one party can take additional

advantage of the information beyond the specific cooperation. Such might be the case where

one company can use the information in an intended product development and then

subsequently uses this information, and perhaps associated learning, for additional develop-

ments. Technology reuse, especially in increasingly diverse applications, reduces the costs

and risks of bringing a new product to market. Technology reuse in new markets or

applications also offers new opportunities for individual firms within the network to

participate in other collaborative networks, creating a dynamic environment for networks

of networks.

R&D investment is predicated on the comparison of anticipated costs versus antici-

pated returns. In the broadest sense, anticipated returns might include both financial rents

and organizational learning, especially important in a network environment [75]. Lever-

agability increases the applied value of the shared knowledge, thus encouraging a higher

level of R&D investment. The challenge of IT is to develop the infrastructure to exploit

these advantages while reducing the impact of negative effects [72,76].

Information sharing is not without its costs, however. A specific information ontology (cf.

Ref. [77]) is required to share technology developments and product planning in a meaningful

and dynamic way across the supply chain. Underlying successful digital roadmapping efforts

is the XML structure for how one data point relates to another. To date, ontologies that have

been developed are very specific to the particular company and/or industry sector. This limits

the potential of networked innovation and new product development since many ontologies

parallel the engineer’s component–subsystem–system view of the world. This framework

requires the user to possess the contextual knowledge to adequately interpret relationships

among components and subsystems. Linking through keywords and metatags within a

discipline is much more direct than linking beyond that physical domain [77] or when

considering issues of category conversions that occur, for example, in experimental sciences

and manufacturing [78]. Usability and reusability of information is constrained by a priori

choices about the relevant domain [79]. This aspect of current information structures and

search engines is particularly limiting for technology developers seeking to identify

discontinuous technologies which frequently result from the unanticipated combination of

previously unrelated concepts, theories, materials, and/or components. Future search engines

must be able to combine core theories [80] and ontology projections [79] with traditional

hierarchical models of relatedness to effectively share information across organizations and

across domains.

Information sharing leading to effective collaboration requires a level of trust between

organizations [81–83]. IT may evolve to a point where disparate Web-based information can

be combined in real time, but proprietary information sharing necessitates a win–win

situation for all parties involved. Motorola is convinced that advanced knowledge by its

suppliers will encourage them to participate in Motorola’s roadmapping activities. Studies

have shown that suppliers will participate in sharing information about developments when

the economic rents from doing so are high enough [62]. This implies that eventually

knowledge can be assessed in economic terms.


10. Conclusion

Here, we have illustrated how technology roadmapping uses IT to manage the supply

chain for knowledge. Managers have been exposed to several strategies and paradigms that

emphasize the need to not attempt to create sustainable innovations (e.g., the view of

hypercompetition in the mid-1990s [5]; the dynamic capabilities approach of the later-1990s

[37,38]) in favor of disruptions, exploitations, counter-attacks, and a series of short-lived

actions. Wasted resources, underemployed manpower, and an inability to participate in future

opportunities as a consequence of past decisions have not been given the attention needed.

Here, we suggest that managers concentrate on choosing the best technology for long-term

future returns. Short-term profitability may not be as high as previously deemed acceptable,

but long-term benefits may exceed expectations. Developing new products that maximize the

firm’s resources, enabling it to reach farther along the S-curve, and hence, leading it toward

greater opportunities for more relevant innovations in the future, is the essence of our

proposed heuristic approach.

We have touched on how software-based roadmapping efforts are beginning to transform

company R&D investment and new product development planning. Capturing knowledge

once, in a usable and reusable format, strengthens decision-making capabilities. Sharing

company-based information across organizational boundaries leverages the knowledge

contained within the network. IT search engines must evolve to reach beyond the current

systems engineering view to include dynamic, concept- and theory-based relationships while

seamlessly combining text, object, and financial information. This will facilitate linkages

between known information domains and those further away. Incorporating supply chain

Fig. 5. Framework to link innovation risk with intellectual capital needs and opportunities for within enterprise

and networked innovation.


information will enable these dynamic, adaptable search engines to help companies to

recognize, develop, and plan discontinuous technologies.

Fig. 5 summarizes key points throughout this piece into a cohesive framework that

acknowledges different sources of risk, different methods of innovation (individual enterprises

and networked innovations), and the intellectual capital that will be needed to support these

efforts. Our model captures both the complexities inherent in innovation and new product

development and offers a view of the managerial tools of the future, including technology

roadmapping and its impact on the way that decisions are made. Digitally linking firms in a

meaningful way pools and redistributes risk across the network. The decision tools that this

enables will more effectively capture the risk and returns inherent in the new product

development process. Use of real options modeling and Bayesian decision-making systems

are logical outgrowths of our proposed framework for managing within firm and networked

innovations.

Technology roadmapping does have problems associated with it. Sharing knowledge may

encourage opportunistic behavior when knowledge asymmetries occur, as well as behavior-

ally conditioning firms to trust less if they experience negative effects from sharing early on,

or incur more negative than positive experiences from sharing. Also, leakage may acciden-

tally or strategically occur causing some firms who are highly skilled at something to lose out

to less competent counterparts. As firm boundaries dissolve and communities of creators

emerge, the rational view of strategic planning used most often by firms today will need to

change. Change in managerial mindset is not expected to be able to be adopted by all firms,

causing some firms to take flight and others to fiercely fight for the dominant logic. Also, on a

related note, the accounting systems used by firms to track and assess outcomes from new

product developments are expected to require significant alteration if technology roadmaps

are adopted on a large scale [84]. Obviously, firms that employ technology roadmaps in the

most disciplined fashion will have to be organizationally flexible. They will need to know

how to reconfigure frequently, not only to be able to adapt to changes in existing technology

trajectories, but to take advantage of new ways in which components and systems may evolve

and intersect.

One may argue that firms are pulled to exist by an economic hegemony that by definition

serves as a barrier to the development of new systems (cf. Ref. [85]). Institutionalization is a

manifestation of an economic hegemony, encouraging firms to set up legitimating routines and

structures around their current production of components and/or systems, which in turn

pressures them to seek and accept only that information that confirms their present state and

allows them to persist within their present state more efficiently [85,86]. We believe that this

view is pessimistically biased not only toward the inability of business management to keep up

with innovation, but also in assuming that firms’ creativity will decrease over time. Technology

roadmapping can become an institutionalized way of doing business, forcing managerial

mindsets to become more open, creative, long-term focused, and flexible. Technology

roadmapping is simply a tool that can enable firms to make more sustainable new product

decisions. In so doing, it can prevent the waste of precious time and resources, help to reduce

the risk associated with uncertainty, and as a result increase the accuracy of making profitable

decisions. We believe that the benefits of technology roadmapping far outweigh its costs.


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