Chapter 11 - TM-Functions - Planning and Forecasting

Course Contents: TM-Functions - Planning and Forecasting: Nature of Planning, The

Foundation For Planning, Planning Concepts, Forecasting, Strategies For Managing Technology.

Contents
Chapter 11 - TM-Functions - Planning and Forecasting ................................................................ 1
Introduction ................................................................................................................................. 1
Technology forecasting ............................................................................................................... 3
Classification of Forecasting Techniques ................................................................................... 4
Numeric Data based Technological Forecasting Techniques ................................................. 4
Judgment Based Technological Forecasting Techniques ....................................................... 4
Technology planning .................................................................................................................. 5
Key Components of a Technology Plan ................................................................................. 6

Introduction

The capacity of implementing technological change rapidly is becoming an ever more crucial
condition for the successful operation of a business. Sophisticated technology management
structures have long ceased to be a luxury. For this purpose it is necessary to build, nurture and
protect technology skills and complement them with management skills. Technology
intelligence, technology strategy, technology know-how, technology planning and technology
assessment systems must be implemented and reinforced with appropriate processes and
structures to establish an efficient technology management. But, the challenge for companies is
to find the most promising solutions to crucial problems:

 Which technologies are relevant for the company?

 Which technological developments could and should companies try to accelerate?
 How important are the technologies which are already applied?
 Which technologies will the company require to manufacture its product range of the
future?
 How can companies use their technologies more efficiently?

Technology Planning & Forecasting address such questions and provide a feasible solution. In
fact, the purpose of any type of forecasting and the proper role of the forecaster is to assist the
 contemporary decision-makers in the choosing of policies and making of plans that are most
promising. Technological forecasting provides information about the direction and rate of
technological changes. It uses logical processes to generate explicit information to help
industry and government anticipate practical, ecological, political, and social consequences of
developments in technology. There are four elements in a technological forecast (Martino,
1983):
1. A time horizon.
2. A specific technology.
3. Some parameters to the technology.
4. A probability statement about the outcome.

In the context of Business Firms:

• Establishing technical parameters and performance standards for new products and
processes.
• Augmenting new product development efforts as well as improvement of existing
products.
• Enabling better timing for new technology introduction and facilitate ‘take-to-market’
strategy formulation.
• Aiding prioritization of research programmes and identification of techno-scientific skills
required for the same.
• Identifying major opportunities and challenges in technological environment and offering
guidance for technological planning.

In the National Context:

• Developing technological competencies so as to meet global competition and
international trading imperatives.
• Planning for creation of sustainable comparative advantages in select technological thrust
areas.
• Planning for the well-being of citizens with the aid of technological innovations.

One of the main aspects of Technology Forecasting is its communication aspect. Technology
Forecasting (TF) initiates and fosters the communication between various communities such as:

• Science and science (inter-disciplinary fields)

• Science and Technology
• Industry and politics
• Technology and public administration
• Technology and the general public.

Technology forecasts can be a short, medium or a long-term exercise. Short term forecasts are of
usually a year or less, might typically deal with a single technology. Medium-term forecasts
might cover a 2-10 year period. Long-term forecasts cover 10-20 years - a time horizon long
enough for totally new technologies to emerge. Longer the time frame, tougher it is to predict
what is in stock for the future pertaining to technology changes. Sometimes, forecasts misfire
because of a fascination of ones own technology and also due to the enthusiasm it generates
among market analysts and magazine writers. A classic example is the bold forecast that NASA
made regarding the huge sun-reflecting satellites to illuminate night-shrouded areas of the earth
which they predicted would be possible by the mid-1970s. Such forecasts with faulty timelines
can be totally worthless to corporate planners, and worse they can turn into money pits. This
brings into focus the need for employing accurate technology forecasting methods. The most
appropriate choice of forecasting method depends on:

• What is being attempted to forecast

• Rate of technological and market change
• Availability and accuracy of information
• The planning horizon
• The resources available for forecasting.

Technology forecasting
According to Stanton Technological forecasting is “the process of predicting the future
characteristics and timing of technology. When a possible, the prediction will be quantified,
made through a specific logic and will estimate the timing and degree of change in technological
parameters, attributes and capabilities”.

Before discussing the technology forecasting let us discuss an important model very useful for
forecasting is scurve of technological progress. The time invention period is characterized by a
period of slow initial growth. This is the time when experimentation and initial bugs are worked
out of the system. The technology improvement period is characterized by rapid and sustained
growth. The mature – technology period stats when the upper limit of the technology is
approached and progress in performance slow down. This is when technology reaches its natural
limits as dictated by factory such as physical limits.

This model of s-curve is also known as the technology life cycle helps to know about the life
stage of the technology
Classification of Forecasting Techniques
Forecasting Techniques are mainly classified into two types
1. Numeric data-based Technological forecasting Techniques
2. Judgment Based

Numeric Data based Technological Forecasting Techniques

Numeric data based forecasting extrapolates humbly by generating statistical fits to historical
data.

Trend Extrapolation
To extrapolate is to in per the future feature from post. It can be distinguish between four
approaches with the use of trend extrapolation.
1. Statistical Curve fitting: This method is applicable to forecasting functional capabilities.
Statistical procedures fit the post data to one or more mathematical functions such the past
data to one or more mathematical functions such as linear, logarithmic, Fourier or
exponential.
2. Limit Analysis: Ultimately, all growth is limited and there is an absolute limit to progress,
either recognized or unrecognized sooner or later, projects must reflect the fact that
improvements may get close to this limit but cannot exceed it.
3. Trend Correlation: At, times one technology is a precursor to another. This is frequently
the case when advances made in the pre-cursor technology can be adopted by follower
technology. When such relationships exist, knowledge of change in the precursor
technology can be used to predict the course of the follower technology, as far in future as
the lag time between the two.

4. Multi Trend Correlation: Occasionally, a follower technology is dependent on several

precursor technology rather than on a single precursor. In such cases, the follower is
usually a composite or aggregate of several pre cursors. Fitted combinations of the
precursors may act to produce change in the follower, but more often the combinations are
not fixed and the precursor inputs vary in both combinations strength.

Judgment Based Technological Forecasting Techniques

Judgmental forecasting may also be based on projections of the past, but information sources in
such models rely on the subjective judgments of experts.
 1. Monitoring: Monitoring is the process of scanning the environment for information about
the subject of a forecast. It is not really a forecasting technique, but rather a method for
gathering and organizing information. The sources of information are identified and then
information is gatherer, filtered and structured for use in forecasting.
2. Delphi Method: The bask known of the various judgment approaches to technological
forecasting, the Delphi Method uses a panel of individuals who make anonymous,
subjective judgments about the probable time when a specific technological capabilities
will be available. The results of these estimates are aggregated by a process administrator
and feed back to the group, which then uses the feedback to generate another round of
judgments.
3. Scenarios: Scenarios are sets of snapshots of some aspects of the future and / or future
histories leading from the present to the future. The scenario set encompasses the plausible
range of possibilities for some aspect of the future.

Technology planning
Technology planning is the process of planning the technical evolution of a program or system
to achieve its future vision or end-state. Technology planning may include desired sponsor
outcomes, technology forecasting and schedule projections, technology maturation
requirements and planning, and technology insertion points. The goal is a defined technical
end-state enabled by technology insertion over time. Note that sometimes this is referred to as
"strategic technical planning" (STP) applied at a program level, although the preferred use of
the STP term is at the enterprise or portfolio level [1]. Followings are the key steps of
technology planning:
• Forecast the technology
• Internally owned and external technologies
• Analyze and forecast the environment
• Focus on analysis of opportunities and threats
• Analyze and forecast the market/user

Technology planning is a central component of corporate business planning. It is needed both

at the corporate level and at the strategic business unit level. An effective technology planning
should be:
 Strategic instead of ad-hoc
 Well integrated into organization and its users
 Active instead of reactive
 Create a robust technology infrastructure
 Can still be opportunistic: Take best advantage of opportunities.

There are three important components of Technology planning:

1. People: Assemble a team who will be involved in planning.
2. Process: Devise a planning process.
3. Plan: Provide a planning process framework and Initiate a working-document technology
plan.
Once you’ve built your team and explored your goals and the potential for using technology in
your tech strategy, you are ready to start looking at the nuts and bolts of technology
management. While technologies can change quickly, your strategies are likely to remain much
more constant. Your plan will need to be agile in addressing the implementation of new
technologies, and yet built on the solid foundations of your strategy. You can’t have any success
without devising a good planning process. Adaptable and flexible planning process is the key to
a successful technology management. A technology plan provides the guidance to evolve and
mature relevant technologies to address future mission needs, communicate vital information to
stakeholders, provide the technical portion of the overall program plan (cost and schedule), and
gain strong executive support. It should be a basis for an ongoing technology dialog between the
sponsor and systems developers. Don’t gamble that your plan will be implemented exactly in on
time and on budget: build in some cushion.

Key Components of a Technology Plan

A technology plan provides the guidance to evolve and mature relevant technologies to address
future mission needs, communicate vital information to stakeholders, provide the technical
portion of the overall program plan (cost and schedule), and gain strong executive support. It
should be a basis for an ongoing technology dialog between the sponsor and systems developers
and serves as the roadmap for satisfying the gaps over time to achieve the end-state.

Technology plan is a key enabler for the systems engineering function. Based on the future
mission or business needs, it defines a desired technical end-state to evolve toward. Because that
end-state may not be achievable with current technology, it is important to determine which
technologies are available now; which technologies are in development, including their maturity
levels and which technologies do not yet exist. This helps influence an investment strategy that
can focus on and push the state of the art, and it helps identify requirements that are not
achievable at all or may be cost prohibitive.

Technologies requiring further investment and maturation should be assessed as part of the
technical planning process. Appropriate risk should be assigned to technologies assessed as
immature, with the need for concomitant mitigation plans. Technologies that have been in the
research and development (R&D) phase for an extended period (over five years) should be
assessed for the maturation trend to determine if additional investment would significantly
improve the maturity.

At a minimum, the plan should include identification of all technology being brought to bear for
the solutions, the maturation and trend of applicable technologies (forecast), insertion points,
required investments, and dependencies.

The process of developing and implementing a technology plan should include the following
activities
 Evaluate the environment for innovative uses of technology. What is changing in the
environment that needs to be taken into account or can be exploited? Where industry
headed and what is its technology roadmaps?
 Define desired results. Where does the organization want to be within a planning
horizon, usually 5-10 years? Envision the future as if it were today, and then work back
to the present.
 Identify the core technologies needed for meeting the vision and focus on those first.
Assess the risks for maturation and focus on investment and mitigation. If the risk is very
high, the choice is to wait and depend on the "bleeding edge," or embark on a serious
investment program. The criticality of the technology and/or mission drives this choice. If
it is indeed a core technology and critical to the success of achieving the end-state,
significant investment will need to be applied to buy down the risk. One example of this
is the government's choice to invest heavily in cybersecurity.
 Identify the remaining technologies applicable to the mission or business area end-
state. But, don't become enamored with technology for technology's sake! Keep it simple
and focused on the end-state.
 Establish a quantifiable feedback system to measure progress. Define what must be
done and how it will be measured to determine progress. Define measures of success to
gauge whether the implementation of the plan is progressing successfully. Adjust the plan
accordingly. Measuring return on investment for those technologies requiring maturation
can be challenging; make allowances for failures depending on the assessed risk.
 Assess the current state of the organization implementing the plan. Are resources
(staff, funding) and processes in place to effectively implement the plan? Are the required
skills available?
 Develop tactical plans with measurable goals to implement the strategy.

 Form the roadmap. Develop the phasing, insertion points, associated R&D investments,
work plans or packages, and sequence the activities within each functional and major
program area in the tactical plan to form the roadmap. Allocate resources and tasks and
set priorities for action during the current year.
 Assess the life-cycle costs of technology. Take care not to underestimate the life-cycle
cost of technology. This can be difficult. Industry investments in new technology tend to
be closely held and proprietary. Often, the full product or prototype is not made visible to
the sponsor until it's ready for sale or deployment. So, usually there is a lack of technical
detail and understanding of the whole product or technology and its application to the
mission area. The result can be increased costs for integration, maintenance, and
licensing. Licensing for proprietary special purpose technology can be particularly costly.
An alternative is a sole-source relationship.
 Educate the organization and stakeholders on the plan and its implementation.
Communicate with stakeholders and users using their operational terminology and non-
technical language. Users won't support what they can't understand and can't clearly link
to their mission. Communicate the plan to outside industry, government laboratories, and
associated R&D activities to ensure understanding and form or solidify relationships. The
technology plan can be a tool to collaborate on shared investment strategies toward
achieving common goals.
 Implement the technology plan. Monitor, track, and make adjustments to the plan
according to periodic reviews.
  Review the technology plan. Review annually or in other agreed period by iterating the
preceding process.

Technology project management: Find further reading on project planning here

http://tech.transparency-initiative.org/fundamentals/technology-project-planning-and-
management/