Innovation and technology cycles
For a long time, organizations have been experiencing various kinds of problems and they have resulted in their management exploring various changes to introduce into their mode of operation. Innovation and technology cycles have been very useful to organizations as they have helped such organizations to realize the changes. Innovation refers to the incorporation of new functionalities to existing products and processes. As a result, an organization is in a position to attain productivity. From this definition, it is evident that innovation could help an organization to produce better products or services relative to competition. Consequently, the overall productivity of an innovative organization is bound to increase. Innovation is mostly necessitated by obsolescence, inefficiency or ineffectiveness of existing products or processes. It could also stem from ideas about improving products or services within an organization.
The direct benefits of innovation are almost always evident. To start with, innovation greatly impacts on the market in which the products of an organization are sold. The development of ‘new’ products leads to the satisfaction of the needs of people who previously were not customers of the organization. As a result, markets are expanded. Process innovation may lead to better ways of doing things leading to a reduction on costs thus increasing revenues. This translates to more profits and thus increasing the investment ability of the organization. Innovation also leads to increased efficiency and effectiveness of an organization in the way it produces its goods and services. The study of innovation in organizations would be incomplete without mentioning technology (Tushman 2002, p. 8)
Technology refers to how science is employed by an organization to help it attain its set goals and objectives. Many organizations employ technology both in production and while offering support services to their customers. The popularity of technology in manufacturing has led to many organizations relying almost entirely on it for all their operations. Technology ensures that during production, an organization realizes a large number of outputs and a small number of inputs. It also ensures that processes achieve their intended goals effectively. In this case, the best technology for any organization is not the most recent or most popular but the one that makes an organization achieve its objectives by balancing effectiveness and efficiency of operations (Tushman 2002, p. 11). From this definition of technology as used in organizations, it is clear that technology and innovation are closely intertwined. Let us introduce a more specific term that will aid in the analysis of the relationship between technology and innovation. This term is technology cycle.
To form a perfect analogy of the usefulness of technology cycles and innovation and show how each affects the other, it is necessary to first define them with respect to their relative use in industries/organizations. Technology cycle refers to the period of time that elapses from the creation and implementation of a given technology to the time when another better and up-to-date technology replaces it. This change is normally influenced by the introduction of new methods of production that are more sophisticated than those in existence. The new methods result from advancements in the quality of the knowledge related to the field of the organization and the incorporation of new techniques and equipment in the production process. On the other hand, innovation is the introduction and implementation of a new way of doing things that is more productive than the previous methods. The main intersection between technology cycle and innovation is seen in the way innovation forms a break in the technology cycle by providing a transitional reason from one technology to another. From its definition above, innovation gives rise to newer and better methods of achieving organizational objectives and therefore warrants a change to the methods that were existent before the innovation. Several changes during the technology cycle are necessitated by the fact that innovation is studied by competitors and with time they may be able to copy it or modify it to fit their operational needs. Therefore, to maintain a competitive advantage, it becomes necessary for organizations to plan for a stream of innovations that enable them to implement periodical and frequent technology cycles. The timing of these cycles may be fixed or spontaneous depending on the nature of the innovations to be implemented. In a case where innovations are constantly developed, proper planning may be put in place to ensure that after a given period of time, there is a change in technology by implementation of an innovation. Another kind of change may be seen in a case where an innovation is implemented after analyzing it and concluding that it is better that the existent system. In this case, the organization will consider changeover costs and implement the innovation (Deepesh 2009, p. 1).
Case Study
Importance of innovation to Intel
Innovation is very important to Intel due to the continually increasing demand for high speed computers. This demand has made Intel, a leading computer manufacturer, to improve the speed of computers. In this case, the innovations adopted by Intel are geared towards making better computer chips after every two years. The demand for high computer speed has been necessitated by a continuous revolution in the digital industry. Individuals from various professions now rely on the internet for research and referral purposes. Therefore materials containing large amounts of information slow the speed of a computer. Examples of such materials include video, information in PDF documents, music and phone calls etcetera. Intel is obliged to progressively find technology solutions to improve computer speeds through its Research and Development program. Intel is thus making better chips after every two years. Its best and latest innovation is the 45nm transistors (“Managing IT Innovation for Business Value” 2009, p. 1).
Models of Innovation
Henderson and Clark state the models of innovation as incremental, modular, architectural and radical models. Incremental innovation is a kind of innovation that improves a component and architecture that is already developed. For instance, an increment in the storage space of the hard disk is an incremental innovation. Modular innovation employs new ideas for the component and leaves the architecture is unchanged. An example is in a case where one component is substituted with another. In architectural innovation, connections between components are changed but individual components are left unchanged. A good example is Intel’s 45nm transistor innovation. These transistors used the same technology that was used before, transistor technology, but their internal connection were changed to make them smaller. Thus they fit the architectural innovation description very well. Lastly, radical innovation changes both the component and its architecture. For instance, the innovation from magnetic hard disks too optical hard disks is radical (“Henderson-Clark Model” 2006, p. 1).
Product development approaches
The two approaches for product development are product-led product development and market-led product development. Product-led product development refers to a case in which an organization improves the methods it uses in production and hence improves the resultant product without a consideration of the needs of the target market. Market-led product development is an approach that studies the target market of the product and then develops a product suiting the market. In Intel the employment of the product-led approach of product development is evident in the program that seeks the increment of microprocessor capacity. This program is only focused on increasing the capacity of the microprocessor without much concern regarding the quality of the microprocessor required by the market. Therefore, it perfectly fits the description of the product-led approach of product development. Another example of product led product development is the development of the 45 nm gate silicon. This is because this silicon was introduced while experimenting material strengths and its development was not based on market need. The market-led approach of product development is also evident in Intel’s operations. Consider the fact that Intel has anthropologists for studying the dynamics of the people’s use of technology. This is an analysis of the needs of the market in order to make goods that are in conformance with market needs and demand. This way Intel shows its passion for customer satisfaction. The fact that Intel uses both methods of product development also highlights the irreplaceable importance of both methods in product development (“Managing IT Innovation for Business Value” 2009, p. 1).
Research and Development
Research and Development (R & D) is normally concerned with the employment of various techniques aimed at obtaining information on how to better strategize an organization in terms of production. It normally addresses issues like: making of new products that enable the organization to serve its customers well, improvement of the production methods employed by the organization in a bid to improve the quality of products and manufacture more products, and finally exploration of markets to find new expansion opportunities. R & D is very crucial for businesses in the technology sector. This is because the technology sector is very dynamic and thus the product popularity last for a very short time. Thus if a business does not involve itself in R & D, its products will soon become obsolete. In the absence of new products, an organization will run out of business. Consider for example the contemporary need for faster computer chips. If Intel does not involve itself in R & D, other computer chip companies may develop chips that beat Intel’s chips by far and thus Intel chips may become undesirable in the market. This could very easily lead to the fall of the business. The involvement of Intel in R & D has enabled it to have an advantage in the market over its competitors. R & D in Intel has introduced the 45nm gate silicon which has led to the production of highly demanded products innumerably. The research has also led to discovery of new production methods which have made the production process easier. These capabilities brought about by R & D have enabled Intel to the production of the Intel Centrino notebook computers. Intel’s R & D has also revolutionized the field of robotics by its research in silicon that led to the development of sensors. R & D has also helped Intel to learn new functionalities for technology by its study in the integration of a number of wireless technologies. The widely distributed Intel laboratories have contributed substantially to the awareness of a large customer base about Intel and its products. Most of the advancements that are evident in contemporary computing can be attributed to Intel’s disciplined research. For instance, the idea of multiple computing was made possible by the introduction of faster chips in the market by Intel. It is therefore apparent that Intel’s R & D has given birth to a lot of benefits market wise. The most advantageous thing about using R & D for market strategy is that products that come out of a well organized R & D program guarantee customer satisfaction. For example, Intel’s R & D has led to the development of small computers and mobile phones with high speeds that are sold at cheaper prices. This has led to considerable customer satisfaction which has given Intel a competitive edge. The fact that Intel works with all the major players in the microchip industry during its research gives it an upper hand in understanding the requirements of the specific details of chips. These include details like features, design etcetera. These are incorporated into the chips and therefore they serve the needs of all the key players in the microchip industry. This gives Intel a very good advantage over its competitors (“Research and Development” 2010, p. 1).
Reference
Deepesh, J 2009, “Technology cycles and innovation”, Web.
Innovation Zen 2006, “Henderson-Clark Model’, Web.
Intel Press 2009, “Managing IT Innovation for Business Value”. Web.
The Times 100 2010, “Research and Development”, Web.
Tushman, M 2002, Technology Cycles, Innovation Streams, and Ambidextrous Organizations”, Web.