MIST 7500 - Fall 2013 G1; Trending technology and disruptive innovation

Innovation is the commercialization of an invention. Our society is based on innovation, technological advances and the adoption of these technologies. There have been many theories and models used to analyze innovation over the years. The Austrian economist Joseph Schumpeter pioneered innovation management in the 1930's. He theorized on how the capitalist system was affected by market innovation. His book "Capitalism, Socialism, and Democracy" spawned increased awareness into this theory.

Over the next six decades, more analyses and models surfaced which refined his theories. Incremental vs. Radical Innovation, the Henderson-Clark Model, and the Abernathy-Utterback Model (to name a few) led to the 1997 best-seller "The Innovator's Dilemma" written by Harvard Business School professor, Clayton Christensen. Christensen studied how innovation can lead to a disruption in the marketplace that can either benefit the incumbent (sustaining innovation: improving an existing product) or allow new competitors to gain a foothold in an existing market (disruptive innovation: An alternative, usually cheaper, that brings new customers to the marketplace).

We were tasked with researching a trending technology and applying one of these models. I chose energy storage based on a professional document written by the McKinsey Global Institute (MGI). Scientists have been working on energy storage since the 1700’s (approximately a century before electricity became widely used). Today the technology has grown leaps and bounds since its inception. lithium-ion (Li-ion) batteries have become the mainstay in electric and hybrid vehicles, and mobile electronic devices. Advances in energy storage could bring the cost of electric-powered vehicles (EV) down to a more competitive price point against its internal combustion (ICE) brethren. It could also allow electricity to be offered to remote parts of the emerging world and increase the efficiencies of existing power grids in industrialized society. Energy storage systems convert electricity into a form that can be stored and converted back into electrical energy for later use, providing energy on demand.

The traditional ICE automotive industry stands to be disrupted by breakthroughs in energy storage. Major advancements in battery component technologies are expected to increase storage capacities by 2025. Next generation cathodes (the positive terminal on the battery) incorporate a “layered-layered” structure which will increase chemical efficiencies within the battery as well as voltage outputs. Cell capacity could increase by 30-50%. Total cost of ownership is expected to drop from $560 kWh (in 2011) to $165 kWh. Also, more efficient production processes will lead to the reduction in cost to manufacture EV cars. Based on these efficiencies, future EV cars could have a break-even point with their ICE counterparts when gas prices are at $2.85/gallon. Given these factors, the potential economic impact in the automotive industry could be approximately $415 billion up from the current $20 billion market.

I used Christensen’s Disruptive Innovation model to analyze energy storage. I feel that once the energy storage costs drop and performance levels increase to eclipse the efficiencies of ICE vehicles, customers will flock to the reduced total cost of ownership that will be realized from an EV. It will be a “low end disruption”, because the shift will occur as the improvements are proven to the mass consumer.

Our grandchildren’s generation could very well be the last generation to utilize ICE technology in their daily-driven vehicles. All we have to do is embrace the technology and shift our confidence in proven energy storage technologies to those of the EV.

MIST 7500 - Fall 2013; D1 Connecting business and IS/IT

 The internet has been in a transition for the last 10 years to a more interactive entity. The term Web 2.0 was coined by Darcy DiNucci in 1999 and popularized by Tim O’Reilly at a web conference in 2004. The advent of cloud computing and web connectivity has reduced business costs, opened collaboration efforts around the globe, offered more resources, and improved supply chains (to name a few). The emergence of “digital firms” has allowed for greater flexibility in organizations and management and accomplishing core business processes. Companies have been shifting their financial resources to improve on their information systems because they can see a quicker return on investment.

Here are six strategic business objectives:

• Operational excellence – improving operations to increase profitability.
• New products and services – New technology-based tools like tablet computing.
• Customer and supplier intimacy – Customer-focused services that bring return business.
• Improved decision making – More accurate information available so management can make informed decisions.
• Competitive advantage – Offering better products and services for less.
• Survival – Maintaining or increasing market share in an uncertain world.

What are information systems?
They are a set of components that are interrelated. They collect, process and store data that is distributed into a meaningful format (called information) for business decision-makers. It makes sense out of a multitude of confusing data. Some enterprise-level systems that are currently in use:

• TPS: Transaction Processing System – Transactional tool like “Square”.
• CRM: Customer Relations Management – Records customer information like “SalesForce”.
• SCM: Supply Chain Management system – Records supply chain information like “Logility Voyager Solutions”.
• ERP: Enterprise Resource Planning – Integrates all company stakeholders and the systems like “SAP”.
• BPM: Business Process Management – Allows employees to document, automate and improve processes like “Process Maker”.
• BI: Business Intelligence system – Cost effective analytics and reporting systems like “JasperSoft”.

We also looked at a software package that connects our existing business models to the infrastructure side of business. It is called ArchiMate. It allows managers to identify key activities and resources that support the business model. It also highlights assets that might not be properly utilized. This modeling software breaks down the model into three distinct "layers".

• Business Layer - The business model
• Application Layer - The software and applications that are used in the business
• Technology Layer - The hardware infrastructure of the business

There are many systems that help companies and their stakeholders succeed in the market today. Finding the tools that work best for your organization is the challenge as businesses move into the “Web 2.0” era.