Formulation of Technology Strategy for the Center for the Professional Advancement of Educators / Eduard O. Gonong

Date : April 2013
Number of Pages : 40 leaves
Adviser : Dr. Roger D. Posadas

Abstract

The Center for the Professional Advancement of Educators (CPAE) is a partner-organization of the Department of Education (DepEd) with a vision of educators-led nation-building and development. They capacitate and empower educators in enriching and developing learners through the seminar-workshops that they conduct . In just their first year, they were able to serve around 4,000 educators and learners all over the Philippines.

This study's aim was to come up with a technology strategy for the year 2013 by analyzing and harnessing the technology for the company's competitive advantage. There were many technology strategy choices and approaches. Narayanan (2001) enumerated the four broad types of technology strategies, namely : Technology Leadership Strategy, Niche Strategy, Technology Followership Strategy, and Technology Rationalizer Strategy. Meanwhile, Porter (1985) coined the five generic competitive strategies as low-cost provider strategy, best-cost provider strategy, focused low-cost strategy, and focused differentiation strategy. Competitive advantage can be secured in three ways : (1) by creating fundamentally new business and competitive domains; (2) by altering the rules of rivalry in the existing competitive demands; and (3) by supporting existing businesses. Technologies are then classified accordingly whether they are base, key or distinctive, or pacing technologies (Shenhar and Adler, 1996). Base technologies are necessary but common so they do not provide any competitive advantage. Key technologies are critical to competitive advantage since they provide meaningful product of process differentiation. Pacing technologies are upcoming technologies that have the potential to become key technologies.

Several prominent authors published approaches on how to formulate technology strategy. Leading author and Harvard Business School professor Michael Porter (1985) suggested a framework for formulating technology strategy, V.K. Narayanan published a framework for formulating technology strategy in his book Managing Technology and Innovation for Competitive Advantage (2001), UNIDo and ICS jointly published several guidelines on crafting technology strategy. First is the Technology Management Training Manual prepared by Raymond and Tavares Alfonso Avila-Merino which was published last 2008. The other one is the Guidelines on Technology Needs Identification in Small and Medium Sized Enterprises. And lastly, the book of Tarek Khalil (2000) offered an alternative for formulating technology strategy, which he called the ASSETS process. Stamm (2008) defined two approaches to strategy development, namely the planned or rational approach and the emergent approach. The rational approach is a town-down approach to strategy that starts from internal and external analysis of the organization. They emergent approach combines top-down planning that allows trial and error learning process but still aimed at implementing an overriding strategy. The rational approach works well with a functional organizational structure while the emergent approach works well with a matrix organizational structure (Slevin and Covin, 1997).

Narayanan's framework encompasses implementation approach and execution after strategic diagnosis and formulation of technology strategy that includes technology acquisition. Further, it can be applied in a wider context. Hence, comparison between the four framework's revealed that Narayanan's framework is better for the purpose of this study. Narayanan's framework has the following stages : Strategic Diagnosis, Formulation of Technology Strategy, Crafting an Implementation Approach, and Execution. Since the company has a functional organizational structure and the span of technology strategy is fairly short, the company adopts the rational approach, as it was on its business strategy. The rational approach is a deliberate and thorough, town-down approach to strategy that starts from internal and external analysis of the organization. To reduce the chance of failures, however, the emergent approach shall be used during the execution phase to address the flawed implicit assumptions made and the presence of risks, uncertainties and hassles along the way in order to execute the technology strategy well.

The issues and challenges in technology strategy execution were individually bared. Technology strategy must respond how the technology supports the business strategy. More specifically, technology strategy should identify the impact of technological change on any part of the value chain (Betz, 1987). The method of technology acquisition must be well-selected. The company must have the absorptive capacity to recognize newly acquired technology, assimilate it, and use it to deduce value (Cohen and Levinthal, 2009). The implementation approach must be identified and that the change management procedures are properly in place. Failures in treating technology as in integral factor in strategy formulation may originate from inadequate understanding of necessary and sufficient technologies, neglect of process technologies, and inability to convert technology push into market pull (Posadas, 2010). All of these precautions will be taken into account; the steps and insights of preventing them must be carried out in order to implement well the technology strategy.

After analyzing each of the strategy, CPAE will choose to become the best-cost provider, which has both the advantages of low-cost and differentiation strategies. Given the market price, the company shall offer high-quality services at lower costs to increase its profits. The company shall differentiate itself to induce costumers to prefer is services over rivals and build brand loyalty. Since CPAE is really not a technology company, it will pursue most for the key or distinctive technologies. More specifically, the company shall aim to become first adoptor of distinctive technologies in the industry; or pursue technology leadership strategy. Technology leadership is the technology strategy adopted by a firm that tries to be the first to introduce the technological changes that support its generic competitive strategy (Posadas, 2010). The company shall also look for base technologies it currently does not have to optimize its operations and be at par with its competitors along this line. The company shall aim for a "best-fit" technology selection which is good for the firm across a range of factors. The chosen technology strategy is expected to alter the rules of competition in the existing market and by optimizing current processes; or by performing specific value-chain activities better or differently than competitors do (Porter, 1985).

The following is the inventory of existing technologies as of 2012 as a result of technology audit : social networking sites (Facebook and Twitter), e-mail (Yahoo! and Rocketmail), project management and collaboration tool (TeamLab), online banking (Metrobank Direct), mobile payments (Smart Money), online maps/GIS (Google Maps), text blasting software (Compakbox), and cloud storage and file-sharing technology (SkyDrive). The following is the final technology portfolio of CPAE for 2013 : online payment systems (PayPal), accounting software (QuickBooks Online), professional networking site (LinkedIn), online advertisements (Facebook), online collaboration (Facebook Group), data analytics (optional; Google Analytics), and integrated productivity software (optional; Google Apps).

The technology acquisition and roadmap were conceived in order to push through the acquisition of technology portfolio and eventually the implementation of technology strategy. The technology strategy shall be implemented by the company on its own since the technology that will be used will be acquired externally. Upgrading and innovating of these technologies are being done by its vendors. The company may focus on maximizing the technology's use and finding more appropriate and latest technology that would bring greater value to the company. The company does not have to protect intellectual property over the technology but shall maintain confidentiality as good and as long as it can to keep the technology strategy as a 'trade secret'. Implementing the technology strategy does not have to alter existing organizational structure and processes. In general, leading the execution of the whole strategy only requires a single person who acts like a chief technology officer. The effectiveness of the technology strategy is expected to achieve the following:

1. Reduction in the cost of operations vis-a-vis without the technology.

2. Increase in revenue as driven by larger number of customers.

3. Better company-client-government engagement for sustainability through the use of technology.

Unfortunately, however, well-conceived technology strategy would not guaranty its smooth implementation. Therefore, applying emergent strategy is now important. Anthony et al. (2008) offered an insight encapsulated to the mantra, "invest a little, learn a lot". That insight is applicable and therefore taken in. The company will find ways to test first any of the technologies before committing fully on their use, and find a way to terminate or look for an alternative should they not produce the desired results. This way, there will be fewer resources that will be spent before committing whether to use them or not. Regular monitoring and assessment shall be done to ensure that the technology strategy is correctly implemented and fine-tuned. Should there be variance with the expected results, or even during the implementation, immediate action will be taken to correct the issue. The final evaluation of the technology strategy shall be done on the year-end after its implementation. This way, the required data are available for evaluation and suggested improvements can be done rapidly. Financial statements shall be inspected to measure the technology strategy's effectiveness.

In conclusion, technology strategy would be a main differentiator even in the kind of business where CPAE is involved - it is the source of competitive advantage. Size and lack of industry experience would never be a hindrance to excellence. Excellence, however, is far from reality if the technology strategy being chosen is either hardly applicable or difficult to put through. V.K. Narayanan's framework made the technology strategy comprehensive yet practical. The company must be dynamic enough to adapt to rapidly changing technologies. Technology, even if advanced and state-of-the-art, if cannot be easily used, will go wasted. But if the technology strategy is well-crafted and the execution is near flawless, CPAE will stand above the rest.