MIS4596: Information Systems Implementation

Week 7 - Identification and evaluation of innovative opportunities

David SchuffDavid.Schuff@temple.edu

What is an innovation? A new way of doing something Can be the process or the outcome

So a touch screen phones could be an innovation

And so could a process improvement for more quickly fulfilling orders

Why bother? Defense of business

• Negative differentiation

Significant potential return• Positive differentiation

Opportunities for new entrants may equate to risks for existing companies

Types of innovation (Christensen) Sustaining

• Evolutionary improves existing product/process in

an expected way• Revolutionary

radical; solves existing problem in a new way

Disruptive• Creates a new and unexpected

market; changes values• Christiansen originally called it

“disruptive technologies” but later changed to “innovation”

source: http://en.wikipedia.org/wiki/Disruptive_technology

Sustaining or disruptive?

Progression of a disruptive innovation/technology

Perfo

rman

ce

Time

Performance improvement required by mainstream market

Expected trajectory of performance improvement

adapted from: “Catching the Wave,” Christensen (1995)

Current performance of potentially disruptive innovation

New innovations develop until they are in a position to take over the mainstream market.

Initially, though, they may be ignored.

Why?

Progression of a disruptive innovation/technology

As the new innovation improves, it takes over increasingly sophisticated market segments.

Example: Linux

source: http://en.wikipedia.org/wiki/Disruptive_technology

Emerging Technologies (Day and Schoemaker)

Science-based innovations that have the potential to create a new industry or transform an existing one

They include• Evolutionary technologies

What Christensen calls “sustaining”• Discontinuous innovations

What Christensen calls “disruptive”

adapted from: “Evaluating the Pitfalls of Emerging Technologies,” Day and Schoemaker (2000)

Gartner Hype Cycle for New Technologies (2008)

New entrants and incumbents

Choose a “new technology”

• Who are the new entrants?

• Who are the incumbents?

The Pitfalls of Emerging Technologies

What are the four pitfalls to which firms fall victim (according to Day and Schoemaker)?

What do they have in common?

Avoiding the pitfalls What is Day and Schoemaker’s

general advice for avoiding the four pitfalls?

How can each be implemented?

Christensen’s “pitfall” - staying too close to the customer• What does this mean?• Is it consistent with Day and Schoemaker?

Case discussion VMWare Inc., 2008