TVP – Metric 42 Technology Planning

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1. Metric Definition

An overall assessment of the technology plan and the technology planning process.  It is an assessment of the overall portfolio and not a specific project or program within the portfolio.  Performances on key elements are measured against specified criteria, each on a four-point scale.
This metric provides an overall assessment of the technology plan and the technology planning process. Performance on key elements will be measured against specified criteria, each on a 4-point scale, as described below.

Planning Processes

Involvement:

1. Business planning and technology planning are either non-existent or remain superficial, and are not used as a basis for action.
2. Business planning and technology planning are carried out as separate processes, with little or no involvement of the technology organization in business planning.
3. The technology function provides input to business plans and business plans are the basis for technology plans; however, the technology function often remains in a secondary, reactive mode.
4. The technology function significantly impacts business planning, and technology planning is an integral part of the business planning process. Senior technology professionals are involved and provide input to business planning.

Timing:

1. Technology planning is done sporadically, and subsequent plans do not build on previous plans.
2. Technology planning is done periodically in response to organizational needs (for example, explicit demands for planning or for budget preparation).
3. Technology planning is performed on an annual basis and results are reviewed regularly. Plans are iterative, with each successive plan building on the previous year’s plan.
4. Technology plans are dynamic, are used regularly to guide action and decision-making, and are modified periodically based on results and external events.

Internal Communications:

1. Technology plans are not communicated to the R&D/technology organization.
2. Technology plans and related business plans are communicated to and understood by less than half of the technical organization. Members of the business team have some familiarity with the plans.
3. Technology plans and related business plans are communicated to and understood by more than half of the technical organization; members of the organization understand how their programs are supportive of business objectives.
4. Large parts of the technical organization are integrally involved in the planning process; communication, understanding, and implementation are all interrelated.

External Communications:

1. There is minimal communication of technical needs and opportunities outside the immediate organization.
2. Cooperative efforts and discussions with those outside the immediate organization are not done within the framework of the technology plan or in consideration of critical business needs.
3. Members of the technical organization meet sporadically with outside resources to discuss needs identified in the technology plan.
4. Members of the technical organization, under the leadership of the technology director, interact regularly with others outside the organization (including other corporate R&D units, universities, national laboratories, and other technology sources) specifically to address issues highlighted in the plan. Continuing relations and cooperative efforts are founded upon past successes. Where the R&D organization is separate from the business/operating unit formal liaisons or gatekeepers are often appointed to manage the external relationships.

Learning/Improving (Quality)

1. No learning takes place based on results of previous technology plans and associated projects.
2. Some lessons are acknowledged; some corrective actions are taken in response to learnings.
3. The planning process and/or results of individual programs/projects are reviewed in a semi-formal manner; some actions are taken within the organization to improve the process and/or execution of future projects.
4. The planning process and results are reviewed thoroughly and improvements/responses to learnings are carried throughout the organization.

Elements of the Technology Plan

Business Issues

1. Technology programs are not explicitly related to key business needs/strategies.
2. Technology programs are related to business needs in vague terms.
3. Contributions from technology programs are clearly and visibly linked to business success.
4. Technology programs not only contribute to business success but are used as game changers.

Nature of the Markets and Customers

1. The technology plan contains little if any reference to markets and customer needs.
2. The technology plan mentions a few customer needs.
3. The “voice of the customer” is heard in the plan; the market structure and environment are well understood.
4. Current customer needs are well defined and future marketplace needs are anticipated.

Competitors

1. The technology plan contains little if any reference to competitors.
2. The technology plan recognizes some competitors and their positions in the market.
3. Competitive intelligence is reflected in the plan with an understanding of the most important competitive threats, in-kind and not in-kind.
4. Technical program strategies recognize the thrusts of competitors, including their technological strengths and weaknesses. The strategies also consider explicitly potential threats from non-traditional competitors.

Human Resources

1. Staffing needs are only superficially addressed, for example, provided as budget numbers for specific projects.
2. Staffing needs are addressed but not connected with required skills and competencies.
3. The skills and competencies needed to achieve the technology plan are mentioned but not analyzed in detail or with respect to the current organizational staffing.
4. The skills and competencies needed to carry out the technology plan are addressed in the plan, both for the near and longer terms. Gaps are identified and discussed, and a plan to fill gaps is presented.

Contingencies/Alternative Plans

1. No alternatives to the planned programs are presented.
2. The proposed alternatives or contingency plans are not realistic and do not offer real choices.
3. A limited set of alternatives are proposed.
4. Alternatives and contingencies offer real options in the case of changes in resources or major changes in economic or market conditions.

Other Elements of the Plan

1. None of the following are addressed to any extent in the plan: capital productivity, costs, product quality, opportunities for growth in the business, environmental challenges, maintenance/development of (core) competencies, opportunities for breakthroughs.
2. Some of these elements are addressed in the plan.
3. Most of these elements are addressed where they are important to the business.
4. All of these elements are addressed and direct links to technology programs are made.

Core Competency Consideration

1. Core competencies (technology) are not considered part of the planning process.
2. Core competencies are discussed but are not central to the planning process.
3. The planning process defines the required core competencies as well as the plan to develop and maintain them.
4. Core competencies that are already in place are well understood and an important consideration in the planning process. Required competencies are clearly defined, as is a corresponding plan of action to acquire those that are needed and to prune those that are not needed.

Time Frame of Plan

1. 1 year
2. 1-3 years
3. 3-7 years
4. 7-10+ years (may also be framed around the planning cycle)

Content/Documentation of the Plan

1. The plan covers the relevant details and consists of text and data. No effort is made to use visual planning charts.
2. The plan covers the relevant details with backup text and data. Visual planning charts are included.
3. The plan covers the relevant details with backup text and data. An executive summary clearly defines the most important issues.
4. The plan covers the relevant details with backup text and data. The plan is summarized in fewer than 15 slides, which contain visual planning charts that easily and clearly define needs and actions.

Patents/Intellectual Property

1. The plan contains no mention of the value and impact of the patent estate.
2. The plan includes a brief mention of key patents currently held.
3. The patent estate is presented, as are key patents of competitors.
4. The value of current patents is understood and analyzed, leading to a plan to build the estate in critical areas; key patents of competitors are also considered.

Other areas to consider in the planning process:

a) training and skills needed to be developed or improved to do the planning
b) Continuous improvement of the planning process (applying TQM to this process)
c) basis for alignment/resource allocation for all parts of the organization.
d) assuring that plan delivers results — accountability; relation to performance management.

Other areas to be considered as elements of the plan (some may be in other criteria):

a) explicit connection between technology development and sustainable competitive advantage.
b) balancing the portfolio and aligning with other business initiatives
c) identifying and nurturing critical technical capabilities.
d) meeting needs of both external and internal customers.
e) understanding evolution of markets and changes in technology needs.
f) understanding relation of technology and product life cycles. (S curves and technological limits)
g) metrics for measuring implementation of the plan and success of the planning process.
h) time-sequencing of steps for implementation (technology road maps?)

2. Advantages and Limitations

This assessment matrix can provide some common ground for assessing the quality of a process and the result of the planning process. Since a common matrix is being used by a number of firms it provides a way to make some external comparisons. The assessment factors/elements however should be modified to reflect the process and plans for the individual firm.

3. How to use the metric

Those doing the planning and developing plans should use the matrix as a self assessment tool and then focus on areas for improvement.

4. Options and Variations

5. Champion and Contacts.

6. References

“Integrating Technology and Business Planning in IRI Companies” 73 minute video, self assessment matrix, Slides used by speakers in the video, written summary, and bibliography; available from Industrial Research Institute, 1550 M St. NW Suite 1100, Washington D.C. 20005-1708

Adler, P.S. McDonald, D. William, MacDonald, F. 1992. Strategic Management of Technical Functions, Sloan Management Review, Winter, pp.19-37.