1. TECHNOLOGY MANAGEMENT 9a: MANAGEMENT CONCEPTS 5 Technology Portfolio CP Beukman Engineering Management Programme University of Canterbury Issue 2.0 May 1999

2. Research and Development b R&D aims to increase the available basis of skill and knowledge (technology) b Innovation is the change process that affects the core competency of the enterprise by way of technology

3. CORE COMPETENCE & ABILITIES CREATES PRODUCTS AND SERVICES WHICH THE MARKET BUYS AND PAYS FOR SELECTIVE FLOW TECHNOLOGY: SKILL, KNOWLEDGE (KNOW-HOW) SELECTIVE FLOW INNOVATION

4. Portfolio Planning b The purpose of both business and technology portfolio planning typically is to reach the optimum point between risk and reward, stability and growth. b The definition of optimum, of course, varies as widely as the ambitions, competence, vision, and culture of individual companies.

7. Project Portfolio b To build up the technological (R&D) portfolio, one must examine them from a business and technology viewpoint. b Individual projects are evaluated in terms of four key elements:

8. Key project elements: b Strategic purpose b Technological competitive strength b Technology maturity b Competitive impact of the technologies b R&D project attractiveness

13. Scoring individual projects for attractiveness b Inventive merit (platform for expansion) b Durability of competitive advantage b Reward b Probability of technical success b Probability of commercial success b R&D costs to completion or key decision point b Time-to-completion or key decision point b Capital and/or marketing

15. Example: Portfolio Dimensions b Annual R&D project cost b R&D project cost to completion b Probability of success b Technological maturity b Technological competitive strength b Project attractiveness b Competitive impact of the technologies imbedded in the project b Time-to-completion

16. Original R&D Portfolio Dominant Strong Favorable Tenable Weak EmbryonicGrowthMatureAging Technological Uncertainty Increases Technological Uniqueness Increases Technological Competitive Position 14 11 12 1 13 678910 2,3, 4,5 Probability of Technical Success Increases

17. Original R&D Portfolio Outstanding Modest 100%50%0% Fundamental Research Probability of overall success Reward 14 11 12 1 13 6 7 89 10 2,3, 4,5

18. Original R&D Portfolio $ 123>6 Time to Completion (years) Annual Budget 1411 12 1 13 6 7 8 9 10 2,3, 4,5 456

19. Original R&D Portfolio $ BaseKeyPacingEmbryonic Technological uncertainty increases Annual Budget 14 11 12 1 13 6 7 8 9 102,3, 4,5 Competitive impact of Technologies Potential competitive impact increases

20. Original R&D Portfolio Known to company New to company New to world Known to company New to company New to the World Technologies Uncertainty Increases Markets 14 11 12 1 13 6 7 8 9 10 2,3, 4,5 Uncertainty Increases

21. Original R&D Portfolio Dominant Strong Favorable Tenable Weak EmbryonicGrowthMatureAging Technological Uncertainty Increases Technological Uniqueness Increases Technological Competitive Position 14 11 12 1 13 678910 2,3, 4,5 Original R&D Portfolio EmbryonicGrowthMatureAging 14 11 12 1 13A 7 10 3, 4

22. Original R&D Portfolio Outstanding Modest 100%50%0% Fundamental Research Probability of overall success Reward 14 11 12 1 13 6 7 89 10 2,3, 4,5 Revised R&D Portfolio 100%50%0% Fundamental Research 14 11 1 13A 7 10 3434

23. Original R&D Portfolio $ 123>6 Time to Completion (years) Annual Budget 1411 12 1 13 6 7 8 9 10 2,3, 4,5 456 Revised R&D Portfolio 123>6 14 11 13A 7 10 3 4 456

24. Original R&D Portfolio Known to company New to company New to world Known to company New to company New to the World Technologies Uncertainty Increases Markets 14 11 12 1 13 6 7 8 9 10 2,3, 4,5 Revised R&D Portfolio Known to company New to company New to the World 14 11 1 13A 7 10 3 4