THE ROLE OF TECHNOLOGY IN COMPETITIVE BUSINESS Hard and Soft Technologies-an Exposition

Definitions of technology: technology is a developed body of knowledge used to create tools, develop skills or to extract and collect materials, to convert inputs into outputs. We perceive Technology as the use of knowledge for practical purposes whereby something
entirely new can be done, or an existing process can be executed in a different/ new way to yield benefit to the organization in which it is performed. Technology has many associations including technology as tools, machines, objects: as know how or knowledge, and as a process for converting inputs to desired outputs to meet the objective of a larger system: The nature of technology: involves design, it involves practical application, it has to justify itself through value addition. It is related to, in fact based on Science but is not identical to or a synonym for Science. While Science is a body of knowledge involving exploration and establishing the nature of a specific subject area such as physics, chemistry, biology, medicine, law, technology involves changing states of materials, objects creating, improving services for specific purposes and always towards adding value i.e. increasing benefits over costs. Hard technologies and Soft technologies: It is necessary to identify, describe as well as qualify these two types of technologies because they have a special relevance in Management. Technologies improve the understanding of Management science in general as well as the understanding of management processes and Competitive Advantage. Additionally technologies both of the hard and soft type significantly impact the functional areas of management including Marketing and Sales, Operations, Logistics and Information Processing to name just a few. Let us now proceed to defining, describing and elaborating on their impact and contribution to efficient and effective management in a Competitive environment. What is hard technology? We often come across references to Automobile technology, Wireless Mobile telecommunication technology, Nano technology, and solar Power and Wind Power technologies. Each of these is an established field of knowledge in which Business is conducted, and profit is made. Those firms that understand these technologies better and utilize their finer points to a greater extent than their competitors are likely to establish dominance in their respective industries. Each of the technologies mentioned above are based on one or more of the developed physical sciences. Wireless mobile telecommunication technology is founded on the basic science of electricity and electrical engineering. The fundamental principle in this science is the relationship between Voltage, Resistance and Current embodied in the familiar formula V/R=I, where V stands for Voltage, R for resistance and I for current. Similarly all of Automobile engineering which gives us trucks, cars and two wheelers depends on Internal Combustion technology which in turn is based on the formula PV/T =C( a constant) where P is the pressure of a gas/fluid, V is the volume and T is the temperature

Some Instances: while these simple relationships between primary variables in their respective sciences, form the basis on which several technologies are founded, more intricate behaviour of these variables constitute opportunities for developing products and processes that are outcomes of the respective technologies. Examples of these are compressor technology for automobile and engineering industries and photovoltaic technologies for the electric power industries. Rates of Change for relatively sophisticated and unsophisticated technologies: It is important to note is that these technologies and sub technologies are highly developed and outcomes are both predictable and controllable. What is more, the rate of change in hard technologies would be relatively faster than in soft technologies for the simple reason that their basis is understood by many, and the way forward is more clear. However there are relatively sophisticated hard technologies like Electronics and Telecommunication technologies, which have witnessed rapid change over the last few years. On the other hand, and Steel , Aluminium and Cement are industries in which no change of significance has taken place over the last 50 years. These we could be described as relatively less sophisticated technologies. We would have to accept that the rate of positive change, is much higher in the former when compared to the latter. As illustrative of this difference, we see the enormous number and capability of new products in the TV business, the music recording and reproduction business and the mobile wireless technology business both in the hardware and software areas. Disruptive and Sustaining Technologies- a wry comment: I would like to comment on the current buzz surrounding disruptive and sustaining technologies. Sustaining technologies are those in which incremental and evolutionary changes help to grow and support existing markets as was the case with the various generations of Mainframe computers in which IBM was the dominant player and consequently the main beneficiary for several decades. Disruptive technologies on the other hand are revolutionary in character and create new markets while weakening existing ones. I believe that characterizing change whether of technologies or the change that they bring to markets as distinctly revolutionary or evolutionary is a misunderstanding of change in the business environment. It is facts that change that impacts markets and business performance with any degree of significance takes place much more slowly than is popularly understood and accepted. Any new hard technology takes a minimum of 25 to 30 years to make its first presence in the market. The cell phone which was invented in 1952, took over 30 years before it first appeared in the market (the mid 1980s. The VCR invented in the late 1940s was commercially launched in the mass market only in the mid 1970s by Sony and Matsushita with the latter learning from the formers mistake* and becoming the market leader. Decline and demise of a once great company: Kodak on the other hand while being the undisputed leader in the photography industry, wilfully neglected the opportunity to embrace, exploit and dominate the digital photography space and has declined substantially in terms of market share, profits and profitability and currently has filed for bankruptcy. To cite Digital photography as a disruptive technology would be a completely wrong assessment of the specific case of digital photography, and the larger, correct understanding of the concept of technology Technology for its own sake and not for the Customer, not acceptable: Sonys Betamax VCR while recognized as a brilliantly innovative product, was not compatible with the worlds major TV technology formats(PAL,NTSC,SECAM) and therefore was not acceptable as a mass market offering.

Matsushitas products marketed under the Panasonic brand were compatible with the major tv tech. formats and were a great success for this principal reason. Soft Technologies: An elaboration: The larger Management processes of Planning, Organizing, Controlling and Directing are the basic repositories of soft technology. Planning which deals with the what, how, where and when of all activities, which will result in optimum achievement of objectives, is a pre requisite for efficient and effective management of a business enterprise in a competitive environment. Companies like Reliance industries who have world class planning and execution of massive infrastructural projects have gained massive competitive advantage and reaped great benefits through leading market share and impressive profits which their rivals in the Indian public and private sector find hard to imitate. Timex Watches with its superior organizational processes was not only able to have the lowest watch cost in the world of Timekeeping, but was able to have the lowest attrition rates in its industry and across industries in the country. Hindustan Lever has an enviable reputation for monthly closing of accounts throughout the year which enables the greatest measure of control over all aspects of its Operations. Walmart has superb logistics and the best Information systems which has made it the worlds largest company in terms of annual revenues. The apparel firm Inditex of Spain better known for its brand Zara has through its creative product planning and sourcing strategy become one of the top two players in its industry. Organizing comprises the continuous development of an optimum organizational structure representing the various job/responsibility positions, along with the respective authority and responsibility assignments. The Organization chart and the complete set of job descriptions would be the formal reflection of a firms organization. Controlling is very simply measuring deviations from planned performance and ensuring that these are eliminated or progressively reduced to acceptable levels. This process unfortunately is popularly associated with the Accounting and Audit functions which bring an adverse tinge to this very positive and helpful function. We use the term variance to denote the deviations/variations from the plan. These variances are first established and measured. Thereafter it is the responsibility of the concerned function be it Marketing, Operations or even Finance and accounts to develop responses that will ultimately enable actual performance to match the planned performance. Lets take a real life example. Company A has set itself a target of reducing its raw material inventory by 30% from previous year end levels and plans to progressively achieve this reduction. At the end of the first quarter of the current financial year, the reduction is only 3% against the quarterly target of 7.5%(1/4 of 30%). The variance is 4.5%. Analysis shows that actual consumption was 20% lower than planned. In addition receipts were lower by 15%. The management takes a decision to cut planned receipts for the next quarter by 20% of what was earlier planned to cope with a continuing lower level of consumption reflecting poor sales offtake of key products produced from the raw material. At the end of quarter 2, the cumulative reduction in raw material inventory has reached 12% against the cumulative target of 15%, showing an improvement over the first quarter. The variance is further analysed, corrective action taken with the expectation that by year end the cumulative inventory reduction of 30% will be achieved. The control function extends to every area of a company and over all possible performance components be it cost reduction, revenue and profit maximisation, product development and market penetration to name a few.

Leading: also referred to as Directing ,Commanding is the fourth macro function in Management. Countless books, essays and galaxies of articles have been written on the subject of leadership and leading. Quite simply leadership can be seen as decision making, motivating and carrying a group towards achieving its objectives. While there can be thousands of prescriptions and suggestions for good leaders, leaders can be seen as providing example(the leader is the first to arrive at the workplace and the last to leave), taking hard decisions when required, and inspiring followership in those they are responsible for. Leadership can, and should be exercised at all levels and in every organizational position where one individual has charge of many( be they just be one, two or a hundred persons). In management as in other areas of competitive functioning be it sport, entertainment, or education, leadership should be seen as a discipline involving acceptance and systematic performance of assigned responsibilities. More importantly it can and should be taught and learned( while some are born leaders, it is those who aspire and train for leadership who become the best leaders). Henry Ford who dominated the automobile industry for decades, was thought to be a born leader displaying charisma and admired by many. Alfred. P. Sloan was one who became a great leader, inspiring a company and a group of thousands of managers towards sustained global leadership. We all have it in ourselves to became effective and inspiring leaders to make the difference between efficient and excellent management in the organizations that we serve and belong to. Functions as technologies: the macro functions can be viewed as soft technologies and exploited for competitive advantage. General Motors achieved major competitive advantage in the period 19301970 through its innovative and well regulated organization( the firm was the pioneer in Divisionalized Structure and decentralized management). Apple has been famous for the dynamic and inspiring leadership provided by Steve Jobs. International. A.B.B the Swedish engineering giant was fabled for its planning which combined the best of Centralized and De Centralized organisational configurations its many Divisions spread over several continents. Functional Management as a source of Soft Technology: beyond the macro functions of management described above the various functional areas including Marketing, Sales, Customer Care, Manufacturing, Logistics, Information Processing and Finance and Accounting represent offer reservoirs of opportunity to employ soft technologies. Reliance Industries achieved global stature in the Energy industry by mastering Project management capabilities to the extent that they completed massive projects in world record time. Procter and Gamble are masters of Marketing where they have developed universally applicable systems to create, service and retain customers in the fiercely competitive arena of Personal Care. Walmart are doyens in Logistics and Information systems. Asian Paints is a company who has achieved mastery in rural marketing. Tata Motors developed the science of Ancilliary Development and mastered it for the benefit of the Indian Automobile and Components Industry. The essence of mastering soft technologies is to see the potential for creativity and innovation in functions which are considered routine and relatively changeless. Timex Watches India saw a huge opportunity in controlling Employee Attrition. Through systematic training and transfer of employees at all levels of management across functions the company was able to fill vacancies arising from attrition through internal promotion and transfer. This not only curbed the loss rate through attrition to 5% from the initial 13%, but created more opportunities for

loyal employees. It resulted in a win-win for employees and Management ensuring employee satisfaction on the one hand while enhancing productivity and effective competitive performance on the other. Role and Scope to be enlarged: Soft Technologies have enormous potential for improving competitive performance of firms at all levels and across all functions and sub functions. It is a pity that so little attention is paid in the teaching and the practice of management to this treasure trove of opportunity where every individual, department, division can contribute to superior competitive endeavour. If we think of technologies as children, hard technologies are birthed by a few with much labour, whereas soft technologies can be borne and nurtured by the great many. When and Where can organizations depend on Hard and/or Soft technologies: In general we can view hard technologies as being most impactful at the creation and growth stages of an industry. If we look at the Telecom Industry over the last 60 years, hard technology including wireless mobile technologies(for telephony), Imaging and optical technologies(for Video) and Information technologies for data have been prominent. However as this wonderful industry matures as it must and will, the role of soft technologies will play an increasingly significant part in the competitive performance of the industry players, both global and local. If we look at industries like Steel and Aluminium, hard technologies for melting, rolling and forming, ruled the roost in terms of bestowing competitive advantage for most of the early 20th century. For the last 50 years, however, it has been soft technologies(acquisition, reviving and integration) that have separated the leaders from the also- rans. Briefly hard technologies play a dominant role in the growth phases of an industry and its business environment, while soft technologies come into their own, in the maturing and mature stages. This does not mean that a company should not look for soft technology opportunities in the growth stage of an industry, nor that hard technology options would not exist in the mature stages. It is just that the balance would tilt towards soft technologies in the latter stages of an industry. Conclusion: we have explored the concept of technology and its relevance to business and business management in an increasingly competitive environment. The demarcation of technology into its hard and soft components not only provides a better understanding of these two distinct facets of the larger entity, but opens up huge possibilities to add and provide value to customers and in the process increase in market share and better bottom lines. It is to be hoped that firms and their constituents would not only realize the enormous potential that technology in its hard and soft avatars offers, but that they would make progressive efforts to incorporate the theory and practice in their own business operations to their advantage and to the increasing benefit of their stakeholders commencing with their customers and extending all the way through employees, vendors, associates, their larger societal environment and last but not least to their share holders. R.J.M