Monthly Archives: September 2009

What is Technology Strategy?

I run a research center called Centre for Technology Strategy at the Norwegian School of Management. Inevitably, the question comes up – what is technology strategy?

In my mind, the question is simple and comes down to two things: The realization that most changes in the world are due to changes in technology, and, hence, it is vitally important for managers to understand how technology evolves and how this evolution impacts their companies.

I like to illustrate this with a diagram of such mind-boggling simplicity that it is almost embarrassing to present it here. On the other hand, it seldom fails to inform when I use it in presentations – and a number of my collaborators through the years like it enough to use it in theirs:


In words: Technology drivers – i.e., changes in how we do things – changes the business environment, which again imposes changes in strategies on companies. Technology strategy aims to enable companies to understand the technology drivers to be able to change their strategies before they are forced to by the business environment.

This is by no means easy. It may be hard to understand what the drivers are – if you were a producer of travel alarm clocks, would you have foreseen the use of cell phones as alarm clocks? And though the drivers may be easy to understand, you may under- or overestimate the time it takes before your business environment changes. Lastly, it may be easy to understand both the change and the timing, but just hard to deal with the change itself. Newspapers and book publishers, for instance, can easily see what is happening to the music industry, understand how the business environment is changing, yet find themselves repeating the errors of the music industry because the changes necessary goes against the norms and values of those of power, as well as their technology and their business model.

To understand technology strategy, of course, you need also to understand the current business environment – in terms of the technology currently used – and how it shapes current strategy. And you need to have an understanding of technology evolution in general and the evolution of technology in your industry in particular. Lastly, you need an understanding of how to change technology inside organizations – something which requires an understanding of not just changing technology, but also organizational structures, incentive systems, and norms and values.

(part I of a series of short and rather irreverent articles on various aspects of Technology Strategy)

Yet another argument for CC books

IMG_3019 I bought Cory Doctorow’s Little Brother sometime this Spring, don’t quite remember where (think it was Amazon). When I read it, I discovered that half of page 198 was torn out. This is rather irritating, especially when you are into the book and would like to continue. Previously, my two solutions would have been: Skip the missing page(s) and continue reading; or exchange the book for a new one (which entails taking a break until the new book is back.)

This time, I just found Cory’s full text on and printed those pages out on my printer. Then I left them in the book. I saved time and kept the continuity, the bookseller saved time and money not having to exchange my book, and the publisher saved the cost of another copy.

Simple, isn’t it?

Quote of the day

Downstairs in a kind of cave is the kitchen, where an Army cook is baking square apple pies by the quarteracre. The floor is so deeply worn that he has to step over some of the high places. His coal stove is roaring, and he has arrived at that quiet hopelessness that cooks get on finally realizing that their work is never going to be finished, that there is no way of feeding a man once and for all.

John Steinbeck, Once there was a war p. 70

GRA6821 Seventh lecture: IT economics – and meeting Microsoft

(October 16, 0800-1045, C2-040)

The seventh lecture will be in two parts. One is a discussion of IT economics, with an assignment to be handed in. The second is a guest lecture and discussion by a senior manager from Microsoft Norway.

First part: IT economics

The relationship between information technology and economics – specifically productivity – is tricky. While most executives and all IT companies will agree that investing in information technology is a smart move, just how much you should invest and what the effect of the investment is is a bone of contention. We will explore these questions through analyzing some data from a well known IT practitioner magazine, and compare what they say with the academic literature. Key here is an analytical assignment which is to be handed in before class.

Read and be prepared to discuss:

  • Hitt, L., & Brynjolfsson, E. (1996). Productivity, Business Profitability, and Consumer Surplus: Three Different Measures of Information Technology Value. MIS Quarterly, 20(2), 121-142. (In Blackboard)
  • The InformationWEEK 500, InformationWEEK, September 1995. (This is for the assignment, and we will discuss this in detail. A tip for the analysis: Focus on the numbers, both those for each industry and those for  (or spreadsheet) to compare across industries. And do remember that the individual technologies discussed in the articles is rather old by now (not that technology optimism has changed in any way….)

Study questions:

  1. What are Hitt & Brynjolfsson’s three measures of information technology profitability — and their conclusions about them?
  2. How do you justify spending money on general technology, such as desktop computers and Internet bandwidth? How should you structure the spending?


(to be delivered into Blackboard no later than October 15, 2009, at 2000):
Answer the following question:

  • Imagine you are a CEO worrying about whether you are spending too much or not enough on information technology. How would the InformationWEEK 500 numbers help you?

For the analysis, here is an Excel worksheet with the numbers. Download the file to your own computer, then analyze it there using Excel or any other software you would want. Note that the numbers and stories are from 1995, so focus on the numbers rather than the technical discussion (though you might note that the language, attitudes and numbers are not very different from what they would be today.) Also note that I will apply the two page maximum limit ruthlessly – that means two pages, nothing more, anything more than that will not even be looked at.

image Second part: Microsoft’s view of the future – a discussion with Petter Merok.

Petter Merok is Director of technology and responsible for business development at Microsoft Norway,. He is also central participant in many ongoing discussions about the future of technology use and development in Norway. He will lead an informal discussion about how Microsoft sees the future – both in business and technology terms.

Please read and be ready to discuss:

  • Sherman, S. P. (1984). "Microsoft’s drive to dominate software." Fortune (January 23): 82-90. (this was assigned to the first class as well)
  • Andersen, E. (2004). Has the Microsoft of Today Become the IBM of the Late ’80s? Ubiquity, Volume 5, Issue 22. Gotta have one of my own in there…
  • Romano, B.J. (2008). "Gates’ big-picture memos", Seattle Times. Gives an idea about changes in strategy in Microsoft, over time.
  • Ray Ozzie, 2008: "Services Strategy Update". Another semi-internal memo giving important indications of Microsoft’s strategic direction.

(For a list of all the classes, see here.)

GRA6821 Sixth lecture: Outsourcing and offshoring

(October 9, 2009, 0800-1045, C2-040)

Outsourcing becomes a more and more common way of providing administrative services, such as IT, HR, accounting and customer services (call centers). In this discussion, we will take a look at outsourcing as a phenomenon and try to understand some of the challenges and possibilities it offers, both for the company outsourcing the work and for the company taking it on.

Please study and be prepared to discuss:

  • Case: Hostile IS outsourcing: The story of ManuFact (We will start by discussing this case.)
  • DiRomualdo, A. and V. Gurbaxani (1998). "Strategic Intent for IT Outsourcing." Sloan Management Review 39(4): 67-80 (Blackboard)
  • Dignan, L. (2003). "Leaping, then looking." Baseline (September): 17-29.  Short discussion of the economic and competitive implications of "offshoring" and the gradual emergence of a global job market for technology worker. (Blackboard)
  • This great article from Wired (written by the indomitable Dan Pink) on various sides of outsourcing to India.
  • Andersen, E. (2002). "Stamp Out Technology Virginity!" ACM Ubiquity 3(30).

Study questions

  • If you are going to pick just one person (or entity), who is responsible for the Manufact situation?
  • Should John take Jim’s offer, and if so, on what terms?
  • Why do organizations outsource? How has their intent changed over time? How does this change the outsourcing industry?

Guest lecture

Carl Christian Malm, Responsible for applications outsourcing at Accenture Norway, will give a presentation on Accenture’s work in outsourcing, focusing on the day-to-day details – how do you recognize customer demand, shape the contract, do the work, handle problems, and so on.