TECHNOLOGY, INNOVATION AND COMPETITIVE ADVANTAGE: MAKING A BUSINESS PROCESS PERSPECTIVE PART OF INVESTMENT APPRAISAL

Abstract

Investments in technology are an important focus for innovation but, like other forms of change, they also carry risk. The risk associated with a poor decision in part depends on the number of processes impacted by the technology, ranging from low with a small and reversible production line enhancement, to high with the irreversible implementation of an enterprise-wide information system. In terms of competitiveness, just as a local innovation can remove efficiency-sapping bottlenecks from a wide range of related business processes, so can the same business processes amplify any negative effects. This paper reports on an ESRC Innovation Programme funded project that has made a detailed study of investments in both the manufacturing and service sectors. Detailed maps of the business processes related to an investment have been recorded both before and after implementation to allow identification of where process versus technology benefits actually arise. These observations are used to construct a framework for investment appraisal that links local enhancements to process performance improvements experienced by the customer. In addition to providing a benchmark for future competitive enhancements of the technology/process, the standardised maps may also help the transfer of technologies across, and between, organisations.