Category Archives: Technology strategy

Competing online at Lorange

I have just finished (as a matter of fact, I am writing this from the classroom while the students are taking their exam) teaching a two-day seminar called Competing online at Lorange Institute of Business, located in Horgen, a small town about half an hour south of Zürich in Switzerland. Teaching is normally quite tiring, but this time it was a breeze – firstly because it was only 9 students, secondly because they all had interesting experiences and viewpoints on how to use the Internet and Web 2.0 for business and personal purposes. As a consequence, I could run the class as an informal discussion, with less lecturing and quite a bit of learning for me as well as the students.

The diversity of backgrounds was quite interesting – we had three people that owned their own companies (technical textile manufacturing, logistics, and personal credit), three from pharmaceuticals and health companies, one from sports event marketing, one executive from a hotel company, and, last but not least, Isabella Löwengrip, who with her blog Blondinbella could provide very interesting perspectives on how to establish and promote a business on Web 2.0. She did, of course, blog (here and here and here) and Tweet about the experience, occasionally in real time – and she took the pictures you see here.

Linus Murphy, lively and inspiring CEO of Masterstudies.com, was the main case under discussion after lunch on the first day – and he did a great job talking about the importance of making your company findable on Google. To do this, you have to make sure your content is fresh and not duplicated, that each page is about one thing only (so the search engine is not confused) and design the structure and context of the web site before handing it over to be made pretty by a designer. When most of your traffic is driven by search, you must be both findable and searchable.

Jeff Jarvis on his public parts

(taking notes from a presentation at Harvard Law School’s Berkman Center, December 6, 2011)

(David Weinberger has a much better writeup.)

Jeff Jarvis rake thin, grey-haired, dressed in black and bearded, and has had cancer, but any similarity with Steve Jobs stops there. His latest book, Public Parts, advocates more openness in a time concerned with privacy yet somehow unable to press that “like” button on Facebook.

His key point is that the tools of publicness need to be protected – and though privacy and publicness is not in opposition – and his fear that privacy concerns are misapplied and sometimes dangerous.

When Kodak was invented, there were articles written about “fiendish Kodakers” lying in wait, and the cameras were banned in some public parks. Anxiety about privacy goes back to the Gutenberg press, microphones, video cameras. Society is looking for norms, but legislates to keep the past, in terms of the past.

The tools of making publics: Habermas said public discourse started in coffee houses in the 18th century as a counterweight to government power. It was ruined by mass media. Now we have the tools of publicness, and we get things like Occupy Wall Street. Jeff started (after a few glasses of Pinot Noir) the #fuckyouwashington tag, which spawned a platform with more than 110,000 tweets.

The Gutenberg parentheses: Before Gutenberg, knowledge was non-linear, with Gutenberg it became linear, after Gutenberg it is non-linear and the knowledge we revere is the net. Danish professors arguing that the transition into Gutenberg was hard, and the transition out of it will be equally hard. Web content still shaped as analogues of the past.

Had to understand what privacy is – first take was that it had something to do with control. Came to think that privacy is an ethic. This means that publicness is also an ethic, an ethic of sharing information. Sharing his prostate cancer, including impotence, on the web. Hard to do, but got tremendous value out of it.  Various people contributed to the blog, telling things that the doctors won’t say, etc.

We need to learn from young people how to control sharing. Danah Boyd: COPA requires companies not to keep information about children younger than 13. But more than 50% of 12-year olds had Facebook – “on the internet everyone’s 14.” Sullivan principles (developed for apartheid) may help: Rules for companies to operate in South Africa.

Jarvis propose some principles:

  1. We have the right to connect.
  2. We have the right to speak.
  3. We have the right to assemble and to act.
  4. Privacy is an ethic of knowing
  5. Publicness is an ethic of sharing
  6. Our institutions’ information should be public by default, secret by necessity
  7. What is public is a public good
  8. All bits are created equal
  9. Internet must stay open and distributed

Fear that governments and companies will take this away.

Various questions in the question round – but the discussion didn’t really take off.

Jeff comes off somewhat like his books: Well articulated and with many interesting and well described examples, but I keep looking for some more analysis and less description. More depth, simply, not just a plea that openness is good and we need to develop norms on how to handle it. But the “history of the private and the public” part of his book is very good. And it does make for an interesting read.

Fulfilling the status role of books

Espen Andersen (Photo: Nard Schreurs)In my office at BI Norwegian Business School I have many books, accumulated over the years. In my living room I have even more, having spent time building bookshelves and defending the wall space against family members who think it could be put to better use. And in my basement I have stacks of cartons with even more books, which I do not have the heart to throw out – hey, I might get around to reading the complete works of Hermann Hesse, in German, some day – but not the space to display.

The book collection is nice – I like books, I can remember almost viscerally where most of them are, and often all that is necessary to remember what is in them is just to take them out of the shelf. And they do tell everyone around me that I am a bona fide intellectual, should anyone wonder.

But I (almost) don’t read books on paper any more – I buy them and read them on my Kindle or PC or iPad. Electronic books are searchable, weightless, cheap, accessible and cost nothing to store. But nobody can see how many books I have on my PC or Kindle. Having many books signals status, to the point where there are companies that will fill you bookshelves for you, in any color and style you want, for a fee. The usefulness of books as status signals will diminish over time, however, just as what has happened with CD racks, which you don’t display anymore, unless you have thousands of vinyl records and cross the threshold from music lover to music fanatic. So, what to do?

The Norwegian publishing and bookselling industry, an astonishingly backward group of companies when it comes to anything digital, yesterday introduced a new concept for e-books that, even for them, is rather harebrained. They want to sell e-book tablets where you can buy books not as downloads (well, you can do that, too) but as files loaded on small plastic memory cards, to be inserted into the reader [article in Norwegian]. This preserves their business model (though they can probably stop using trucks and start using bicycles for distribution). According to their not very convincing market analysis, this is aimed at the segment of the book buying market who do not want to download books from the net (but, for some reason, seem to want to read books electronically.)

imageI initially thought I would make a joke about having to replace my bookshelves with neat little minishelves for the plastic cards, when it dawned on me that perhaps we have the solution here – i.e., a model where we could get the accessibility of digital books with the status display of the paper version. Why couldn’t the publishing industry sell you a digital book (for downloading, if you please) bundled with a cardboard book model, with binding and all, to put in your bookshelf? This would look great, allow you to effortlessly project your intellectualism and elevated taste, while avoiding the weight, dust, and (since these books would only need to be a in inch or two deep) space nuisances of traditional books. You could even avoid physical distribution by letting the customer self-print and cut and fold the “shelf-book” in the right format.

You could even electronically link the two, so that you cold pick your cardboard book from the shelf, wave it in the direction of the e-book tablet (using transponder, 2D barcoding or other identifying techniques) and the book would show up in your reader. If you really wanted to show off, you could add a little color coded bar indicated how far you were in each book, much like a download bar for your computer, to be displayed on each book. Moreover, such as book could be lent from one reader to another.

I recently bought Don DeLillo’s Underworld for my Kindle. Imagine if it came with with nice little book spine, leather as an expensive option, with a barcode and a “read” bar as illustrated here…status, spatial memory, interior decoration, and a way to gradually replace the paper library with an electronic one without disruption.

Remember, you saw it here first!

(In case you wondered: Yes, I am being facetious.)

Big data and the study of connections

I read this very interesting article at Om Malik on Broadband, where Dr. Alex Szalay of Johns Hopkins argues that Big Data – the enormously increased availability and analyzability of data as the world increasingly becomes digitized – will mean as much to science as the microscope once did.

It made me think of Douglas Adams’ wonderful lecture on “Parrots, the Universe and Everything.” One of his central points there is that science is changing – from a focus on taking things apart to understand to one where we put them together so that we can watch them interact.

On a smaller scale, I think this is extremely important for businesses, especially those that can be characterized as value networks, i.e. companies whose main value provisioning consists of connecting people and helping them exchange information, goods or money (well, OK then, money is information, I agree, but still.) At present, these companies segment their customers mainly by demographics (age, gender, location, education, etc.) or, for business customers, by size, industry and location. Massive data analysis will allow them to stop segmentation (which is only a representation reducing your market transaction cost, but also providing a less tailored product for the customer) and instead offer services and connections based on which other users each member is connected to and what they exchange.

Imagine instead if your telephone company, bank or insurance company could analyze you in terms of your interactions with others. That would allow the telephone company to group and tailor their services for the customers that create the most traffic, have the biggest impact, prevent the most accidents or in other ways cause desirable changes in behaviors of those around them. This is now done in a very primitive way and after the fact – imagine if you could do it in real time.

Computers taking over: Examples

I am currently thinking about how computers are taking over more and more of what we humans can do, in ways we did not think about just a few years ago. The impetus for this, of course, is Brynjolfsson og McAfee’s recent e-book Race Against The Machine, where the main examples given are Google’s driverless cars, instant translation software, and automated paralegal research. I’ll use this blog post as a repository for examples of this, so here goes:

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FIAT 500 and Structural deepening

One aspect of technology evolution, according to W. Brian Arthur’s excellent The Nature of Technology, is structural deepening: How basic technology adds features over time. Structural deepening is actually one factor which often means we underestimate technology evolution – for instance, a car today costs about as much, in relative terms, as a car did 30 years ago. What you get for your money, however, is something completely different.

A couple of months ago I was walking through the parking garage at the Norwegian School of Management – and I spotted a case of structural deepening in practice. I just had to take a picture or two with my cell phone (which has a camera – an0ther instance of structural deepening, right?):

sep2010 060

The Fiat 500 on the left is from sometime in the 60s, has an engine of about half a liter and a weight of around half a ton. The Fiat Nuova 500 on the right has 2-3 times as much engine, double the weight, is (as can be seen) a lot bigger and also a lot faster. It also has lots more technology – not only headrests, but safety belts, 7 air bags (!), air conditioning, better stereo, steel bars, crumble zones, etc. etc.) It is, supposedly, still considered a small car…

(More pictures after the break)

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Norwegian Air Shuttle: Using IT to lower costs, increase revenue, and start new businesses

(This case was written for an BSG Concours/nGenera report in March 2008, but never used. I found it while writing a report on the Norwegian IT industry, and publish it here because, well, I need a place to put it. And it is interesting – it succinctly exemplifies a company that uses IT for lowering cost (increasing the bottom line), for expanding in its current market (expanding the top line), and for creating new businesses.)

Norwegian Air Shuttle is the fastest growing low-cost airline in Europe. Its growth is built on smart market moves – supported by even smarter IT applications and use.

A Norwegian plane - white paint is cheap

Norwegian Air Shuttle was originally a small airline company leasing planes and crew – called a "wet lease" in the business – to Braathen’s, Norway’s second largest airline. When Braathen’s was acquired by industry leader SAS in 2001, it looked like the game was over for Norwegian – it had funding for less than three months’ operations.

clip_image005Bjrn Kjos, lawyer and former fighter pilot, had agreed to help the company through what everyone thought was going to be a managed bankruptcy. Instead, Kjos sought out new investors – Norwegian fishing fleet owners, accustomed to high risk and equally high rewards. With his background as a pilot and sanguine, jovial personality, Kjos personified opposition to the somewhat bureaucratic and monopolistic SAS and became popular both with his employees, the public and the regulating politicians.

The new company’s strategy was simple: To offer direct flights between city-pairs not served by SAS, and keep costs low through efficient processes and a flexible organization. Kjos was not a proponent of information technology, but knew he needed a CIO, and in 2002 hired Hans Petter Aanby, an experienced IT manager from SAS.

Hans Petter AanbyAanby needed to establish IT as a contributor to the business, and so set out to first harvest the low-hanging fruit. First of all, the company’s distribution costs were too high: Most sales came over the telephone or through travel agents, with average transaction cost of more than $35 per ticket. Aanby moved the whole process online in April 2003, removing anything confusing from the web site. The company was one of the first in the business to have customers print out their own (bar-coded) boarding passes, which simplified check-in and saved boarding time. Eventually, 85% of orders would come over the web, and only 1% through the call center. This was achieved with a small IT department and smart use of small consulting companies.

image Having demonstrated an ability to lower costs, Aanby now, with the title of CIO and EVP of Business Development, set out to increase sales. A new architecture that would allow growth in complexity without growth in costs was proposed to the board in late 2003. Airline prices vary, but it can be very hard for customers to see when it is cheap to fly. Many airlines make it hard for customers to find the cheap flights, but Aanby went the other way, giving the customers a calendar-based view of flights with prices shown. Since flight reservation systems are not set up for this kind of information extraction – each query is treated as a potential booking, thus influencing demand figures – Norwegian had to build their own database of flights and prices extracted from the transaction-oriented Amadeus reservation system. The customers responded enthusiastically, since it made it easy to change travel plans to take advantage of lower prices. The application was sold to Amadeus, and the competition eventually had to follow Norwegian’s lead and provide their own low-price calendars.

As Norwegian expanded (eventually flying more passengers outside Norway than inside,) the next step was to establish a new business out of their customer base and transaction platform: Bank Norwegian, an Internet bank that went into operation in the Fall of 2007. Drawing on a satisfied customer set, an experienced IT capability and a sophisticated, yet lean architecture, Norwegian figures it can take the transaction growth and reliability demands a banking application requires.

Kjos, now a converted IT buff, constantly talks about how Norwegian’s IT infrastructure allows the company to expand without growing costs. In August 2007, with a fleet of 22 airplanes, the company placed an order for 42 new Boeing 737 airplanes, for delivery over a five year period.

Norwegian continues to look for areas where IT can make a difference. The airline industry is extremely competitive, and the game is all about being low-cost, yet effective in how talent is employed. Norwegian consciously trains its employees to be capable of performing many tasks – any flight attendant can also do check-in or reservations, for instance, thus enabling the company to use the labor outside the 600-700 hours in the air regular flight personnel can work.

For Norwegian, the trick has to flood the company with IT support before anyone has had time to hire people. And as Aanby has put it: In Norwegian, there are really only two employee categories that are paid above market average: Pilots – and IT people.

In 2007, Hans-Petter Aanby was rewarded for his efforts by being awarded the title CIO of the Year by the Norwegian IT Magazine Computerworld.no – and Norwegian has continued to grow since, now profitably expanding its business while most of its competitors, particularly the traditional airlines, are struggling.

Record companies lose, artists gain

In early September, two of my M.Sc. students handed in their thesis, which has created quite a stir in the Norwegian music industry. I think this has applicability outside Norway, so here is a translation (and light edit) of the Norwegian-language press release and a link to the full report (PDF, 3,4Mb):

After 10 years of digitalization of music, the average (Norwegian) musician’s income has increased by 66%. As a group, the only losers in digital music seems to be the record companies. This is the conclusion of a M.Sc. study done by students Richard Bjerkøe and Anders Sørbo at the Norwegian School of Management BI in Oslo.

The thesis “The Norwegian Music Industry in the Age of Digitalization” shows that the musicians’ income increase is due to increased income from concerts, various collection agencies and stipends from the government in the period from 1999 to 2009. During the same period, record sales have decreased by about 50%. The fall in income from record sales is less important for the musicians, however, since, on average, they only receive 15% of record sales, whereas they receive on average 50% from concerts and 80% from collection agencies (who collects provisions from radio play and other uses of the artists’ productions.)

– In the interviews we have done with a number of musicians and music producers, the musicians say they are losing money on digitalization, but the numers show that it is the record companies, not the artists, who are losing, says Bjerkøe og Sørbo.

– The fall in record sales also means that record companies are becoming less important as launchpads for new artists, and that records to a larger degree become “business cards” – i.e., a marketing tool – to attract audiences to concerts.

Espen Andersen, associate professor at the Norwegian School of Management, has been the faculty advisor for the thesis. He thinks the results show that artists in the future will have more of their income from concerts and by being played on the radio, TV or Internet streaming services. Musicians will also, to a larger extent, have to take responsibility for their own marketing. The future of the record companies is uncertain and they will need to redefine their role in the music industry.

Facts:

  • Income from concerts has increased, on average, 136% from 1999 to 2009
  • Income from collection organizations such as TONO, Gramo and others has increased 108% from 1999 to 2009
  • stipends and other supports from the government has increased 154% from 1999 to 2009
  • The number of registered active musicians has increased by about 28% during this period
  • All figures have been adjusted for inflation.

For questions, please contact

  • Richard Bjerkøe, +47 9181 8686, rbjerkoe@gmail.com
  • Anders Sørbo, +47 9284 0098, anders.sorbo@no.experian.com
  • Espen Andersen, +47 4641 0452, self@espen.com

Liberating the process followers

I highly recommend attending the following presentation at the Norwegian Polytechnic Society on Wednesday September 29th at 5 pm. In particular, I think anyone associated with creating systems for complex decision making, especially in the public sector, would find it interesting.

Update Oct.1: You will find a video of the talk here.

Innovative systems for public services: From process following to problem solving
Dr. Richard Pawson, Naked Objects Group

image Dr. Richard Pawson is founder of Naked Objects Group, and a former head of Research Services for Computer Sciences Corporation. He has 30 years experience in IT and related businesses, and has given presentations and consulted with companies all over the world. He holds a Ph.D. of computer science from Trinity University, Dublin, Ireland.

In this discussion, he will talk about how new innovative systems can change how case workers in public services do their job, transforming them from process followers to problem solvers. Richard has designed and implemented a large and very successful system for the Irish Department of Social and Family Affairs which, based on a Norwegian idea of object orientation, allows case workers ("saksbehandlere") to handle very complex problem situations under much larger degrees of freedom than previously possible.

Richard is a highly interesting and entertaining speaker with deep insight in the relationship between information technology and organizational issues. You can look forward to an eye-opening perspective on the organizational issues in public services and how innovative and advanced systems can contribute to solving them.

Cases of Norwegian IT

Normally when I teach technology strategy (GRA6821), a term paper is part of the course evaluation. The students typically write about some technology, a technology company, or somesuch, normally in groups of three or less.

This year, things will be a little different. I am part of a research project called A Knowledge-based Norway, where the idea is to investigate various industries in Norway in terms of their knowledge generation – and, by extension, their technology evolution. As a part of this project, we will write case studies on various companies, and that is precisely what the students will do. However, rather than having the students chose the companies themselves, we will provide a list of companies, allowing the students, in pairs, to choose a company to write about. We will, of course, entertain suggestions to which companies to have on this list. Here is a start:

Large IT service companies:

  • Accenture (evolution, role of the Norwegian organization internationally)
  • Atea (evolution, mergers, change in role over time)
  • EDB Business Partner/Ergo Group (these companies are about to merge; topics are evolution, mergers, change in role)
  • IBM Norway (evolution, role of the Norwegian organization internationally)
  • Cap Gemini (large consulting company)
  • ?

Innovative technology companies/research groups

  • FAST/Microsoft Enterprise Search division (evolution, merger, technology impact)
  • Simula Research Laboratory (strong research group sprung out of the University of Oslo)
  • Trolltech (advanced technical programming company acquired by Nokia)
  • Opera (multi-platform browser company, still independent with a growing Asian market)
  • Tandberg (videoconferencing technology company, acquired by Cisco)

Academic/research institutions

  • Institute for Informatics, University of Oslo (grossly expanded technology program, new building)
  • NTNU (Norwegian University of Natural Sciences, Trondheim) (birthplace of many companies)
  • Sintef (research arm of NTNU)
  • Norsk regnesentral
  • College university, Grimstad (cluster anchor for interesting little technology area)
  • ?

Software companies focused on the Norwegian or Nordic market

  • Powel (software company focusing on applications for the energy industry)
  • Mamut (personal/SMB company accounting and tax preparation software)
  • Visma (amalgamated vertical ERP company, successful integration story)
  • SuperOffice (sales support software)
  • ?

Large and important IT projects and IT users

  • Telenor (architecture integration project, globalization of services)
  • DNB Nor (largest Norwegian bank, competes on technology platform and services)
  • Norwegian Tax Authority (pioneer in using digital technology to make tax services easier for the individual citizen)
  • Altinn.no (innovative generalized public interaction platform)
  • ?

Interesting startups/rapidly growing companies/interesting stuff

  • Integrasco (blog sentiment analysis, built on top of Amazon’s cloud platform)
  • Meltwater (global media search company, keeping a low profile)
  • EVO Fitness (health club without visible employees – based on remote monitoring and SMS transactions)
  • QuestBack (Internet-based survey company, now expanding outside Norway)
  • ?

This list will grow as I get new ideas – suggestions are welcome! (And yes, perhaps there is an idea to have something about spectacular computer failures as well…)

GRA6821 Fall 2010 – some pointers

To anyone taking (or thinking about taking) my GRA6821 (Technology Strategy, or whatever the name is) course this fall – here are a few things that, at least at this point, are going to happen:

  • Since there will be many students at the course (about 70 so far) it has been split into two sessions. The course will be on Thursdays in classroom C2-040. The students will be split into two groups (more about that later, I am looking for a good mix of backgrounds), one of which will start at 0800, and one at 1100. The groups will alternate every week. Teaching will be case-based, meaning that you as a student have to show up, have a name card, and be in the same seat for every class.
  • For some lectures, classes may be merged (for instance, if we have a guest lecturer, the first class may start an hour later, the second an hour earlier – and the guest lecturer will not have to do the same talk twice).
  • We will have a couple of "special" classes, so far two are relatively confirmed:
    • One (tentatively scheduled for September 16th) will involve the iAD project, an advanced search technology research project hosted by FAST/Microsoft Enterprise Search. Our visitors will be a team of researchers from UCD/DCU Ireland, demonstrating video search on Apple iPads. As part of the program, students will participate as experimental users of the system.
    • The second, probably towards the end of September, will involve McKinsey, the consulting company, with discussions about consulting in a technology-rich environment. McKinsey has a global practice of "business technology" and will use expertise from that area in an excercise involving technology case analysis.
    • Possibly we will have other, similar events. And definitely some exciting guest lecturers.
  • For those of you wishing to prepare early, take a look at the previous courses arranged (last year’s here). The two main books (Information Rules and The Innovator’s Solution) are available in paper and electronic form from many sources, and a good idea might be to get at them early and read them over the summer. The other literature will be either from web sources or made electronically available via BIs new learning platform, It’s Learning (more about this later) or another platform.
  • Evaluation will, as usual, be a combination of classroom participation, smaller assignments during the course, and a final paper. New this year is the form of the final paper – this will be a case description of a Norwegian technology company, which the students can chose from a list (provided later) and written up in a specified format. These case descriptions will go in as research material for the project "A Knowledge-based Norway", preferably under the "information technology" part study. They will by students in pairs and delivered in a collaborative context, using some form of social software such as Ning, WordPress, Google Docs or Origo.

I am very much looking forward to an course that hope and think will be fun, interesting and useful both to take and teach. And until August 19th, I wish you all a very good summer!

Stephen Wolfram’s computable universe

I love Wolfram Alpha and think it has deep implications for our relationship with information, indeed our use of language both in a human-computer interaction sense and as a vehicle for passing information to each other.

In this video from TED2010, Stephen Wolfram lays out (and his language and presentation had developed considerably since Alpha was launched a year ago) where Alpha fits as an exploration of a computable universe, enabling the experimental marriage of the precision of mathematics with the messiness of the real world.

This video is both radical and incremental: Radical in its bold statement that a thought experiment such as computable universes (see Neal Stephenson’s In the beginning was…the command line, specifically the last chapter, for an entertaining explanation) actually could be generated and investigated is as radical as anything Wolfram has ever proposed. The idea of democratization of programming, on the other hand, is as old as COBOL – and I don’t think Alpha or Mathematica is going to provide it – though it might go some way, particularly if Alpha gains some market share and the idea of computing things in real time rather than accessing stored computations takes hold.

Anyway – see the video, enjoy the spark of ideas you get from it – and try out Wolfram Alpha. My best candidate for the "insert brief insightful summary research" button I always have been looking for on my keyboard.

Towards a theory of technology evolution

The Nature of Technology: What It Is and How It Evolves The Nature of Technology: What It Is and How It Evolves by W. Brian Arthur

My rating: 4 of 5 stars

Arthur sets out to articulate a theory of technology, and to a certain extend succeeds, at least in articulating the importance of technology and the layered, self-referencing and self-creating nature of its evolution.

The two main concepts I took away were the layered nature of technology, consisting of these three points:

  1. Technology is a combination of components.
  2. Each component is itself a technology.
  3. Each technology exploits an effect or phenomenon (and usually several)

Secondly, Arthur lays out, in four separate chapters, the four different ways technology evolves, as summarized on page 163 (my italics added):

There is no single mechanism, instead there are four more or less separate ones. Innovation consists in novel solutions being arrived at in standard engineering – the thousands of small advancements and fixes that cumulate to move practice forward. It consists in radically novel technologies being brought into being by the process of invention. It consists in these novel technologies developing by changing their internal parts or adding to them in the process of structural deepening. And it consists in whole bodies of technology emerging, building out over time, and creatively transforming the industries that encounter them. Each of these types of innovation is important. And each is perfectly tangible. Innovation is not something mysterious. Certainly it is not a matter of vaguely invoking something called “creativity.” Innovation is simply the accomplishing of the tasks of the economy by other means.”

I liked the book for its ambition, view of technology as something that evolves, and clear-headed way of thinking about and expressing a beginning grand theory. The concepts are intuitive and beguiling, but I did miss references to – and attempts to build on, or differentiate itself from – other valuable concepts of technology, such as sustaining vs. disruptive, competence-enhancing vs. competence-destroying, architectural vs. procedural, and so on. There is a lot of research going on in this area – we are about to break up the formerly black and mysterious box called innovation and show that it really comes down to subcategories and the interplay of quite understandable drivers. Arthur’s contribution here is significant – but it is, at least the way I read it, the way of the independent thinker who would have a lot more influence if some of the language and some of the categories were a bit closer to, or at least distinctively positioned in relation to, what others think and say.

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The skinny on the economic effects of IT

Wired for Innovation: How Information Technology is Reshaping the Economy Wired for Innovation: How Information Technology is Reshaping the Economy by Erik Brynjolfsson

My rating: 4 of 5 stars Erik Brynjolfsson took a look at the IT productivity paradox in the early 90s and decided to sort it out – and he did, by and large, by collecting prodigious amounts of data and tirelessly analyze them to tease out what everybody suspected but could not show empirically: That information technology contributes enormously to increases in productivity, innovation and welfare.

This short and to the point book gives an excellent overview and guide to the research on the economic effects of information technology. Each chapter has pointers to more reading, good examples, concludes with avenues for further research. I will use this as an assignment for my technology strategy students – rather than giving them a few articles, they might as well read the whole book.

(Also available through Google Booksearch. Full notes below the fold.)

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Reflections on Accenture’s Technology Lab

I am writing this from Accenture’s Sophia Antipolis location, where I am visiting with a group of executive students taking a course called Strategic Business Development and Innovation (the second time, incidentally, last year’s notes are here). Much of this course is around how to use technology (in a very wide sense of the word) to do innovation in organizations. To turn this into practice, my colleague Ragnvald Sannes and I run the course as an innovation process in itself – the students declare an innovation project early in the course, and we take them through the whole process from idea to implementation plan. To further make this concrete, we collaborate with Accenture (chiefly with Kirsti Kierulf, Director of Innovation in Norway) to show the students some of the technologies that are available.

Accenture Technology Labs is a world-wide, relatively small part of Accenture’s systems integration and technology practice, charged with developing showcases and prototypes in the early stage where Accenture’s clients are not yet willing to fund development. While most consulting companies have this kind of activity, I like Accenture’s approach because they are very focused on putting technology into context – they don’t develop Powerpoints (well, they do that, too) but prototypes, which they can show customers. I see the effect on my students: I can explain technology to them (such as mobility, biometrics, collaboration platforms) but they don’t see the importance until it is packaged into, say, the Next Generation Bank Branch or an automated passport control gate.

Making things concrete – telling a story through hands-on examples – is more important than what most companies think. When it comes to technology, this is relatively simple: You take either your own technology, if you are a technology provider, and build example applications of it. If you are vendor-agnostic, like Accenture, you take technology from many vendors and showcase the integration. If your technology is software-based, or consists of process innovations, then you showcase your own uses of it. Here in Sophia we have seen how Accenture uses collaboration platforms internally in the organization, for instance. (Otherwise known as eating your own dog food.)

Having a physical location is also very important. At the Norwegian School of Management, we have a library that we like to showcase – a "library of the future" where the students have flexible work areas, wireless access to all kinds of information, in an attractive setting. This looks nice on brochures, but also allows us to highlight that the school is about learning and research, and allows us to tell that story in a coherent manner. I see Accenture as doing the same thing with their labs – they develop technology, but also showcase the activity and its results to the rest of the world. The showcasing has perceived utility, generating the funds and managerial attention (or, perhaps, inattention) necessary to sustain the prototype-producing capability.

Quite a difference from slides and lunch meetings, I say. And rather refreshing. An example that more companies should follow.

GRA6821 Eleventh lecture: Search technology and innovation

(Friday 13th November – 0830-about 1200, room A2-075)

FAST is a Norwegian software company that was acquired by Microsoft about a year and a half ago. In this class (held with an EMBA class, we will hear presentations from people in FAST, from Accenture, and from BI. The idea is to showcase a research initiative, to learn something about search technology, and to see how a software company accesses the market in cooperation with partners.

To prepare for this meeting, it is a good idea to read up on search technology, both from a technical and business perspective. Do this by looking for literature on your own – but here are a few pointers, both to individual articles, blogs, and other resources:

Articles:

  • How search engines work: Start with Wikipedia on web search engines, go from there.
  • Brin, S. and L. Page (1998). The Anatomy of a Large-Scale Hypertextual Web Search Engine. Seventh International WWW Conference, Brisbane, Australia. (PDF). The paper that started Google.
  • Rangaswamy, A., C. L. Giles, et al. (2009). "A Strategic Perspective on Search Engines: Thought Candies for Practitioners and Researchers." Journal of Interactive Marketing 23: 49-60. (in Blackboard). Excellent overview of some strategic issues around search technology.
  • Ghemawat, S., H. Gobioff, et al. (2003). The Google File System. ACM Symposium on Operating Systems Principles, ACM. (this is medium-to-heavy-duty computer science – I don’t expect you to understand this in detail, but not the difference of this system to a normal database system: The search system is optimized towards an enormous number of queries (reads) but relatively few insertions of data (writes), as opposed to a database, which is optimized towards handling data insertion fast and well.)
  • These articles on Google and others.

Blogs

Others

Longer stuff, such as books:

  • Barroso, L. A. and U. Hölzle (2009). The Datacenter as a Computer: An Introduction to the Design of Warehouse-Scale Machines. Synthesis Lectures on Computer Architecture. M. D. Hill, Morgan & Claypool. (Excellent piece on how to design a warehouse-scale data center – i.e., how do these Google-monsters really work?)
  • Weinberger, D. (2007). Everything is Miscellaneous: The Power of the New Digital Disorder. New York, Henry Holt and Company. Brilliant on how the availability of search changes our relationship to information.
  • Morville, P. (2005). Ambient Findability, O’Reilly. See this blog post.
  • Batelle, J. (2005). The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture. London, UK, Penguin Portfolio. See this blog post.

GRA6821 Ninth lecture: Software development

October 30, 2009, 0800-1045

(This is a temporary entry – there will be more description and perhaps more literature later….)

Creating technology is far from easy – specifically, creating software involves a number tools and techniques that are crucial to overcome the fact that systems are complicated, abstract, and involves interdependencies with many other systems. To understand this we will hear from some of the most experienced software engineers and software project managers in Norway.

image Our guest lecturers on October 30 will be Dalip Dewan, Senior Vice President of Technology, and Rune Steinberg. Both work at Visma, one of the largest software companies in Norway.

Dalip Dewan has a very interesting background, has built large systems and been responsible for the design and building of software platforms to facilitate consolidation and integration of acquired software companies under the Visma umbrella. He is an excellent speaker and a very demanding discussant – come prepared!

image With Dalip will be Rune Steinberg, a computer scientist who has collaborated with Dalip on the development of software engineering and management methods for more than 10 years.

I can promise an exciting class on how to manage software development, particularly integration of many systems, as well as real-world experience on how to manage the people that make the systems.

Read the following:

GRA6821 Eight lecture: Disruptive technologies

(October 23, 2009, 0800-1045, C2-040)

Disruptive technologies (later changed to disruptive innovations) has become something of a buzzword – you can hardly hear of a new technology or service that isn’t branded as disruptive these days, especially if it also makes use of other spiffy technologies and concepts such as cloud computing and Web 2.0.

In this lecture, we will look into the practicalities of disruptive innovation, in the context of a case of a company – Sonosite, which produces a technology that can be brought to market in several different ways – each with its own set of possibilities and difficulties. Technology strategy can be simple in theory and very hard to do in practice, as you will see when you read and analyze the case.

On a more administrative note – this is the date when I expect you to start thinking, in writing, about your term project and the paper it is supposed to result in. I have made available a Google document where you can write in your suggested term paper topic and group – and make comments on your colleagues’ efforts. Please edit this document before 2000 on October 22.

Please read and be prepared to discuss:

  • Chapter 7 (versioning) in Shapiro and Varian
  • Utterback, J. M. (1994). “Chapter 7: Invasion of a stable business by radical innovation” Mastering the Dynamics of Innovation. Boston, MA, Harvard Business School Press.
  • Most of the Christensen & Raynor book
  • Clayton M. Christensen, Stephen P. Kaufman, and Willy C. Shih: Innovation Killers: How Financial Tools Destroy Your Capacity to Do New Things, Harvard Business Review, January 2008
  • Case: Sonosite: A View Inside

Recommended literature:

  • The whole of Utterback’s book
  • Watch this video from MIT, seeing Clayton Christensen teaching live.

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:

image

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)