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ENGINEERING MANAGEMENT

Assignement II: Business Plan and Technology

Djiemeni Toudjeu Gauthier

209327910

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Table of Contents

1. Introduction

2. Strategic Management Process

3. Structured Approach to Business and Technology Strategy

4. Linking Technology into Strategies

5. Real live case study on Huawei technologies

A- Development Strategy

B- Market Strategy

C- Business Development

D- Business Performance

E- Growth Prospects and Business Outlook

References

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1- Introduction

In today’s fast-paced and rapidly changing business environment, companies has deeply modified their strategies to integrate technology into the business planning process. Technologies are now everywhere in the firm’s value chain. Thus, it is necessary for firms to adapt their strategic process as technology is important as part of business function. This implies the need to study a technology strategy that link technology with business objective. In this assignment, I will do a case study on Huawei Technologies, which is one of the leading telecommunication company with many challenges. In this assignment, I will present a structured approach to business and technology strategy.The process includes study process that serve as a guidance to organizations enabling them to analyse the technology needs for a business. Therefore, managers must be aware of the strategic importance of technology in delivering value and competitive advantage to their companies. Among the awareness are deciding which technologies support the strategic objectives, identifying companies strengths and weaknesses, establishing technology priorities, and finally deciding strategic actions.

Establishing and maintaining the linkages between technological resources and company objectives is of vital importance and represents a continuing challenge for Huawei as it has many competitors in the same field. This requires effective strategic processes of particular importance are the dialogue and understanding that needs to be established between the commercial and technological functions in the business.

The process includes designing a framework that serve as a guidance to organizations enabling them to analyze the technology needs for a business. Therefore, managers must be aware of the strategic importance of technology in delivering value and competitive advantage to the companies. Among the awareness are deciding which technologies support the strategic objectives, identifying companies’ strengths and weaknesses, establishing technology priorities, and finally deciding strategic actions.

According to Floyd (1997), in particular of that, there are approaches for:

1. Deciding which technologies you need to support the strategic objectives of your business.

2. Determining competitive strengths and weaknesses in the technologies matter

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3. Setting corporate technology priorities

4. Deciding on strategic actions to strengthen your position

This concept paper will explain the linking business objectives with technology competences to integrate business and technology strategies. The final product to be develop is an integrated plan linking business and technology strategies to guide a business organization to their desired goal.

2. Strategic Management Process

The terms “strategic management” and “strategic planning” are often used in the organization. Even though the terms are formally known, but in fact they are not the same. According to Poister (2003), strategic planning is the process of clarifying mission and vision, defining major goals and objectives, and developing long-term strategies for moving an organization into the future in a purposeful way and ensuring a high level of performance in the long run and the strategic management, in contrast, is the larger process that is responsible for the development of strategic plans, the implementation of strategic initiatives, and the ongoing evaluation of their effectiveness.

Sometimes the strategic management is used to refer to the three (3) important stages in strategic management process that are strategy formulation, strategy implementation and strategy evaluation and the purpose of strategy planning is referring only in strategy implementation.

According to David (2001), the strategic management process consists of three important stages. The first stage is the strategy formulation. At this stage the organization develop a vision, mission, identifying an organization’s strengths,weaknesses, opportunity and threats (SWOT), establishing the short and long term objectives, generating alternative strategies and choosing particular strategies to pursue. At this stage the organization may look at the issues such as whatnew business to enter, how to allocate resources, whether to expend operations and on how to enter the international market.

The second stage involves the strategy implementation. After strategies are formulated, they must be implemented. This process is known as action strategy. This requires the organization to establish objectives, devise

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policies, motivate employees, and allocate resources. The action involves developing a strategy-supportive culture,create budgets, developing and utilizing information system, and linking employeecompensation to organizational performance (David, 2001).

A strategy is only as good as its implementation. However the processes are not as simple as plan. The challenge is that the organizations have to face the barriers to stimulate employees throughout an organization to work with pride and enthusiasmtoward achieving stated objectives.

The final stage in strategic management process is the strategy evaluation. Organization must determine what actual performance is by obtaining information about it. Strategy evaluation includes three basic activities. The first activity is examining the underlying bases of organization strategy. Next, comparing expected results with actual results and finally taking corrective action. According to David (2001) the strategy evaluation becoming increasingly difficult today because of the following trends:

1. A dramatic increase in the environment’s complexity

2. The increasing difficulty of predicting the future with accuracy

3. The increasing number of variables

4. The rapid rate of obsolescence of even the best plans

5. The increase in the number of both domestic and world events affecting the organization

6. The decreasing time span for which planning can be done with any degree of certainty

3. Structured Approach to Business and Technology Strategy

Floyd (1997) has developed a framework linking business objectives with technology.

Based on the figure, the structured approaches to business and technology strategy begin with the development of objective. Objectives should be

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quantitative, reasurable, realistic, understandable, challenging, hierarchical, obtainable, and congruent among organizational units. Each objective also should be associated with a time line. Objectives are commonly stated in terms such as growth in assets, growth in sales, profitability, market share, degree and nature of diversification, and so on.Long-term objectives are needed at the corporate, divisional, and functional levels in an organization. They are an important measure of managerial performance.

Besides that, the organization also needs to identify the strategy that fit with the current business environment. These includes identify the technology, competitors, products and services. Its includes the internal and external environment. Then organization can link the business and the technology strategy in the organization.

According to Burgelman et. all (2001), Technology is a resource that are very important in organizations. Apart from that, managing technology is a basic business function. Vernet & Mohammed Reza Aasti (1999) defined technologystrategy as organization priority in technology development that includes technology sourcing, research and development, capital venture in technology development, technology alliance and staff training and development. Vernet & Mohammed Reza Aasti (1999) develop a model to shows the relationship between technology strategy and business strategy in a firm overall strategic objectives.

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Source: Vernet & Mohammed Reza Aasti (1999)

The overall strategic are based on technology competencies to create competitive advantage in the organization. It is very important for the firm to establish the objective that at the end will support overall strategy especially in the technology.Most of the company seeks for new competitive environment by taking different approach to strategy development. They implement technology driven business strategy and creates new business model based on their company need.

A core competency can take various forms, including technical/subject matter know how, a reliable process, and/or close relationships with customers and suppliers. Technology competencies are engaged at the outset, planning and prototyping

can occur earlier. Companies can engage in strategy prototyping, testing a variety of potential strategies before a particular course is set. With this iterative, learning-based approach, prototyping takes on a higher purpose, exploring a spectrum of strategic possibilities, not just validating a selected strategy's feasibility. Strategic planning is not anchored to a calendar, but is evaluated and revised to take advantage of insights gleaned from new learning and changes in the technology context.

Meanwhile according to Meyer (2008) in developing a technology strategy organization need a clear direction. This is very important so that the organization can tailor the overall of organization strategy.

The figure below explain the framework for organization to determent and implement technology strategy

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Source: Meyer (2008)

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From the framework above, we can see that the determination and implementation of technology strategy is embedded in an organization where there is clear leadership that sets an overall strategic context. Such an organization may create the conditions where creativity can blossom and where market and user information may meet thetechnological capabilities developed within the organization, leading to the generation of lots of ideas.Normally, such an organization will have an overload of ideas and one of the essential tasks in the determination of the technology strategy is to evaluate project on their own merits as well as their contribution within the portfolio. Projects thus selected are prime candidates for investment. But in order to succeed, those investment opportunities need to be checked with the available capacity of the technology organization.

The technology strategy needs to be tailored to the overall strategy of the organization. Clear vision is required defined by the leadership of the organization to create an environment. The leadership needs to set the goals, what kind of business does the firm want to be in and how do you want to position the firm via the competition. By doing so it also defines what should and should not be pursued as innovation projects. A clear vision is the best way to help to define the portfolio of projects and the criteria that you need to use to evaluate new opportunities. A good vision that can enable the development of a technology strategy should live up to two conditions: it has to combine a long-term view with concrete short-term goals and it should not be too constraining. Technology strategy needs to stretch the organization beyond its comfort zone.

4. Linking Technology into Strategies

The developments of technology strategy should initiate at corporate level. It consists of strategic element such as the vision, plans and business needs and then translates it into a realistic, objective, deliverable corporate strategy for planning process.

Technology is a critical tool to support business strategy. Technology can play in shipping business strategy. In the increasingly unstable business environment, the process of finding a solution able to resolve the technological issue and strategic issuehas been describe as a journey into the unknown. To survive the journey, innovation is becoming crucial. Therefore it is important for the organization to identify effective integration of technology and strategy planning. The development of corporate

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strategy is the important stage in integrating the idea. At this point, organization will look into resource that available and try to link with the activities.

To understand the linking activity organization must look into factors that affect the strategy. Grant (1991) defined strategy as the matching process for an organization which involves internal and external environment. Technology strategy is generally formed by the systematic process for creating, acquiring, disseminating, leveraging and using knowledge for the competitive advantage and to achieve organizational objectives.

Integration between internal and external resources requires organization to match internal strengths, and weaknesses and external opportunities and threats. It is important for the organization to undertake the strategy initiative by evaluating theenvironment in order to understand what technology strategy should be managed andperformance. Organization that is capable to manage technology strategy successfully will also able to reflect the internal and external competitive strategy.

From the internal and external environment, organization needs to develop the strategy and information of today by using SWOT analysis. The purpose is to link between the internal and external environment. Part from that, Farrukh, Phaal & Probert (2003) has been develop knowledge and resource based concepts in technology management and builds on a process perspective. The purpose of theframework is to support the understanding of how technological and supporting technology in the context of internal and external environment.

The technology processes such as identification (I), selection (S), acquisition (A), exploitation (E), and protection (P)

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Source: Farrukh, Phaal & Probert (2003)

Real live case study

Huawei Technologies

A- Development StrategyWith a firm dedication to customer-centric innovation, Huawei Enterprise caters to customers from the government and public sector, finance, transportation, energy industries, large enterprises, communications and MSOs, and SMEs worldwide.

Upholding our business strategy, we are focusing on ICT infrastructure, and we are committed to providing wide-ranging ICT solutions and services to customers, including enterprise networking, UC&C, cloud computing & data center, enterprise wireless, and network energy. 

We focus on close cooperation and integration with partners and firmly implement a transparent and stable channel policy. We also strive to share more benefits with partners and work hard to build a harmonious ecosystem

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for win-win partnerships.

B- Market Strategy

Cooperation with telecom carriers:Telecom operators are Huawei's long-term partners and customers. It is the common goal of Huawei and the telecom operators to work together to develop the enterprise market and achieve a win-win situation.

Distribution and integration partners:Huawei will expand its distribution and integration partners extensively in the global enterprise market, as well as help partners grow rapidly, while setting up a comprehensive and harmonious industry ecosystem.

Industry customers:Through in-depth understanding of customer needs in various industries, Huawei will fully develop and provide competitive, integrated solutions for the respective industries.

Cooperation with global partners:The cooperation with global strategic partners, who have years of industry and market experience, will enable the two parties to complement each other and assume a leadership role in global strategic markets.

3In the enterprise sector, Huawei successfully integrated Huawei Symantec's business and merge the storage product field into IT product line and a new SecoSpace product field into enterprise network product line, which has further enriched our ICT solution portfolio that covers enterprise network infrastructure, UC&C, cloud computing & datacenter, and enterprise information security.

4In the enterprise information security area, which includes mobile office security, unified network security and cloud computing security, Huawei is dedicated to innovation and developed the 10G security gateway USG9000 series which has T-level transmission capacity. Its UTM series achieve No. 1 market share in the threat management gateway market in China.

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To address the rise of cloud computing and the growth of data, Huawei launched T series of unified storage system, enterprise-level storage system OceanStor HVS with the world’s highest configuration, UDS storage system for massive data, MVX big data storage solution, enterprise cloud computing system FusionCube, as well as dozens of models of Tecal V2 enterprise-level servers. To date, there are over 130,000 users across 30 countries using Huawei’s desktop cloud, and more than 1,100 companies using Huawei’s storage systems. We have helped customers build 260 data centers worldwide, 35 of which are cloud data centers.

Huawei has launched some enterprise wireless solutions: GSM-R, eLTE to meet customer needs in vertical industries. Huawei's GSM-R has been serving railway lines worldwide, covering a total length of over 13,000 km. Based on LTE technology, Huawei's eLTE solution supports multimedia clustering, video surveillance, remote data collection, and broadband-based data access services.

In the network energy field, Huawei adheres to a 4S (Simple, Scalable, Smart, and Saving) concept, and has successfully applied its global leading ICT technologies to energy systems, successfully enhancing the efficiency of energy transformation and utilization. Huawei is now capable of delivering superior site energy and data center energy solutions for global customers.

Upholding the strategy of close cooperation and integration with partners, Huawei is committed to creating a constructive and harmonious ecosystem in the enterprise IT market. Currently, Huawei has more than 200 tier-1 channel partners (distributors and value-added partners) and over 2,000 tier-2 channel partners (platinum, gold, silver, and recognized partners) worldwide.

C- Business DevelopmentIn the first half of 2012, Huawei’s three business groups (BGs) achieved considerable progress in technological innovation and market expansion, further consolidating the company's position as a leading global ICT solutions provider.

Huawei also launched the CloudEngine 12800 – a world-leading core switch for data centers, and CloudFabric data center network solution, as well as 34 models of routers, switches and WLAN products, forming a complete portfolio of enterprise network products.

Huawei also launched an industry-leading full-view telepresence that can deliver a more true-to-life face-to-face experience.

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D- Business Performance

In 2011, Huawei's enterprise business experienced rapid growth, with its sales revenue reaching US$1.46 billion, a year-on-year increase of 57.1%

E- Growth Prospects and Business Outlook

Globally, the Huawei Enterprise business is growing steadily, allowing us to solidify Huawei's position as the leading ICT solutions provider in the industry. The enterprise business will also remain a key strategic direction for Huawei’s overall growth plans. • Currently, the key markets of Huawei Enterprise include 33 countries around the world

Milestones1.1 2012 year

OctoberHuawei officially joined the OpenStack Foundation to facilitate the establishment of a more open cloud computing ecosystem.

SeptemberHuawei established a global strategic partnership with Intel for IT products and solutions.

AugustHuawei and the State Information Center of China co-established the Innovation Center for e-Government Initiatives. This is the first research institute in China jointly set up by a government affiliate and a company that is dedicated to the research, application, and promotion of new e-Government technologies. Huawei announced its global channel service strategy.

JulyHuawei became the only China-based company to join the Board of Directors of the Organization for the Advancement of Structured Information Standards (OASIS).

MayHuawei became the first China-based company to join the Transaction Processing Performance Council (TPC). The TPC is an international standards body that defines transaction processing and database benchmarks and delivers trusted results to the industry.

Huawei signed an important partnership agreement with SYNNEX Group, which helped Huawei successfully enter into the channel network of the US enterprise ICT market.

Huawei launched the Huawei Certified Internetwork Expert (HCIE)-Enterprise

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technical certification. This is the highest ICT technical certification of the routing and switching field in Huawei's certification program.

MarchTencent and Huawei hosted the opening ceremony of the Tencent-Huawei Joint Innovation Center.

Huawei announced its global channel partner strategy.1.2 2011 year

NovemberHuawei officially launched its ICT technical certification program. This program is the only certification system in the industry that covers all technical fields.

Huawei acquired Symantec's 49% stake in their joint venture, Huawei-Symantec, for US$530 million. The transaction was closed in March 2012 and Huawei now retains full ownership of Huawei-Symantec.

AprilHuawei became the first China-based company to serve as a board member of Distributed Management Task Force (DMTF), a mainstream standards organization on cloud computing.

MarchHuawei and Digital China signed a cooperation agreement and Digital China officially became a distributor of Huawei's enterprise networking products.

EarlyHuawei set up the Enterprise Business Group, announcing its official entry into the enterprise market.

Conclusion

Technology and business strategy have a very strong connection. If the companies be short of of technology, business strategy cannot be accomplished. However, even many of the firms that have successfully linked business and technology strategy fail to recognize the link between effective intellectual capital strategy and both business and technology strategy.

References

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1- Andriole, S., J.,(2006). The Collaborate/Integrate Business Technology Strategy. Communications of The ACM May 2006/Vol. 49, No. 5

2- Bellaver, R.F., & Lusa, J.M., (2002). Knowledge Management Strategy and Technology. Artech House: Boston.

3- Burgelman, R.A., Maidique, M., A., & Wheelwright, S.C., (2001). Strategic Management of Technology and Innovation. McGraw-Hill: Boston.

4- Diwan, P., (1999). Productivity & Technology Management. Golden Books Centre: Kuala Lumpur

5- Floyd, C., (1997). Managing Technology for Corporate Success. Gower Publishing Limited: USA.

6- Hayes, R., et al. (2005). Operation, Strategy, and Technology: Pursuing the competitive Edge. Wiley: United States of Amerika

7- Grant, R.M., (1991), The Resource Based Theory of Competitive Advantage: Implications For Strategy Formulation, California ManagementReview, Vol. 33 No.3, pp.114-35.

8- Louis Raymond, François Bergeron (2008). Enabling the Business Strategy of SMEs through Ebusiness Capabilities (A Strategic Alignment Perspective)

9- Meyer, D A., (2008). Technology Strategy And China’s Technology Capacity building. Journal of Technology Management in China. Vol. 3 No. 2, 2008 pp.137-153

10-Papp, R., (2001). Strategic Information Technology: Opportunities for CompetitiveAdvantage. Idea Group Publishing. UK Phaal, R., Farrukh, C and Probert, D., (2001).Technology Roadmapping: Linking Technology Resources to Business Objectives. Centre forTechnology Management, University ofCambridge Institute for Manufacturing, Mill Lane,Cambridge, CB2 1RX, UK

11-Willyard, C.H. and McClees, C.W. (1987), ‘Motorola’s technology roadmap process’,

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Research Management, Sept.-Oct., pp. 13-19.

12-Vernet, M., & Mohammaed Reza Arasti (1999). Linking Business Strategy to TechnologyStrategies: A Prerequisite to the R&DDetermination. International Journal TechnologyManagement, Vol. 18, No. 3/4 1999.

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