Management of Technology and Innovation In Business - Coursework Example

Running head: Management Management of Technology and Innovation Insert Insert Grade Insert 12 July Introduction Both past and emerging technological or business model innovation have affected the management consultancy industry in a significant way (WetFeet, 2009, 33). In essence, the relevant innovations have greatly influenced the industry as can be attested by the evaluation of McKinsey & Company, a consulting firm. Ordinarily, it has been observed that consultancy firms that initiate the creation of new technologies or invested colossal amounts of money in discovery-oriented research to bring about new technologies have been failures in taking advantage or capturing value from those technologies. In fact, it is other companies and particularly competitors that quickly learn the new technological ideas, improve or implement them as they are and make the best of value from the competitive advantage. A good example here would be the emergence of management consultancy where consultancy firms have faced fierce competition and put in jeopardy as clients and the market finds comfort on the conventional knowledge based systems because of the convenience derived from it both in business and social circles. Essentially, firms that are originators or creators of new technological advancements can capture value from those technologies by effectively incorporating the technologies in their current business or/and through launching new ventures aimed at exploiting the technology in new business arena. The paper aims at fully examining the past and emerging technological model innovations in terms of how these have affected management consultancy industry and more particularly McKinsey & Company. This study will also explore the effects of technological innovations on management consultancy firms with special reference to McKinsey & Company. Incidentally, innovation has been explained in many different fashions but is simply the creation of more efficiency in processes, products, and services. Preferably, the route through which efficiency in this sense has been achieved has been technological ideas, enhancement, and development. Real innovation is systematic and consistent and is achieved through an efficient and repeatable methodology (Moss, 2003, 72). Business Model Innovation (BMI), on the other hand, is the reinvention of the business being undertaken by a firm or organization. BMI is aimed at increasing competitive advantage of a firm in the products and/or services that it offers thus end up isolating competitors (Schilling, M. A., 2006, 72). A firm that engages in refreshing its value proposition does not only structure profit generation and resource allocation to this proportion but also aims to expand to wider markets whether existing or new. Past Business Models and Innovation Past business models and innovation have undoubtedly had an immense impact on the wider management consultancy industry. As a result, innovation has significantly shifted the paradigms for consultancy firms that have to invent new technology forms so as to stay competitive in the dynamic market. McKinsey & Company is a typical case of business model and innovation in the consultancy sector as the corporation has greatly been affected by past innovations both directly and indirectly. Innovation comes with several parameters and challenges most of which underscore its wider implications on the industry. Competitor firms often mimic new technologies making firms craft newer models in order to survive and prevail in the vibrant market. In the past one decade, McKinsey & Company has been subjected to such challenges involving the aping of its technological innovations. In order for firms that innovate and to successfully realize the fruits of their initiatives, they must take technology to the market through a specific business model. A firm may maximize the benefits of innovation through an existing business model that the firm is familiar with or may require to assume a totally dissimilar model in the case where the model does not fit the circumstances of the technological or market opportunity (Czerniawska, 2002, 25). A number of business or technological models that can be used to catapult organizations to achieving full benefits of technological innovations have been explained by different managerial theorists. One among these is the disruptive innovation model, which has three elements of disruption that firms can use to attract and maintain a higher market share. Companies ensure that their products get improved based on customer changing needs, but users can only take advantage of this rate of improvement up to some level and leave the rest of the efficiency that comes with that improvement unutilized. This is because of certain factors that limit the full utilization of the new benefits arising from the new improvements (Kluge et al, 2001, 24). An example here is the management consultancy industry where companies that offer business solutions have over the years continued to improve the efficiency of services to meet customer requirements. Most solutions have been designed to offer the permanent solutions to the problems and expand capacity of the organizations. The customer, therefore, ends up using only a part of the improved technology in organizational performance and effectiveness (Kipping & Engwall, 2003, 56). The aspect of the disruptive model is the fact that as companies continue to improve their products to satisfy higher end market needs, they end up compromising the needs of the middle or/and lower end customers as they try to keep the trajectory on product performance expectations from the mainstream market. The information systems industry mainly the computers and other IT gadgets are typical examples where earlier computer technology was so slow that users were largely dissatisfied with aspects such as speed and quality of output (Schilling, 2006, 94). With continued improvement of the computer and related gadgets, as well as accompanying software for different applications, the efficiency levels have greatly improved in terms of speed and quality of work over a short period of time, leaving users in the larger market having to undertake training to learn how to use the devices. The disruptive model is the differentiation between sustaining innovation and disruptive innovation, which are like two opposite forces that competitive firms endeavor to balance, is a relevant consideration (Betz, 2011, 76). Sustaining innovation seeks to satisfy the needs of high end customers of a product or service and requires that the company continuously improves the product or service year after year to meet expectations of its mainstream market. This, therefore, calls for critical innovation to ensure that these requirements are met efficiently and cost effectively. The resulting product or service is usually sophisticated, expensive and appeals to more sophisticated customers (Burgelman et al, 2008, 89). A good example here is the management consulting industry where McKinsey & Company developed fresh models best of IT of constantly improving and retaining loyal customer. A very small number of users, which would be regarded as the high end market, is still seeking for more improvements to the computer. Earlier information dissemination technology was wanting, and the market needed much efficient and effective modes of communication (Rastog, 2009, 45). Disruptive innovation offers products or services that are simple, less costly, and more convenient and those that seek to satisfy the needs of low end customers. It is, however, important to note that once the market embraces these products, the improvement process is inevitable if indeed the company seeks to remain relevant and fight competition effectively to sustain that segment of the market that in most cases will be larger than the high end one. Disruptive innovation underperforms the dominant products along the dimensions valued by mainstream customers. Emerging Business Models and Innovation Competitive advantage remains the priority of every organization because it holds the key to organizational success. For instance, in the management consulting industry several firms have incepted several measures to guarantee their success in the future through innovation and development of newer models of technology. A typical example is McKinsey & Company which has committed to the continuous development of innovative business models to guarantee its future success in the vast industry (Friedman, 2011, 67-71). The effects of the global economic and financial meltdown have triggered firms across different industries, including management consulting, to reduce costs and scrutinize budgets for potential savings with an aim to maximize profits at minimal costs using the most efficient, competitive and unique business model that takes into account opportunities that come with ever changing innovations. All these concerns are aimed at positioning the firms at a competitive advantage given the need for creativity to outdo other firms providing analogous services or products to the same or different market (Palmer, 2012, 3-5). The competitive environment is one characterized by changing business strategies by different firms to achieve an advantage over the others and win substantial market share. Without a dynamic and flexible business model that embraces change through new technical and technological ideas to enhance performance and sustain relevance in the market, companies would find themselves in a precarious situation because of the fierce business environment they operate in and need to always keep to the requirements of the customer. The management consulting industry has adopted the virtual firm business model that acts as an intermediary between freelance consultants and clients (Bruton & White, 2010, 38). Practically, the model is highly based on leverage in terms of the ratio between partners and associates (Beyond the pc, 2011, 7-10). There has been the outcry about paying consultants on an hourly basis and recognizing the value from fresh consultants by paying premiums. The emerging business model in this industry should emphasize on key elements of leverage, knowledge and experiences as explained above. There should, however, be limits in terms of regulation and guidelines to guard the credibility and quality of management services offered to clients. A clear methodology of admitting consultants to participate in the market and offer services to the public must be in place. One of the requirements should be the knowledge level and skill set possessed by experts in their different fields of specialization. To foster best practice, another element that should be considered in the business model is the level of experience from similar or related situations. The need for hands-on experience must be empathized to promote commitment to success and results. Fundamentally, the projected business model must be seemingly scalable such that it increases viability in the long run so that firms of different sizes are able to use it (Nune & Breene, 2011, 4-6). Another admirable attribute of the model would be the promotion of balance between client and consultant in terms of risks and opportunities such that key performance indicators are used to assess mutual success, as opposed to win-lose scenario of most contracts in the industry currently (Schilling, 2006, 65). To remedy mistrust between the market and the service providers, the model must be low-leveraged. In the management consulting industry, the virtual business model should contain these characteristics of an emerging model that aims to achieve the high level results, performance, and customer satisfaction and increase loyalty for business growth (Verbag et al, 2006, 64). Under the virtual model, business alliances or relationships are created to deliver high performance and quality in the most effective and efficient manner. A consultancy firm that gets new contracts would take advantage of virtual business by using outsourcing of expertise to achieve client output. References Betz, F., 2011. Managing Technological Innovation: Competitive Advantage from Change. Washington: Taylor & Francis. Beyond the pc. 2011. The economic times. Oct 6 2011 Burgelman et al., 2008. Strategic Management of Technology and Innovation. New York: McGraw-Hill Irwin. Bruton, G. & White, M., 2010. The Management of Technology and Innovation: A Strategic Approach. Washington: Cengage Learning. Czerniawska, F., 2002. Management Consultancy: What Next?. Washington: Palgrave Macmillan. Friedman, T.L., 2011. The ten forces that flattened the world. The World Is Flat. Kipping, M. & Engwall, L., 2003. Management Consulting: Emergence and Dynamics of a Knowledge Industry. Washington: Oxford University Press. Kluge et al., 2001. Knowledge Unplugged: The McKinsey Global Survey of Knowledge Management. Washington: Palgrave Macmillan. Moss, M., 2003. The Not-So-Definitive Guide to Management Consulting: An Insiders Humorous But Practical Perspective on the Industry. New York: Universe. Nune, P. & Breene, T., 2011. Reinvesting your business before it s too late. Harvard Business review. January-February 2011. Palmer, A., 2012. Playing with fire. The economic times. February 25th 2012 Rastog, P., 2009. Management of Technology and Innovation: Competing Through Technological Excellence. London: Sage. Schilling, M. A., 2006. Strategic Management of Technological Innovation. New York: McGraw-Hill. Verbag et al., 2006. Managing Technology and Innovation: an Introduction. New York: Routledge. WetFeet. 2009, Mckinsey and Company. Washington: WetFeet inc. Read More