ITU, ESCAP, APT

“Capacity Building Workshop on

Information Society Statistics:
Infrastructure and Household Indicators”
6-8 November, 2007
UN ESCAP Building, Bangkok

Role of ICT in Enhancing

Technological Capabilities

K. Ramanathan
Asian and Pacific Centre for Transfer of Technology (APCTT)
United Nations - ESCAP

APCTT 1
 Plan of Presentation
• Technology and Competitive Advantage

• Technological Capability

• Information and Communication Technology

(ICT) Interventions and Technological Capability
Development

• Implementation Issues

• Concluding Remarks
APCTT 2
1. Technology and Competitive Advantage
• A firm strengthens its competitiveness if it can create greater
“value” for its customer than its competitors.

• The main five determinants of customer value creation are:

9 Quality (of the product or service)
9 Speed (of delivery)
9 Flexibility (extent of customisation)
9 Convenience (from order to delivery)
9 Cost (life cycle cost to the customer)

• These may be referred to as the Core Value Determinants

(CVD)

APCTT 3
• Based on these Core Value Determinants (CVDs),
customer value may be defined as:

Customer Value = F (Quality, Speed, Flexibility, Convenience)

Cost

• In today’s context, all of these CVDs have to

necessarily incorporate environmental and
sustainability dimensions.

APCTT 4
• Technology strengthens a firm’s competitive advantage
by helping it to enhance customer value by bringing
about:
9 Improved quality
9 Increased speed of delivery
9 Greater customisation of products and services
9 Greater convenience for the customer
9 Lowered cost through productivity gains

• A firm that can create more customer value than

another, within the same market segment will be the
more competitive of the two.

• Firms create this value through the deployment of its

technological capabilities.

APCTT 5
 2. Technological Capability

• Technological capability may be

divided, for expository ease, into:

9Tactical technological capabilities

9Strategic technological capabilities
9Supplementary technological capabilities

APCTT 6
• Tactical technological capabilities
9Production capability
9Selling and servicing capability

• Strategic technological capabilities

9Design engineering capability
9R&D capability

APCTT 7
• Supplementary technological capabilities
9 Capability to plan and manage technology transfer
9 Capability to continuously develop and refine human
skills
9 Capability to access and work effectively with
marketing and distribution channels
9 Capability to effectively access necessary material
inputs for production through effective partnering with
global supply networks
9 Capability to identify funding sources and obtain
funds at competitive rates from global sources for
expansion and growth

• Figure 1 shows these capabilities schematically

APCTT 8
Figure 1. Customer Value Creation through
Technological Capability
Source:
Source: K.
K. Ramanathan
Ramanathan (2005)
(2005)

Capability to access and manage marketing and

Customer distribution channels, materials suppliers, and
and financial sources
Market Customer
Focus Capability to plan and manage technology transfer Value

Capability to develop and refine human skills Quality

Leadership
Delivery
Design Production Selling and Flexibility
Engineering Capability Servicing Convenience
Strategy Capability Capability Cost
R&D
Capability

Capability to manage data, information, and knowledge

APCTT 9
• It is the “fusion” of these core technological and
supplementary capabilities that will determine how the
firm competes. A unique fusion could lead to the
emergence of a “ core competence”

• These core and supplementary capabilities are built up

over time and a lot depends on how they are nurtured
and developed.

• This nurturing and development will depend on the

“leadership triad” of leadership, strategy, and customer
focus.

• The “fusion” process and the “leadership triad” will be

supported by the firm’s infrastructure for managing data,
information, and knowledge.

APCTT 10
• It must be noted that the performance of the firm is
influenced to a great extent by the National Innovation
System (NIS) through:
9 Physical infrastructure (electricity, telecommunication
water, roads, ports etc.)
9 Facilitating infrastructure (Investment promotion
boards, venture capital firms, S&T information
centers, technology transfer centers, etc.)
9 Collaborating infrastructure (R&D institutes,
universities, design engineering and production units)
9 Level and intensity of market rivalry
9 Cluster availability (component manufacturers,
suppliers etc.)
9 Policy setting

APCTT 11
 Figure 2. The Influence of the NIS on the Firm
Source:
Source: K. Ramanathan, The
K. Ramanathan, The Role
Role of
of Technology
Technology Transfer
Transfer Services
Services in
in Technology
Technology Capacity
Capacity Building
Building and
and
Enhancing the Competitiveness of SMEs, UNESCAP-ITMRC Workshop on “Subnational Innovation
Enhancing the Competitiveness of SMEs, UNESCAP-ITMRC Workshop on “Subnational Innovation systems systems
and
and Technology
Technology Capacity-building
Capacity-building Policies
Policies to
to Enhance
Enhance Competitiveness
Competitiveness of
of SMEs,
SMEs, Mongolia,
Mongolia, 2007
2007

Financial, Fiscal, Legal and General Economic Policies

Rivalry
Physical
Knowledge Management Capability
Infrastructure
Fin., Mktg. Mat. Access Capability
Facilitating
C Technology Transfer Capability
L HRD Capability Customer
Infrastructure
Value
S R&D D&E Prod Selling & Servicing
Cap Cap Cap Capability
Collaborating
Infrastructure

Clusters

APCTT 12
 3. ICT Interventions and Technological
Capability Development
• Production capability enhancement

9 ERP systems for shortening production planning

cycles and the seamless integration of demand flow
management, materials and services management,
quality, costing, and accounting.

9 Intelligent manufacturing systems (KBSs, NNs, GAs,

FL, CBR, and HS) for process planning, quality
management, maintenance and diagnosis, and
scheduling

APCTT 13
• Selling and servicing capability

9 Proactive cybermarketing

9 Web-based provision of technical information,

bulletins, etc.

9 Use of intelligent agents to enhance customer search,

information provision, and personalizing content

9 e-camera for progress monitoring

9 Integration of telephony, Web, and database

technologies for effective CRM
APCTT 14
• Design engineering and R&D capability
9 Use of CAD and rapid prototyping.

9 Use of AI techniques such as KBS, NN, GA, FL, CBR,

HS etc.

9 Integration of Internet and Intranet applications for

shortening product development time.

9 Using online research firms and for acquiring

business intelligence and state-of-the-art scientific
information

APCTT 15
• Supplementary Capabilities
9 Technology transfer capability
‰Search - IT-enabled tools such as: online search of patent
databases; research web sites; meta-search engines,
directories, and online libraries; trade mailing lists etc.
‰Assessment - Groupware and Intranet for internal discussion
and the use of web-based services of specialist firms to
acquire potential partner information
‰Negotiation - Internet telephony, videoconferencing,
teleconferencing, and privately hosted electronic arbitration
rooms

9 Funds Identification capability

‰Use of Internet-based consulting firms, and “intelligent
software agents” for organizing and filtering “hits.

APCTT 16
• Supplementary Capabilities (cont.)
9Materials access capability
‰Internet-enabled B2B collaboration (“supplier electronic
store” for online ordering, “buyer electronic marketplace,” and
the “e-mall” approach).

‰This requires firms to integrate their own back-end

information systems with those of their suppliers

9Human resources development capability

‰Use of multimedia technology for employee orientation
programs, product familiarization, delivering operation and
maintenance instructions etc.

‰Web-based virtual classrooms (one-to-one and one-to-

many).

APCTT 17
 4. Implementation Issues

• Technological capability development has, in

general, been based on “learning by doing” and
“learning by changing.”

• The emphasis has been on trying to do what is

already being done, better.

• In the e-business era of today, ICT offers firms

the scope for doing things that they are not
already doing.
APCTT 18
• This requires a shift from “inductive reasoning”
to “deductive reasoning.”

• The hardest part is to recognize and creatively

deploy the new, unfamiliar capabilities of ICT
instead of its familiar ones.

• Some of the important issues that need to be

examined include the following.

APCTT 19
Reasons for adopting ICT-based interventions
• There must be a clear understanding of the drivers to
obtain top management commitment and allocation of
resources.

Intrafirm adaptability
• Compatibility of new systems with existing systems that
will continue to be used.

Interfirm adaptability
• Compatibility of new systems with those of partners in
the supply chain and other support service providers.

APCTT 20
Architecture
• Ensuring that intended applications, software, hardware,
networks, and data management can be integrated into
a cohesive platform.

Scalability and reliability

• Ensuring that the new systems are not mere replications
but suit the needs of the firm.

Security
• Protecting information flow and integrity.

APCTT 21
Skill availability
• Developing and/or acquiring multidisciplinary skills to
design, implement, and improve the systems.

Cost
• Phased implementation and obtaining resources to meet
both direct and indirect costs.

Creating a favorable culture

• Introducing measures for generating appropriate
behavior that supports acceptance and new ways of
working.

APCTT 22
 5. Concluding Remarks
• This presentation has essentially tried to conceptualize
the role of ICT in enhancing technological capability.

• However, to gain better insights into factors that promote

and/or inhibit the adoption and deployment of ICT-based
interventions to strengthen technological capability,
more work needs to be done.

• It is proposed that, initially, a series of case studies be

carried out in firms that have successfully implemented
ICT-based approaches to enhance technological
capability

APCTT 23
• Such studies could provide valuable insights into critical
success and failure factors and provide a basis for
developing indicators to assess the extent to which ICT
is being deployed by firms to upgrade technological
capability.

• Often it is easy to develop input indicators that reflect the

extent to which resources are being allocated in ICT
deployment.

• However, it is necessary to move beyond input indicators

to assess the extent to which, for instance, production
capability or design capability, has been enhanced due
to ICT-based interventions.

APCTT 24
• This would require the development of process, output,
as well as impact indicators.

• Also indicators are needed to assess the extent to which

the NIS is supporting or inhibiting the adoption of ICT-
based interventions by firms.

• It is in this context that case studies could be valuable

since the views of practicing managers can be very
useful in designing indicators that can help practitioners.

• Even more challenging would be the development of

ICT-related indicators for assessing technological
capability enhancement at the sectoral level.

APCTT 25
 APCTT

Thank you
Reach us at:

UNAPCTT

P.O. Box 4575, C-2, Qutab Institutional Area, New Delhi – 110 016

Tel : 91-11-26856276, 26966509 | Fax : 91-11-26856274

Email : kramanathan@apctt.org | Website : www.apctt.org

26