“For every door that closes, ten other doors open. Just choose the right one”.
With the introduction of electricity, it took another 60 years to overtake the energy market. The introduction of hydraulics in the market of draglines generated a far more drastic effect. It took less than 20 years and all traditional dragline producers were no longer in existence. This happened to a lot of technologies. The type writer, hard disks, Photo cameras. The traditional players have a focus on their own “traditional” market and its needs.
Back in 1996 we tried to find an answer to large ICT investments. Since innovations followed each other in rapid succession it was hard to keep up with all changes in the market. Release management of software, doubling processor speed every 18 months, 40 percent of the software acquired was never used and shelved. It was time for a decision making framework.
We called it Strategic Life Cycle Management and studied many cases to find a similar development for all the cases we studied.
Many publications on life cycles I read I leave unreferenced but it comes down to a fairly simple mechanism that gives handles for strategy development, investment decisions and above all interpretation of the state of a company, it’s competition and the market it operates in.
life cy·cle (plural life cy·cles)
noun
Definition:
1. stages of development of living organism: the series of changes of form and activity that a living organism undergoes from its beginning through its development to sexual maturitythe life cycle of the snail
2. all stages of development: the complete process of change and development during somebody's lifetime or during the useful life of something such as an organization, institution, or manufactured product
Life cycle positions
A life cycle starts when a new technology or technique is introduced that replaces an old one like electricity replacing steam energy. The life cycle ends in the same fashion. The technology is been replaced by something radically different. Like the hard disk and the flash memory.
The introduction of a new technology triggers end of life innovation in the old technology, trying to fight off the inevitable. In this stage there is the fight for the customer and the primary driver is improvement off technology. Innovation goes in little steps that follow each other rapidly. Look for instance at mobile digital devices and their development over the past fifteen years. The old technology recedes and becomes oblivious.
There are many new players exploring the new possibilities. This stage ends when a dominant design emerges. Many players will merge into larger few companies and a shake out takes place leaving only the companies with the best accepted technology
In the second stage competition is not about technology but about functionality or image. Innovation takes larger steps and is about ease of use or consumer identification (fashion or emotion). Marketing is the main driver and there are fewer competitors. Extensive market research drives the developments and the output is a best of breed product. A second shake out takes place and only a few dominant players remain.
This starts the last stage of production innovation where price is the main driver. There is fierce competition and players will do anything to out smart the competition. The will automate production, reshuffle distribution. Organise market dominance etc.
At the end of this stage something new will happen. A replacing technology will arise forcing the remaining companies to do a last effort to keep up. Make or buy. Companies that are still financially healthy will buy new initiatives. Others will try to adopt the new technology and learn how to use it them selves. Both strategies hold dangers.
Buy and incorporate successful initiatives in the standing organisation often leads to a slow down in the necessary rapid innovation process.
Adoption of the new technology within the company often leads to a clash of cultures and political battlefield, resulting in the same slow down of innovation. Only companies with pockets deep enough to make a few mistakes will survive and participate in the life cycle that starts all over again
To find out where and what a company is, extensive analyses of its current status and products is necessary, as is a vision to the companies future. The gap this shows will be the framework for change and innovation. This can be as simple as the replacement of workstations for a large company. Replace now or wait another year. But it can be as complex a situation like the magazine publisher that is confronted with decreasing revenues I described in the publishing dilemma.
Summary
Means : The traditional value chain processes will largely remain monolithic systems as designed in the last decades. Changing them to an online environment would simply be too costly. Instead these systems will be circumvented by new interactive systems that facilitate e-commerce and customer service processes based on portal technology. Eventually the monolithic systems will be replaced by more network type solutions one step at a time.
With the introduction of electricity, it took another 60 years to overtake the energy market. The introduction of hydraulics in the market of draglines generated a far more drastic effect. It took less than 20 years and all traditional dragline producers were no longer in existence. This happened to a lot of technologies. The type writer, hard disks, Photo cameras. The traditional players have a focus on their own “traditional” market and its needs.
Back in 1996 we tried to find an answer to large ICT investments. Since innovations followed each other in rapid succession it was hard to keep up with all changes in the market. Release management of software, doubling processor speed every 18 months, 40 percent of the software acquired was never used and shelved. It was time for a decision making framework.
We called it Strategic Life Cycle Management and studied many cases to find a similar development for all the cases we studied.
Many publications on life cycles I read I leave unreferenced but it comes down to a fairly simple mechanism that gives handles for strategy development, investment decisions and above all interpretation of the state of a company, it’s competition and the market it operates in.
life cy·cle (plural life cy·cles)
noun
Definition:
1. stages of development of living organism: the series of changes of form and activity that a living organism undergoes from its beginning through its development to sexual maturitythe life cycle of the snail
2. all stages of development: the complete process of change and development during somebody's lifetime or during the useful life of something such as an organization, institution, or manufactured product
Life cycle positions
A life cycle starts when a new technology or technique is introduced that replaces an old one like electricity replacing steam energy. The life cycle ends in the same fashion. The technology is been replaced by something radically different. Like the hard disk and the flash memory.
The introduction of a new technology triggers end of life innovation in the old technology, trying to fight off the inevitable. In this stage there is the fight for the customer and the primary driver is improvement off technology. Innovation goes in little steps that follow each other rapidly. Look for instance at mobile digital devices and their development over the past fifteen years. The old technology recedes and becomes oblivious.
There are many new players exploring the new possibilities. This stage ends when a dominant design emerges. Many players will merge into larger few companies and a shake out takes place leaving only the companies with the best accepted technology
In the second stage competition is not about technology but about functionality or image. Innovation takes larger steps and is about ease of use or consumer identification (fashion or emotion). Marketing is the main driver and there are fewer competitors. Extensive market research drives the developments and the output is a best of breed product. A second shake out takes place and only a few dominant players remain.
This starts the last stage of production innovation where price is the main driver. There is fierce competition and players will do anything to out smart the competition. The will automate production, reshuffle distribution. Organise market dominance etc.
At the end of this stage something new will happen. A replacing technology will arise forcing the remaining companies to do a last effort to keep up. Make or buy. Companies that are still financially healthy will buy new initiatives. Others will try to adopt the new technology and learn how to use it them selves. Both strategies hold dangers.
Buy and incorporate successful initiatives in the standing organisation often leads to a slow down in the necessary rapid innovation process.
Adoption of the new technology within the company often leads to a clash of cultures and political battlefield, resulting in the same slow down of innovation. Only companies with pockets deep enough to make a few mistakes will survive and participate in the life cycle that starts all over again
To find out where and what a company is, extensive analyses of its current status and products is necessary, as is a vision to the companies future. The gap this shows will be the framework for change and innovation. This can be as simple as the replacement of workstations for a large company. Replace now or wait another year. But it can be as complex a situation like the magazine publisher that is confronted with decreasing revenues I described in the publishing dilemma.
Summary
Means : The traditional value chain processes will largely remain monolithic systems as designed in the last decades. Changing them to an online environment would simply be too costly. Instead these systems will be circumvented by new interactive systems that facilitate e-commerce and customer service processes based on portal technology. Eventually the monolithic systems will be replaced by more network type solutions one step at a time.
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