Technology Managementin Ericsson
27th of November 2007 @ TKK
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-192
Outline
� Quick overview of Ericsson
� Technology management
� Innovation management
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-193
Background – Visa Friström
� Graduated from TKK last November
– Telecommunications management major
– Business strategy and international business in minor
� Master’s thesis for Ericsson on technology management
� Currently Global Graduate trainee in Ericsson
– 1,5 year global managerial training program
� Hopes to become a good kite surfer (left image)
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-194
Outline
� Quick overview of Ericsson
� Technology management
� Innovation management
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-195
Ericsson vision
The prime driver in all-communicating world
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-196
Broadband services to a screen of your choice
The full service broadband visionAny service, any device, anywhere
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-197
CEO Group Functions
C
U
S
T
O
M
E
RSMarket UnitsMarket Units
Global Customer Accounts
Multi-Country Accounts
Market UnitsMarket UnitsMarket Units
Business Unit Networks
Business Unit Multimedia
Business Unit Global Services
Research
The Ericsson organization
Sony Ericsson Mobile Communications
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-198
Ericsson strategy for competitive
advantage
Technology leadership
Operational excellence
Global presence
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-199
Ericsson Finland - Overview
Test Environment Finland
Support functions
Research and
Development
~450 employees
Global Service Delivery Center
Finland
~300 employees
Operator and enterprise
sales,marketing and customer
service~70 employees
Partner with global and domestic customers
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1910
Ericsson Finland - Expert
organization, high competence
� A diverse and global company– 950 employees in Finland, 65.000 world wide
– Experts from 32 different nations working in Finland.
� Africa, America, Asia, Australia, Europe, Latin America.
– 6% of employees from abroad
� Ericsson is the 14th biggest ICT employer offering jobs for experts
– Most of the employees have technical education
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1911
Ericsson Finland - on the Finnish ICT
market
*Tekniikka & Talous listing, Sept. 07
� Long history and good track record
– 129 years on the Finnish market – one of the key players
� Revenue 153 M€ in 2006
� Research and Development operations 3rd largest of all companies in Finland*
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1912
Outline
� Quick overview of Ericsson
� Technology management
� Innovation management
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1913
What is Technology Management?
TM
Science
Management
Engineering
� Generally considered as – Union between management, science and technological know-how – Managing the innovation process by integrating business and
engineering thinking
� Our view:– Technology management (TM) addresses the effective identification,
selection, acquisition, development and protection of technologies needed to maintain a market position and business performance inaccordance with company's objectives
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1914
Technology management processIn development unit gateways
Technology
roadmappingTechnology
roadmapping
Technology
developmentTechnology
development
Acquisition (A)Selection (S)Identification (I)
Technology
protectionTechnology
protection
Protection (P)
Technology
foresightingTechnology
foresighting
Idea
managementIdea
management
Technology strategy
Technology / Product vision
ResearchResearch
PrototypingPrototyping
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1915
Technology foresightingWhy?
� Root on how technological threats and opportunities in a fast changing environment can be indentified
� To create a vision of the future by looking at possible future needs, opportunities and threats and deciding what should be done now to make sure that we are ready to theses challenges
� Foresightig requires good internal and external networks!
"the only certainty of a particular forecast is that it is wrong to some degree."
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1916
Technology foresighting Tools and methods
� Tools and methods– Scenario planning
� Create alternative technology scenarios
– S-curve analysis� Status of technology maturity
– Consensus / Delphi method� Ask experts, on possibility of different scenarios
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1917
Technology foresighting Tools & Methods: scenario planning
Desired path
Possible paths
Possible futures
Probable futures
Probable path
Desired futures
Trends andWeak signals
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1918
Technology foresighting Our foresighting process
Search and gather trends and weak signals
Analyze trends and weak signals with tools
Build scenarios based on chosen trends and weak signals
Create Technology steps to reach the scenarios
Technology mapping
Scenario planning
IdentifyTechnologies
Update
•What is missing in scenario?
•What is missing in technology steps?•Based on technology steps, is scenario valid?
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1919
Technology studies
� Manage and handle technology studies that relate to technologies prior their attachment to any project.
� Technology studies give first indications on issues such as
– Technical solution
– Alternative technological solutions
– Make vs. Buy
– Required competence
– Technical hour estimation
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1920
Technology roadmapping
Product Management focus
Technology management focus
� Communication tool across functions
� Technology Management creates a technology roadmap on basis of foresighting.
� Roadmap created with Product Management
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1921
Technology prototyping Why technology prototyping?
� To LEARN!� Reveals big mistakes sooner.� Proof of concept � Cost effective (Development costs reduced) � Increases system development speed � Test out ideas / technologies� Support in choosing between alternatives
� Design by doing� Stakeholders can see, hold, and interact� Gather early user feedback
� Team members can communicate effectively� Show feasibility for buy-in
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1922
Technology prototyping What to prototype?
� Risky parts
� Most important open design questions
� Alternative technology solutions
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1923
Technology prototypingTypes of Prototyping
INSPIREINSPIRE EVOLVEEVOLVE
# of ideas
Prototype driven specs Specs driven by prototype
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1924
Technology developmentDevelopment process
� Currently same process for technology and product development projects.
� High-tech projects are dealt with greater flexibility.
� Pre-project activities more demanding and complex in technology than product development.
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1925
Technology developmentImproving the Front End of development projects
� Earlier project started with over committed scope and later reduced (bulldozer effect)
� Goal to start project with half scope enabling more flexible changes and reducing unnecessary work prior and during project.
TG0TG
-1
TG
-2
Scope of
features
TG2
time
Pre-project (Front End – pre-technology studies) Project initiated (development starts)
Full project
scope in terms
of resources
TG1
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1926
Technology developmentMetrics for efficiency
R&D Time Allocation
R&D Cost (per hour & head)
Cost of suppliers
Fault Slip Through
# dropped features
# External Change Request
Technical hours
Cost variance
Project development cost
Average Time to Marketslippage
Average Time to Market
Metric
11
12
10
Line / cost
9Quality
Line / product
metrics
7
6
5
Functionality
4
3Cost
2
1Time
Project
metrics
#CategoryGroup
� “What you measure is what you become”
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1927
Technology developmentSupplier Benchmark (e.g. for Make vs.Buy)
Content Adherence at end of Assignment
KPI measurements
Stretch
Stretch
Commit
Commit
Robust
Robust
Off Track
Off Track
Warning
Warning
Bug Closure Rate(lost days)
Maintenance KPIs
Development KPIs
Fault Slip Through
Cost Adherence
Schedule Adherence
100%95% 98%97%92%
100%90% 98%95%85%
10%25% 15%20%50%
95% 100%98%90%
06 238
Cost per bug (man hours)3153 394685
Legend:
Supplier 4
Supplier 3
Supplier 2
Supplier 1
Supplier Average
(across all measured suppliers)
Supplier 5
Supplier 6
Supplier 7
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1928
Technology protection
Granted patents
Granted patents
0
500
1000
1500
2000
2500
3000
3500
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
Gra
nte
d p
er
year
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1929
Technology protection3GPP Patents Considered Essential
Source: Goodman/Myers ”Analysis of Intellectual Property for Third
Generation Cellular Technology”, Infocom, March 17, 2005
3034
40
EricssonQualcommMotorolaSiemens
AlcatelPhilipsNTT DocomoMitsubishiHitachiInterdigital
MatsushitaOthersFujitsu
Nokia
EricssonQualcomm
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1930
Technology protection Strongest portfolio of essential patents
� Ericsson holds the worlds strongest
2G, 2,5G and 3G essential IPR*
portfolio
� 20,000 granted patents worldwide
� Business Driven Patent Portfolio
Management
* Intellectual Property Rights
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1931
Conduct
SituationAnalysis
Implement&Experiment
Define StrategicChoices & Vision
People
Measures & Rewards
Structure & Process
Culture
LearningLoop
Issues &
Alternatives
Gaps
LEARN
EX
EC
UT
E FO
CU
S
ALIGN
Action
Plans
Ericsson Present
Strategic Position
Ericsson Wanted
Position, Focus Areas& How
To get there
Supporting
Strategies
Conduct
SituationAnalysis
Implement&Experiment
Define StrategicChoices & Vision
People
Measures & Rewards
Structure & Process
Culture
LearningLoop
Issues &
Alternatives
Gaps
LEARN
EX
EC
UT
E FO
CU
S
ALIGN
Action
Plans
Ericsson Present
Strategic Position
Ericsson Wanted
Position, Focus Areas& How
To get there
Supporting
Strategies
Technology strategyEricsson strategy process
Situation analysis
Customer – Competitor – Own realities
– Industry Dynamics
SWOT – Key Insights
Implementation Plans
Key targets to annual scorecards
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1932
Outline
� Quick overview of Ericsson
� Technology management
� Innovation management in Ericsson Finland
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1933
Innovation Focus vs. Role
TECHNOLOGYDEVELOPMENT
NEW OR
DISRUPTIVE
CURRENT OR
SUSTAINING
BUSINESSDEVELOPMENT
NEW OR
DISRUPTIVE
CURRENT OR
SUSTAINING
Corporate - NewBusiness
Development
Ericsson(Technology)
Research
BusinessDevelopment
NEW TECHNOLOGIESEXISTING TECHNOLOGIES
Product Development
NE
W C
US
TO
ME
RS
TRULY RADICALINNOVATION
BUSINESSINNOVATION
EX
IST
ING
CU
ST
OM
ER
S
INCREMENTALDEVELOPMENT
TECHNOLOGYINNOVATION
The focus of The focus of
the R&D centerthe R&D center
innovationinnovation
Process!Process!
SUSTAINING INNOVATIONS
NEW-BUSINESS
INNOVATIONS
TM
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1934
Scope of innovation management
New Business
Sustain Business
Disrupt Business
IMPROVE BUSINESS
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1935
Innovation process
InnovationsProcess
Innovationactivities
Ericsson
BusinessProcess
OA PD0 …ID1/DP1 ID2/DP2
ID1/DP1
ID2/DP2
Idea approved for business case / prototype Study
Case approved for presentation to selected “Business Management”
OA Approval of Opportunity Analysis
PD0 Approval of market opportunity
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1936
Innovations Process
Selection
Preparation
Presentation
ID1/DP1
ID1/DP2
ER
ICS
SO
N B
US
INE
SS
PR
OC
ES
S
Inn
ovati
on
Acti
vit
ies
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1937
Questions?
© Ericsson AB 2007 Technology Management in Ericsson 2007-11-1938