Accessing External Sources of Technology1

8/4/2019 Accessing External Sources of Technology1

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Accessing External Sources ofTechnology

Submitted by:Siddharth sahu

Shashank sameer


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Summary

Main purpose of this presentation is on the

process of:

Finding

Evaluating

Acquiring

InternalizingUseful knowledge from external sources to

diversify current business and technology.


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Brief Introduction

Interest in capturing External technology is clearly

rising within the R & D management community.

Companies are exploring many forms of business

relationships with external technology sources.


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Increase in interest

Demand1. Increased global competition.

2. Increasing pressure on operatingmargins and costs.

3. Desire to pursue technology andbusiness development options ina risk sharing manner throughcollaboration.

4. Reports from industry peers ontechnology sourcing success arehelping to create greaterinterests.

Supply1. Rapid growth in scientific

and engineering technology iscreating new and usefulsources of technology and

innovation.

2. Availability of venture capitalin high-technology areas suchas bio-technology n software.

3. Increasing pool of displacedtalents due to downsizing andre-engineering.


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Increase in interest is leading r & d community

to experiment with many forms of business

relationship.


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Problems encountered

Unclear strategic objectives and priorities.

Fluctuating commitment and resources.

Unclear organizational structure

Limited overseas presence

Finding promise targets

Properly evaluating technical and commercial merits ofidentified targets.

Coordinating needed cross-functional team efforts.

Negotiating mutually satisfactory agreements.

Generating/managing sufficient business interests.

Overcoming not invented here attitude of staff.

Successful integration of new technology.


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Root causes for problems

Technology sourcing is not viewed and managed as a strategic

business process.

Management fails to maintain a constancy of purpose overtime

Unequal emphasis is placed on the various stages of the

process

Issues related to linkages, capabilities, values and attitudes are

inadequately appreciated and addressed.


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Model of sourcing process


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1. Defining business needs and benefits

Practices and tools that helps in identifying benefits derived from external sources of

technology are as follows:

Survey of ongoing sourcing activities within the company.

Questionnaire soliciting inputs from managers regarding their technology needs that areunmet from internal sources .

Follow-up interviews with managers to ascertain their level of interests to sponsor a

structures and comprehensive program.

Briefing paper, summarizing the results of the foregoing, shared with all managerswhich will be critical for business success.


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2. Developing an overall game plan

Helps in identifying and defining :

Scope

Approach

Resources

Internal cross-functional linkage

Cross-organizational linkages

Contd.


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Challenges involved/faced with game plan

I. To narrow the scope of the search effort for business needs and technology sources

for these needs


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I. To anticipate and prepare for the types of business relationship the corporation

would pursue under various sourcing scenarios.

examples :-

1. What kind of business relationship it prefers that directly within the core

interests.

2. Whether to buy the technology or would consider an strategic alliance.

Two considerations that are important for developing game plan are :-

1. Nature of technology being sourced

2. Nature of market it is likely to serve


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3. Planning the coordination of organizational responsibilities and linkages

Basic questions :-

1. Should r & d lead or support the sourcing effort?

2. How will all the process be coordinated?


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3. Organizing the search effort

Includes briefing of all the individual and establishing necessary support infrastructure.

Various approaches used for conducting searches are as follows :-

1) One or more dedicated units are created with full-time staff and managers. often

used in large companies. For example pharmaceutical industry.

2) No formal organization is established. All individuals are encouraged to identify

promising opportunities as a normal part of their external networking

responsibility. Used mostly by small companies because of resource constraints.

3) One or two individuals are made responsible for systematically monitoring the

literature, conducting exploratory assessments and keeping informed through

bulletins, reports, meeting etc. for examples director of university.

4) Temporary task team is created to search for specific targets in one or moretechnology or business areas because of competitor or new development in core

technology.


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4. Conducting search-and-find activities

Identification of promising opportunities is the successful endpoint for this phase.

The IRI group are particularly interested in the following practices :-

1. Use of specialized commercial database on academic researchers and their

area of expertise.

2. Use of government reports and database on technology available for

transfer from labs.

3. Increasing the number of days spent at university for each recruiting trip

and exploring potential sources of innovative technology.

4. Establishing contacts with venture fund manager.

5. Use of networks to publicize corporation interest in technology sourcing.

6. Use of expert consultants for specific geographies and technologies.

7. Leveraging internal diversity to access foreign sources and technology.

8. Establishing long-term relationship with selected university/researchers and

making them an integral part of the firms strategic programs.

9. Participating in non-competitive pool-funding of specific technology

development.

10. Regular contacts with major customers, suppliers and large corporations


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Management must regularly reviews progress and problems

Keep track of scope and priorities

Provides support for the effort

Quick success


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5. Evaluating opportunities and confirming business fit and

interests

Helps in evaluating technical and commercial merits of identified opportunities and

confirming cross-functional and cross-organizational buy-ins within the corporation.

Only after successful completion of this stage that the negotiation for business

relationship begins

Some of the good industry practices as identified by IRI are as follows :-

1. Evaluation of technical merits and uncertainties should involve technologists

from specific part of the company or experts should be brought from outside.

2. Evaluation of commercial merits should involve cross-functional and cross-

organizational teams under the leadership of business units. The evaluation

should explicitly address how and when the technology should be integratedinto business. How business would stay engaged with any further development

efforts.

3. Team of experts should visit source organization and get understanding of its

true capabilities and gain familiarity with its culture.


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The foregoing practices are particularly relevant when a major new product or

technology is being evaluated for acquisition.

The situation is less complex when primary beneficiary is the R&D organization

itself.

A strong involvement from business side is not essential to decision making.

For example:- acquisition of new scientific or engineering tools is often

responsibility of R&D management.


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6. Negotiating and finalizing agreements

Conducting negotiations using a cross-functional team approach and arriving at

mutually satisfactory technical, commercial and legal agreements that clearly

define expectations, roles and end points.

Some of the good practices that can help in reducing delays and frustration

during negotiations are as follows:-

1. Knowledge of the totality of the companys relationships with the source can

provide a strategic lever during negotiations and help develop a genericmodel for future interactions

2. Use of experienced negotiators or train members in negotiating skills

3. Before bringing lawyers for final negotiation it is often helpful to conduct

preliminary technical and business discussion.

4. Clear understanding of other partys gains, expectations, strengths and

limitations

5. Following win-win agreements over win-over


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6. The final agreement must define in details each partys expectations and

responsibilities and expectations ; success criteria for each partys

contributions and for the combined effort; technical and business

uncertainties; financial and commercial risks; specific work elements;

ownership of past and future intellectual property.

7. A confident and flexible approach to negotiations helps in avoiding stalemate

and helps in reaching to agreement.


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7. Working together and achieving success

This phase mainly aims at successful integration of the acquired technology

into the mainstream business processes of the corporation or timely

termination of unproductive partnerships.

Practices involved in this process are as follows:-

1. An effective manager should be appointed to lead the collaboration.

2. Informal and formal exchange of people

3. Credits of progress should be shared between the partners and blame for

problems should not imposed upon one party.

4. Close interaction between engineering, manufacturing and marketing functions

should be maintained to ensure cross-functional ownership of the alliance and

for the smooth assimilation of technology.


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8. Ensuring organizational learning and improvement

It achieved by capturing insights from successes and failure in each stage andincorporating such lessons into a process of continuous organizational learning

and improvement

1. Formal team meetings should be held after each phase of the process to

capture learning's

2. The lessons and recommendations should also be shared with colleagues in

R&D and relevant business units.

3. When a new collaboration is about to begin, the team and its leader should

review the lessons from the past successes and failures.


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Conclusion

For success in sourcing of technology a planned approach is required.

Documents

Accessing External Sources of Technology1