Technology and Business: Strange Bedfellows

The future of the Strategy as defined in the book refers to the definition, planning and achievement of the long-term objectives of the organization. The purpose of a business strategy is to gain a sustainable economic advantage while that of a technology strategy is to gain a competitive edge through technology. Success of a business strategy is directly related to the correct identification of technology required for the business (e.g. product design is a key technology requirement for manufacturing) and correct analysis of the strategic options provided by the existing and emerging technologies.

Strategizing is a creative process while planning should be a systematic process. Effective technology management is based on successfully linking technology and business strategies. The goal of strategic planning is to transform business strategies into core technologies so that change in business direction is reflected in the R&D of the organization. Forecasting of technology leads the way to successful technology planning e.g. Microsoft gained a major advantage when it correctly forecasted the major shift in technology from PC based applications to internet based applications in the 1990s.

Technology planning consists of making decisions that affect the selection of R&D projects, allocation of resources and timetables for successful implementation of strategies. Technology exploitation (how technology can be used to achieve the strategic objectives of an organization) is an integral component of technology strategy. The use of technology to gain a competitive advantage is equally effective for both service and manufacturing organizations. A two pronged approach of focusing on customer satisfaction and technology is a winning combination. e.g. Wal-Mart, the world's largest retailer apart from being customer savvy, has a strong logistics and transportation arrangement.

Companies must use special organizational structures for effective use of technology. Technological innovations can create new markets, expand the existing markets, stretch the scope of an organization and affect the business model of an organization. Breakthroughs like ERP in the field of IT applications are changing the way business is done. Increased globalization means that the role of technology as a differentiator is bound to increase. But superior technologies must be "diffused" in the market at the right time to create a long run advantage and avoid strategic drift.

Today, technology is seen as an integral component of the global strategy for economic growth. It is seen as a key driver of wealth creation. Flexibility and the ability to respond to change through technology is seen as a major competitive advantage in the market today. Competing by means of technology is no longer a matter of choice but of survival in the global marketplace today.

* Contributed by -
Soumya Prakash Mishra,
PGP 2003-2005,
XIM Bhubaneswar.