The Challenge

1
The Challenge
The Challenge of Technology
Management by Heinz G Schwaertzel

IDIMT98 October 21-23, 1998 Zadov,
Czech Republic
2
Technology as an Economic Source
Economy Needs Technology Technology
Generates Inventions Inventions Generate
Innovations Innovations Generate Businesses
and Markets
3
Research Generates Employment
Technology
Productivity Research

Employment Development
Innovation
Oeconomic Value
4
Innovations in Microelectronics and Computer
Field Effect Transistor Patent
Spot Contact Transistor
Silicon Crystal
FET Realisation
Microelectronics
Planar Technology
Integrated Circuits
Random Access Memory
Micro Processors
1920
1930
1940
1950
1960
1970
1980
1990
2000
Personal Computer
Virtual Addressing
Computer
Separation of Software from Hardware
Transistor Based Computer
v. Neumann Computer
ENIAC, Electronical Computer, based on tubes
Z3, Electromechanical Computer
Z1, Mechanical Computer
5
Laws of Scaling in Microelectronics Design (DRAM)
Design-Rule (µm)
Capacity of Memory
Bits per Chip
10
1 bill.
100 mill.
10 mill.
1 mill.
1
100000
10000
1000
0.1
Time
1970 1980
1990 2000 Time
1969 72 75 78 81 84 87 90 93 96 99
RD Production Investments
costs
Pfennig per Bit
3"2
1
1/10
1/100
1/1000
1"6
1/10000
1"0
0"65
1/100000
0"45
0"2
1/ mill.
1/10 mill.
64k 256k 1M 4M 16M
64M
1969 72 75 78 81 84 87 90 93
96 99 Time
6
The Semiconductor Pyramid (1989)
Electronic Systems 505 Mrd.
Semiconductor Circuits1 62 Mrd.
Manufacturing Equipment 9,6 Mrd.
SemiconductorMaterials2 7,8 Mrd.
1) MerchantCaptive Production 2) Incl.Chemicals
and Gases, Photoprints and Materials for Chip
Packaging
Source Konrad Seitz
7
Electronics Drives the Economy
Structural Change of the World Market of
Electronics
Areas of Electronics Industry and
ConsumerComponents, Computer and Communication
SystemsMeasuring, Controlling , Automation,
Automotive and Traffic, Medical Technology
Software, including Assembling and Maintenance
4 550 Bill. DM
Electromechanics
27
3 040 Bill. DM
34
Industry and Consumer Electronics (Software
incl.)
73
615 Bill. DM
66
66
34
1970 1994 2000
(Prizes and rates as of 1994)
8
Changes of the Value Adding Structures
Production
The European IT-Market
Components
Engineering
Hardware
Systems
Software Services
Electrotechnics
Software
Hardware
Information Communication
9
Information Technology Industry in Europe 1995
Services
Products
Technology
Message
Total Volume 743 Mrd. ECU
Source EITO 95
10
Structural Changes of Employment since 1800
11
The Trilemma of Risks

No Changes without Risks Dynamics and Risks of
Technologies Time to Market and Life
Cycles Costs and Investments Complexity and
Quality
12
Shorter Life Cycles of Products and Technologies

Example Switching Systems

Cum.Sales (Index)
HDW
EMD
ESK
EWSA
EWSD
1908
'75
'80
'54
'64
1910 1920 1930
1940 1950 1960 1970
1980
Types HDW Hebdrehwähler EMD
Edelmetall-Motor-Drehwähler
ESK Edelmetall-Schnellkontaktrelais
EWSA(D) Elektronisches Wählsystem Analog
(Digital)
13
Change in Life-Time and Development-Time of
Products
In High-Tech Areas the Development-Time has
passed the Life-Time of Products
8 7 6 5 4 3 2 1
Years
Average Product-Life-Time PL

PD gt PL
Average Product-Development-Time PD
Quelle IBM / FhG - IAO
14
Systems Business Changed to a Volume Business

25 Years Story of Siemens Switching
Business
Price Collapse and new Competitors enforce new
Products and total Globalisation
Market Behaviour transforms the Business
Characteristics
15
Time-to-Market as a decisive Factor for Success
The Fatal Influence of Delay in Time-to-Market
Example With an expected accumulated sales
volume of 100 Mio in 5 years, every month of
delay in product availability generates a
hyper-critical decrease in profits. Coming
late, Loosing business.
16
Software Complexity without Limits
60
50
SpaceShuttle
EWSDforBB-ISDN
40
LunarMissionControl
30
Millions of Objectcode-Instructions
Apollo
20
EWSD-APSWM/4.2
Gemini
10
EWSD-APSDBP-14
Mercury
0
1960
1970
1980
1990
2000
17
Investigated Probability of Success of
RD-projects
There is a huge economical Risk in Development of
Technology
Among 100 RD-projects . . .
... 57 yield technical success
technical risk
... 31 are being introduced to market
... 12
economical risk
are economically successful
18
Technology and Enterprise
Technology serving Business Needs Methods and
Instruments Core Technologies Technology
Portfolio Technological Roadmaps Product
Roadmaps Multiple Generations Product Planning
19
Core Competencies of an Enterprise
Technology
Marketing
Social Resources
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The Term of "Technology"

• Technology Specific Knowledge, Skills, Methods,
  and Facilities for Usage of scientific and
  technical Findings
• Techniques Definite Application of the
  Technology aiming at the Solution of a specific
  Problem
• Economical Task of TechnologiesCreation of the
  Prerequisite needed for the economical Processing
  of Products and for the Development of efficient
  processing Techniques

21
Classification of Technologies according to its
RD-Effort
RD-Effort
Low Technologies
lt 3,5 of turnover
Advanced Technologies
3,5 - 8,5 of turnover
High Technologies
gt 8,5 of turnover
22
Process of Technology Planning

• Identification of the known relevant
  Technologies Registration of the current
  state
• Technological Forecasting Registration
  of trends and development possibilities
• Market Analysis of Technology Market
  Attraction - Competitive Strength
  Technology Attraction - Technology Strength
  Registration and Presentation of the Technology
  Potential
• Segmentation in Technology Types Core,
  key, pacemaker, and future Technologies
• Working-out and Formulation of Technology
  Strategies

23
Core Technologies
Core Technologies are Strategically Important for
the Company
Core Technologies ... ... are Technologies
providing major Contribution to Value-added and
Net-earnings, ... are consistently derived
from the medium-term Technology
Requirements of the Business, ... support
multiple Business Areas and Units, ... offer
Potential for long-term Innovation and Growth.
Source Siemens ZT
24
Examples of Core Technologies
Core Technologies Form a Network of
Competences
Silicon Process
Metals, Magnets,Superconductors
High-Level Design Techniques
SAW -Ics Wireless Sensors
Plastics
Ceramics Phosphors
Integrated Circuits
Micro-electronics
Sensors Actuators
Materials Engineering Recycling
Packaging Assembly
Materials Manufacturing
Power Electronics
Components
FunctionalThin Films
CAD, Simulation Verification
Design Center Gallium Arsenide
Sensorics forProcess Control
VLSI SystemsIntegration
Contact Techno- logies Laser Processes
Micromechanics Coating Technologies
Photonics
Analytics
Superconductivity Cryogenics
Product Definition
Holistic Processes
PlasmaTechnology
Photovoltaics
Production Strategies
Energy
ProductionProcesses
Service Management
Development Products
Electrochemistry
Transducer Systems
Silicon Carbide Switching Technology
Development Systems
Manufacturing
Adaptive Information Signal Processing
Component-basedSoftware
Software System Architectures
Software Engineering
Imaging Visualisation
Siemens CorporateResearch
Software Systems Processes
Software Engineering
Systems Engineering
Design Automation
Multimedia Video Technology
Source Siemens ZT
25
Road Maps and Multi-Generation-Planning
Multi-Generation-Product-Planning and Technology
Roadmaps as Basis for Technology Planning
Source Siemens ZT
26
Typical Life Cycle of a Technology
The Life Cycle of a Technology can be described
by the S-Curve Model
Degree of Exploitation of the Differentiation or
Performance Potential
Basic Technologies
Key Technologies
Pacemaker Technologies
Degree of Maturity
Source Saad/Roussel/Tiby,Töpfer/Sommerlatte
27
Competitive Significance of Technologies
Strategical Role of Technologies
Competitive Significance
Basic Technology (maturity and age)

• largely controlled by all competitors
• limited scope of development
• foundation of the industry
• not eligible to reach effective competitive
  advantages

• Clear outstanding influence on competitive
  ability
• high development potential
• big influence on differentiation of products or
  costs

Key Technology (growth)

• early stage of development
• specific application areas
• high potential impact on performance property of
  products or cost structures

Pacemaking Technology (introduction)

• stage of research
• no specific application areas yet

Future Technology ( very new)
Source Saad/Roussel/Tiby
28
Typical Situations using Technology Portfolios
A Portfolio Presentation of Technology Strength
follows the wellknown Portfolio Presentation of
Business Strength
Situation Mature Technology T1 to be replaced by
new Technology T2. The Position in T2 is to
weak. Measure Investition more in T2 or
co-operate.
T2
Importance
T1
Position
Situation The weak position of T1 endangers the
project. Measure Concentrate all resources upon
T1.
T1
Importance
Position
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Global Competition in Technology
RD Expenditures of the Top Ten Electrical
Engineering CompaniesBased on annual reports
1996/1997 only partially comparable without
external RD orders and public funding
Expenditure in percent of sales
Expenditure in billions of DM
IBM
8.6
6.7
Siemens
8.1
7.6
Hitachi
7.1
5.9
Matsushita
6.1
5.7
Fujitsu
5.0
7.8
NEC
4.9
7.0
Toshiba
4.7
6.1
HP
4.6
7.1
Ericsson
4.5
16.2
Sony
4.0
5.0
Exchange rates of 1996/97Source Siemens
30
Technology and Innovation

• From Management of Technology to Management of
  Innovation
• Innovation as the Goal
• Innovation Processes
• Managing by Visions

31
The Dilemma
The Actual Economic Dilemma Gain of Productivity
vs. Loss of Work Content
Productivity
Innovation
Added Economic Value
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The Term of "Innovation"
Innovation Bringing an Idea to Impact

• The Essential of an Innovation is being something
  new in an Organisation or in the Marketnew
  products, new processing, new ways of contracts,
  new ways of distribution, new commercial
  statements, new corporate identity, ...
• The Innovation may refer to an intra-organisationa
  l Advantage (process innovations) as well as to a
  Use in the Market (product innovations).
• Innovations can emerge on every Step of the Value
  Generating Chain.
• Incremental Innovations ( Improvement-Innovations
  ) need Markets, Basic Innovations (
  Breakthrough-Innovations ) create Markets.

33
Innovation through Feed-Back
Competence in Innovation needs Competence of
Managing Feed-Back-Processes
Competence
Market, Customers, Competitors, Employees,
Technology, Patents
Development Production Marketing
Market Penetration
Generating Ideas and Inventions
Economic Power
The successful transformation of ideas into
innovations needs the knowledge of the advantages
of the customers, the channels to the market, and
the strength of the competitors.
Every Innovation Process starts and ends with the
Customer
Raffler, Siemens
34
Innovation Fields
"Technology Planning" and "Innovation Fields"
Complementary Approach to generate innovative
Project Ideas and new Business Opportunities
Innovation Fields
Today'sBusiness
Extrapolation from todays business MGPP
of the Groups and core technology roadmaps
Today
Short-term
Medium-term
Long-term
Source Siemens ZT
MGPP Multi-Generation-Product-Planning
35
Research from Today to Tomorrow
Examples from Research Development Now and
Tomorrow
Intelligent Energy Networks withSuperconducting
Components
Fuel Cells for Power Plants and Vehicles
Gas Turbines with Highest Inlet Temperatures
Energy
Computers for Pretesting Manu-factoring
Logistics Systems
Intelligent Sensor Systems for Industrial
Processes
Adaptive Control Systems
Industry
Mobile Multimedia Personal Communication
Teleworking Telelearning
Electronic Marketplace
Communications
Assisted Knowledge ManagementIntelligent Agents
Man-Machine InteractionVoice and Gesture Based
Information Security
Information
Vehicle Electronicsfor Safety and Comfort
Intelligent NetworkedTraffic Systems
Personal TravelAssistance
Transportation
3D Imaging Systems for Diagnosis Surgical
Procedures
High-Speed Networksfor Health Care Services
Non-invasive Therapies
Health Care
GHz Logic ICs and Gbit Memories
MultiMedia Card
Components
Nanoelectronics
FluoreElectrode lessscent Lamps
Ceramic Burners for Metal Halide Lamps
Innovative Lighting Systems
Lighting
Source Siemens ZT
36
Chances by Visions
Visions anticipate future Chances and
Opportunities
Innovations Fields are systematic and
comprehensive Approaches to Visions
Energy
Transportation
Health
Information Communication
Industry Environment
market competition
politics legislation
cultural, social
factors
customers industry consumers government, s
tate, communities ...
industrial structures
environment
economics
technological trends
competitors suppliers
companys divisions
market prospects, technology roadmaps, business
ideas, product services projects
Source Siemens ZT
37
Some Targets for Visions

• Management by Visions Some Examples
• Personalised Communication
• everywhere
• at every Time
• in everyones own Language
• Human centred Use and Management
• of
• Information and Knowledge
• Learning Society
• Virtual Company
• and
• Information centred Enterprise
• Electronic Marketplace

38
Prerequisites for Successful Innovations

• Commitment of Management
• Active Support in Search for and Implementation
  of new Ideas
• Competencies
• Identification and focussing upon Core
  Competencies
• Systematic Approaches
• Introduction of Methods and
  Instruments for easier Creation
• of Ideas and faster Generation of
  Innovations
• Innovative Environment and Team Spirit
• Establishing Success oriented
  Teams
• Promoting motivated and
  co-operating Employees
• Awarding Engagement and
  Responsibility

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Strategic Mission of the Management of Technology
Development and Steering of Innovative Processes
in the Enterprise
Management of Technology integrating Task of the
Management Board that adjust the Creation,
Activation and Preservation of the Potential of
Technologies to promising competitive Advantages.
Defence or Expansion of the current Business
Exploitation of new Business Opportunities
Expansion and Reinforcement of the technological
Competence
Quelle Saad/Roussel/Tiby/Tschirky/Hess/Lang
40
Impacts of Core Competencies
Competence in High Technology is a Core
Competence
Technology

Social Competence
Marketing
(1) Core Competencies open potential Channels to
broad Markets (2) Core Competencies generate the
Visibility of the Advantages of the Products to
the Customer (3) Core Competencies of an
Enterprise can only copied by Competitors with
extremely high Effort
41
The End
We have entered a World of constant Change
where Certainties do not exist and Productivity
in Innovation is becoming as important as
Productivity in Production.
G.
Pinchot The End.