Many industries and many product categories face the daunting task of choosing among competing technologies, as they strive to plan and invest for the future. Choosing the right technology or technologies is essential to survival and success. But, making these choices is difficult.What makes these technology choices so difficult is the large number of variables and the large number of unknowns, including “unknown unknowns.” New technologies tend to come with inflated promises and overly optimistic assumptions. Given all these challenges, how does a company choose the winning technologies?
Decision Analyst’s consultants recommend three research methods (although the exact details of an industry might demand a quite different research design). The first is secondary research. What is claimed, what is known, and what is published about each of the competing technologies? Thorough secondary research is the starting point.
The second research method is in-depth interviews with senior executives and technology experts at the Client Corporation, as well as depth interviews with industry experts and industry analysts. The purpose of these depth interviews is to explore the full range of possibilities represented by the different technologies, and identify any new technologies that might emerge to compete with existing technologies. A good example is represented by the automotive industry. Automotive product planners and engineers must choose among several “engine” technologies: gasoline engines, diesel engines, electric motors, and hybrids (combinations of technologies). The decision is complicated by a number of factors, such as infrastructure development (where can an electric vehicle be charged?), the future cost of gasoline, diesel, and electric engines, and the cost of gasoline, diesel, and electricity, changing public awareness and preferences, actual performance of the competing engines, and so on. Once all of the variables and possibilities, and the context, are fully understood, then the third research method becomes possible.
Choice modeling (or conjoint analyses, or tradeoff analyses) is the third recommended method. Choice modeling allows us to explore thousands of future technology scenarios and predict which scenarios are most likely to triumph over the long-term—under varying sets of assumptions. To continue with the automotive example, what engine technologies will win if the price of gasoline engines remains comparatively low, or comparatively high, relative to competing engines? What is the exact influence of relative fuel prices on adoption of the competing engine technologies? What role is played by the density of recharging stations for electric vehicles? What is the impact of electric vehicle driving ranges? What is the role of environmental impacts? And so on.
The results from the choice modeling experiments are translated into a DecisionSimulator™, so that Clients can play “what if” games to understand what will happen if prices are changed, or assumptions are changed, or the distribution environment is changed. The DecisionSimulator™ becomes an important strategic planning tool, because as the actual industry variables change and the industry environment changes, those changes can be input into the Simulator to fully understand the strategy implications of the changes.
Technology Forecasting Services
Decision Analyst has an array of methods and tools to forecast technology diffusion and adoption, and experienced research consultants to guide the process. If you would like more information or would like to discuss, please contact Jerry W. Thomas, President/CEO (email@example.com) or call 1-800-ANALYSIS (262-5974) or 1-817-640-6166.