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Technological Forecasting & Social Change 80 (2013) 11291139

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Technological Forecasting & Social Change

The process of making the business case for technology: A sales and marketing perspective for technologists
D. Probert, M. Dissel, C. Farrukh , L. Mortara, V. Thorn, R. Phaal
Centre for Technology Management, Institute for Manufacturing, University of Cambridge, 17 Charles Babbage Road, Cambridge, CB3 0FS, UK

a r t i c l e

i n f o

a b s t r a c t
Technological investment is a key driver of innovation and the evaluation of technology potential is becoming increasingly important in this context. There is a range of approaches and tools for developing an understanding of the value of technology. However the process of communicating this potential to possible customers is not well documented in terms of theory and practice and falls outside the skill set of many technologists. This paper seeks to integrate the concepts of marketing and consultative selling into making business cases for new technologies. It describes an exploratory study which results in an outline process activity model for technologists wishing to build an effective business case for securing investment internally or when selling a technology externally. Following a review of literature, we suggest that there is potential to learn from market research and consultative sales techniques, and propose a five step process. The work has been industrially validated and forms a novel foundation for further development. 2012 Elsevier Inc. All rights reserved.

Article history: Received 28 December 2011 Received in revised form 14 July 2012 Accepted 17 July 2012 Available online 12 August 2012 Keywords: Technology evaluation Business case Tools Process perspective Practical guide Technology development Selling Marketing

1. Introduction New technologies are often characterised by high levels of both market and technological uncertainty [1,2]. This complicates the task of obtaining internal funding, for example from business units, or to selling them externally, for example as licenses. This paper focuses on understanding how a marketing and sales perspective can support investment decisions for new technologies either inside the firm or selling technology to external customers. In both cases it is often the research and development departments that have the task of securing financial support for the new technology, be it from internal sources such as product or service oriented business units, or from external customers such as those who wish to buy for example licenses to be able to use the technology in their products or to improve their processes. The sales and marketing expertise within a company is usually focused on selling products or services that form the main income stream of the business and so is not generally available to support these activities. A typical definition of building the business case in a technology based company can be taken from Cooper [3], who suggests that technical, marketing and business feasibility are assessed and result in a business case with three main components: product and project definition; project justification; and a project plan. However as Cooper [4] himself recognises .in a technology development project, the commercial prospects for the new technology are often unclear, especially near the beginning of the project when these commitment decisions are required (p.24). Thus building the business case for technology can be seen as an entrepreneurial activity. Hindle and Mainprize [5] discuss the literature on entrepreneurial business planning and emphasise the crucial importance of communication in making a business case. They define an entrepreneurial business plan as the formal argument used to secure, from prospective investors, resources for a proposed entrepreneurial process [6].
Corresponding author. Tel.: +44 1223339812; fax: +44 1223464217. E-mail addresses: Drp1001@cam.ac.uk (D. Probert), marcel@dissel.co.uk (M. Dissel), cjp22@cam.ac.uk (C. Farrukh), lm367@cam.ac.uk (L. Mortara), vbt21@cam.ac.uk (V. Thorn), rp108@cam.ac.uk (R. Phaal). 0040-1625/$ see front matter 2012 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.techfore.2012.07.010

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For technologists faced with the situation of promoting a technology that they have been heavily involved in developing, it can be hard to stand back and view it through the eyes of a buyer or customer. However, Freeman [7] states that Innovation is essentially a two-sided or coupling activity....on one hand, it involves the recognition of a need or more precisely, in economic terms, a potential market for a new product or process. On the other hand, it involves technical knowledge, which may be generally available, but may also often include new scientific and technological information, the result of original research activity. Experimental development and design, trial production and marketing involve a process of matching the technical possibilities and the market (p.109). This concept suggests that in order to sell a new technology it is necessary to demonstrate sufficient understanding of potential market opportunities rather than rely on the buyer to make the connection. Hence it can be suggested that technologists would benefit from an insight into the two-way communication process embedded within a sales and marketing approach, in order to develop a pitch or business case for their technology. The context for this work is a capabilities based framework for technology management activities [8]. The building of the business case itself and the evaluation activities that precede it, support both the acquisition and exploitation of technology as framed by the strategy, innovation and operations processes of the firm. A further objective is to link the commercial and technological perspectives held within the firm that drive resource allocation in creating and responding to new organisational and environmental opportunities. Following the literature review an initial process activity model is proposed. Six case studies of technology valuation covering both internal and external sales are then reported. This allows literature and practice to be combined in a revised process activity model for making the business case for technology. The paper concludes with a discussion on the implications of the research and identifies future work to build on this novel approach, combining technology management and sales perspectives. 2. Literature review In this paper we have identified a number of streams of literature that address the problem at hand. We seek to show how these can be combined to identify key gaps and provide elements of a process activity model for building the business case for technology. 2.1. The marketing and selling of technologies Technology marketing is recognized as a core competence for technology enterprises [9]. However there does not appear to be consensus on the precise definition. A distinction that can be found is marketing of technology itself (intangible), and marketing of technology related products and services (tangible) [1012]. Technology marketing that relates to technology product and services focuses on tangible aspects of technology induced products and services [1]. In these cases the marketing effort can be focused on a commonly accepted application and documented processes exist. For example, Easingwood and Kousteles [13] describe a four step marketing process: market preparation, targeting, positioning, execution. Conversely technology marketing of intangible technology or know-how elaborates on the issues of the intangibility [14]. In this paper we will focus on marketing related to intangible technology or know how [10] as this is less established than for tangible technology and relevant to both the buyer and the seller of that technology. Ford and Ryan [14] identified five differences between selling know-how versus selling a product for external sales, with some relevance to internal sales where the customer may be a separate business unit. The first issue is to deal with the intangibility. They argue that companies often do not realize they actually have saleable technologies in their portfolio and thus require scanning processes to deal with the lack of awareness of their potentially marketable technologies. Secondly, the buying element of technologies often rests with engineering staff which could have a conflict of interest as they themselves have not been able to develop the technology. They ascertain that any approach to sell technology must allow for the potential unwillingness of these individuals. Hence the sellers must make sure they understand the buying centre of the buying firm (or internal business unit) and ensure they sell at the appropriate level. Thirdly, distribution of know how is fundamentally different from distribution of tangible products and often involves the help of a middleman. Unlike a product, know-how can be built up but is also highly perishable. Hence the delivery is difficult to define and carries legal implications as well. Some mechanisms they identified to deliver know-how are licensing and franchising. Fourthly, the market identification is different as the sale tends to be a one-off and the sales environment is associated with highly confidential situations. Again middlemen might be required to mediate between buyer and seller. Finally, pricing presents additional complexities. This links to technology valuation matters discussed in the following section. The five areas mentioned above give a good overview of key aspects of marketing and selling intangible technologies. However, the authors [14] fail to address how the sales process actually functions. What are the necessary communication processes between the buyer and the potential seller and how are the sellers identified? Our research shows that these fundamental sales questions are often not well understood. 2.2. How are technologies adopted? Technology adoption is relevant to distinguish the various characteristics of potential buyers of technology over time. Seminal work on technology adoption can support the identification of the challenges in the technology sales process [15,16]. The adoption process has been defined as the process through which an individual or other decision making unit passes from first knowledge of an innovation, to forming an attitude towards the innovation, to a decision to adopt or reject, to

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implementation of the new idea and to confirmation of this decision [16]. Further discussion identifies adoption enablers [16,17] and adoption influences [18] which emphasis both internal and external organisational context. Technology adoption is essential to the process of venturing new technologies, as it indicates what potential buyers actually want. Moore [15] emphasized this issue by adapting the technology diffusion model of Rogers [16], which is essentially a set of five categories that represent different attitudes towards new technologies. These categories show a continuum of attitudes in terms of a willingness to adopt new technologies and range from innovators (venturesome and eager to try out new ideas), early adopters (respected individuals and opinion leaders in trying out new ideas), early majority (deliberate in adopting new ideas), late majority (sceptical and approach ideas with caution), and laggards (traditional and suspicious, adopt when idea is already superseded). Rogers [16] uses a normal distribution to show how an innovation is diffused. Moore [15] extended this model by claiming that for technology firms the uncertainty is most visible during the transition in adoption characteristics from early adopters to early majority. He refers to this as the problem of crossing the chasm. Whereas 2.5% of the market is immediately prepared to adopt new technologies (and some are even willing to pay a premium to do so), followed by the 13.5% of early followers, it is much more difficult to address the early majority. The transition is thus a very unsettled phase. The gap also implies a change in market attitude towards the innovation. Whereas early adopters are interested in business opportunities, the early majority is more conservative and is mostly interested in improvement from a productivity perspective. Both individual and collective adoption behaviour is relevant to the sale of technologies by large firms, whether it be to internal (e.g. business units) or external customers. Whereas the initial funds were often given in the innovator and early adopter phases (for example a fixed R&D budget), the crucial shift comes when selling the technologies to the business units or external customers. Evidently as new technologies are sold, the seller has to be able to change his perspective from a technologist or innovator perspective (the enthusiast) towards the customer perspective of early majority markets, by means of understanding the decision maker or decision making unit. According to Moore [15] this is vital for the success of the adoption. Hence, although the product-market combination is the key in traditional sales, in technology sales it is the role of the seller to establish the correct technology-problem combination in order to convince the potential customer. 2.3. How can we value a technology? Technology valuation provides a set of techniques and tools that assist technology sellers and buyers in preparing a business case for a particular technology and to agree on a future value and hence a potential price. This area of literature in this paper is based on the available approaches to actually value a technology. A number of technology valuation methods are already available. Most techniques are quantitative in nature and are derived from financial valuation techniques and decision theory, such as the use of discounted cash-flows [19], decision trees and real options e.g. [2022]. Quantitative techniques enable decision makers to systematically structure the potential outcomes and their underlying uncertainty. Although widely accepted when technologies have a certain level of maturity and applications have been defined, for new technologies these approaches can be seen as mathematically sophisticated but contextually nave [23]. When a technology is already uncertain in terms of its potential application appealing to the early majority, a sophisticated but non-transparent method of evaluation could result in ensuring that the buyer will not be interested. Another category of techniques focuses more on the qualitative aspects of valuation. These techniques generally attempt to structure reasoning and serve as an aid to decision makers in shaping their judgment, such as the use of score cards [24] and roadmaps [25]. These tools could form the basis of a communication platform for selling technologies. Nevertheless many firms refrain from using formal valuation methods until the technology becomes more mature (and hence more certain) and rely on expert judgement or gut feel [26]. The emotive aspect of buying a new technology may thus be equally important when preparing the business case. 2.4. The reality of the resource allocation process The reality of resource allocation in firms is illustrated by an account by Dean [31]. He draws upon process theory [2730] as a foundation theme in discussing the challenges of advanced manufacturing technology (AMT) investment justification. This provides an in depth insight into five companies building an internal business case for investment in technology. Although the technologies themselves were mature in this example, their overall integrated implementation was uncertain (and expensive), and the focus on the process, organisational and political elements is valuable for the insights given into a realistic justification decision process. Interestingly, Dean [31] refers to selling technology and he states that This terminology of selling the technology was consistently used by the people in the firms I studied (p.127). He argues that innovation champions need to satisfy three types of criteria in order to have an initiative approved: strategic/financial, interpersonal and political. For the strategic/financial component, depth and translation are proposed as necessary. Depth of analysis is important for senior managers reviewing the proposal, due to the level of uncertainty involved, as is translation of the enthusiasm of technologists into language that administrative or financial personnel would understand. For the interpersonal component, credibility and commitment are seen as important. Credibility acknowledges that when faced with uncertain decisions people usually rely on the track record of the proposer, while commitment is seen as a demonstration of certainty, responsibility and enthusiasm. Finally for the political component, solidarity and visualisation are needed. Solidarity is described as a combination of consensus and commitment

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necessary for approval of risky ventures (p.136), especially ones that will involve disparate parts of the organisation, while visualisation attempts to convey an idea or vision, thus making the technology tangible, to help to build support. This work touches on many key issues to do with technology adoption and building an effective business case, emphasising the organisational pre-work necessary to achieve a successful outcome. 2.5. Consultative sales Consultative sales concepts [32] could potentially help with the selling of technology. Ford [14] has acknowledged that sales is a distinct element of technology marketing, yet very little attention has been given to sales literature and techniques in this context. Hindle and Mainprize [5] emphasised the crucial importance of communication in making a business case, a key aspect of sales. Theoretical and practical sales concepts have received interest in main stream business literature. For example Harvard Business Review allocated a special issue to the topic in July 2006. However, very few efforts have focused on integrating these concepts in technology and engineering management. It is important to distinguish consultative sales from traditional sales approaches. Traditional sales approaches are often referred to as manipulative. The focus is on convincing customers why they need a certain product. The product is the focus of the sale, not the customers' needs, objectives, desires and hopes [33]. The process of sales is structured around this objective and the role of the sales person is to lead the conversation and tell customers what they need and don't need. Traditional sales approaches are characterised by one-way communication whereby the seller waits until the end of their presentation to determine whether the customer agrees with the need for the product or not. In contrast the consultative selling process focuses on clearly defining a customer's needs and objectives [32] and ensures that a customer agrees that these needs should be addressed [33]. For consultative selling it is necessary to get inside the customer's business [32] in order to understand their motivations. Subsequently this implies the need to be aware of the buying centre, or decision makers and influencing stakeholders, within the potential buyer's organization. Crowley et al. [34] addressed this topic within the context of consulting engineering and identified lifestyle categories for the buyers. In marketing it is well known that, especially for business-to-business relationships, getting closer to the customer is essential for success [35]. Consultative sales (also known as adaptive sales [36]) are complex processes focusing on creating customized solutions to fit each buyer. The focus on the buyer rather than the technology or the seller makes this approach especially interesting for selling new technologies. As previously identified, with selling new technologies the gap or chasm is often a result of a change in perspective to early majority needs. This requires an understanding of a prospective buyer's problems rather than the technological details or features. The evaluation of the technology by the potential seller is often based on gut feel, or, as it is more formally known, expert judgment, rather than anything else. Hence consultative selling provides a basis from which to positively influence the intuitive element in the process of communicating and selling. 2.6. Proposed sales process for making the business case for new technology A review of the literature has revealed a key gap in terms of the lack of process for obtaining investment for intangible technologies, which is in contrast to sustained interest in technology evaluation methods. The review also provided evidence on what elements should be included in such a process. It emphasised the crucial importance of communication in making a business case, which suggests there may be benefit in incorporating well established sales techniques. This leads to the distinction between the seller of the technology and the buyer or customer for the technology. This appears to be a useful mechanism to promote a more commercial outlook for technologists seeking to sell technology across the innovation chasm. The review also highlighted the organisational context of such a justification process, including the practicalities of overcoming adoption barriers and securing resource allocation. The identification of these elements led to the development of an initial three step process activity model for selling technology: Understand, Develop, Present based on consultative sales principles: Understand what do these customers really need? Develop how can we construct a joint business case? Present how do we present the case to close the deal? The three steps in the proposed technology sales process are described in more detail below. Understand selected customers' needs: In this first step the emphasis is on building a deep understanding of the needs of the customers. This involves finding out who is actually in the buying centre, as this is not necessarily always the user of the technology (e.g. engineering or R&D department). This is the stage where the relationship is built between seller and customer. It is important that the seller listens carefully to find out whether the customer's problems might be solved by their technology. It is more important for the seller to understand the customer at this point rather than vice versa. In addition we argue that the systematic process of key account planning, which is very common in professional and mature sales processes, is equally appropriate at this stage of developing business for new technologies. Develop/construct the business case with the customer: This step involves a joint effort by both seller and customer to develop the business case to meet the customer's needs. The dialogue that emerges should eliminate any mismatch between the technology and the problem: if one party feels they have been misunderstood, the process can be fed back to the previous step.

D. Probert et al. / Technological Forecasting & Social Change 80 (2013) 11291139 Table 1 Company cases (6). Sector Aerospace (UK) Number of companies 2 Company size Large Role (and number) of people and type of interaction

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Automotive (UK/Germany)

Large

Imaging (UK) Industry research Organisation (Germany) Pharmaceutical manufacturing (UK)

1 1 1

Large Large Large

A1: Technology planning manager, Engineering CTO, Product manager, Finance (4) interviews A2: R&D technology managers (2) workshop Product planning managers (2) interviews Team project managers (2) interviews Team marketing managers (2) interviews Innovation leader, Operations manager, VC & external alliances director (3) interviews Technology transfer manager, New technology manager (2) workshop Collaborations manager (1) interview

A jointly-constructed business case prevents divergent expectations during its final presentation. This process is akin to a typical co-development process but, instead of focusing on the technology solutions, the focus is on developing the business model and case jointly with the potential customer. Present the business case and negotiate next steps: The last step is to present the business case for a go/no-go decision. By this time, the seller is well prepared and buy-in has already been established. The seller knows exactly what the customer requires and provides an unambiguous and understandable business case based on these requirements. This phase is characterised by typical and well known negotiation techniques when the final deal has to be agreed upon. The previous steps ensure good preparation to increase chances of success. This proposed process activity model was then tested by carrying out company case studies. 3. Research approach In order to carry out an initial validation of the three step technology sales process for making the business case for new technology six companies case studies [37] were carried out (Table 1) during second half of 2007 in the UK and Germany. These companies were chosen to give a wide spread of industries as a first stage validation of the proposed process activity model. For each company people representing the buying and the selling side for technology were sought. Data was collected by means of interviews and workshops in order to understand the process of technology sales, to map the real as-is processes and to understand the challenges involved for technologists obtaining buy-in for technology development. A semi-structured proforma was designed and this was applied by a team of three researchers, two of whom met with each company. The proforma covered background information about the company, the types of technology sales/marketing process implemented by the company, buyer and seller profiles, organisational context (roles, influences, processes and drivers) and details of how the business case is prepared. Additional questions on IP management and strategy effects, innovation and technology readiness and the use of tools and metrics used for measuring the business case were also asked. Specific problems, approaches and challenges or priorities were noted. The plan was to use mapping software to chart the as-is process, but it was found that companies were unwilling to hold specific mapping sessions and preferred interviews or workshop discussions. To overcome this set-back, efforts were made to generate graphical descriptions of each technology sales/marketing process given by the companies. 4. Results The results of the study have been summarised in Table 2. As the research progressed, a revised process activity model was developed. This is described with case examples and shown in Fig 1. In addition, drawn from literature and practice, some guidance on useful tools for each step of building the business case is given in Table 3. Finally an illustrated example from one case company is given in Fig 2. 4.1. Overview of the case studies The six cases illustrated a range of internal and external company perspectives to gaining investment in technology. The companies focused on different parts of the overall process of building the business case depending on their needs, and good evidence was found for these. In both the external and internal company situations, the customer refers to the person, or people, who make the decision on whether to invest in the technology. Table 2 shows an overview of the case content and findings and these are discussed below. In terms of the technology being sold to external customers, this was packaged technology (software or black box) for one company (Aero 1), and technology that was not core to their mainstream business for two others (Aero 2 and Pharma). For the IRO there is no core/non-core distinction as they aim to sell the know-how they develop rather than produce products. Two companies did not discuss an external process (Auto and Imaging).

1134 Table 2 Overview of case content and findings. Company Aerospace 1

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Technology what does the company wish to sell either externally or internally? External customer: software as technology, black box products Internal customer: decisions to give investment to R&D, Universities or SMEs to develop technology to proof of concept stage External customer: selling technology (know-how) developed alone or in collaboration with partners (e.g. Universities) Internal customer: n/a External customer: n/a Internal customer: when an external technology is interesting for possible investment by BU or R&D; or an internal technology has a stage gate review External customer: non-core IP from R&D Internal customer: n/a External customer: n/a Internal customer: new technology inputs to vehicle programs or production environment External customer: outlicensing of technology no longer required by company or as part of a collaboration, software licences Internal customer: drug delivery technology or manufacturing technology needed after molecular development of drug

Process steps and key issues revealed in case study The company showed a focus on active selling of technology in the company. Due to well established internal and external customers, market research was not seen as necessary. [Sales emphasis] The organisation focused on the importance of market research as a precursor to selling activities in developing the business case. [Market research emphasis] The company described a process including a well developed technology intelligence system. Hence responsibility for proposing investment in external technology is well defined. [Market research and sales]. The company discussed its existing process in a workshop and identified areas for improvement. [Market research and sales]. The company sees commercialising technology as a difficult internal process. It involves many influential stakeholders and interaction with established technology, product and financial systems. [Market research and sales] The company described a process but with interesting internal and external variation. Externally, a ventures group had recently disbanded. Internally, both the identification of the technology/ problem area and the development of the business case were highly influenced by therapy divisional chiefs. [Market research and sales].

Industry research organisation (IRO)

Imaging

Aerospace 2 Automotive

Pharma (manufacturing)

In terms of the technology being sold to internal customers, two companies focused on R&D investments (Aero 1 and Imaging) and two on securing go ahead for a technology into the production environment (Auto and Pharma). Additionally, the internal selling process can include securing investment for work to be carried out in Universities and SMEs, not just the company's own R&D department (Aero 1) or for obtaining R&D or BU funds to buy in technologies identified externally (Imaging). Two companies did not discuss an internal process (IRO and Aero 2). In reviewing the process steps and issues revealed that only one case (Aero 1) fitted the sales only model whereas the other cases all highlighted aspects of market research.

Fig. 1. The iterative five step process for securing technology investment, including both market research and sales elements.

D. Probert et al. / Technological Forecasting & Social Change 80 (2013) 11291139 Table 3 Linking tools to steps of the business case process. Tools to identify (step 1) Tools to select (step 2) Tools to understand (step 3) Tools to develop (or construct) the business case (step 4) Tools to present (step 5)

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Searching, scanning, technology intelligence Force field analysis, mind-maps, databases, score cards, portfolio management, SWOT Listening/questioning (open), use of demonstrators, practice in being challenged Structuring and visualisation, business model templates, options thinking, demonstrators, project planning, financial projections e.g. DCF/NPV, business model options, straw men presentations. Presentation skills, demonstrators, closed questions, walk-away price, negotiation skills

4.2. Revising the process Due to the established need for a focus on communication as much as technology, a sales oriented process with three main steps had first been proposed, with emphasis on securing internal investment. However, as case data was gathered, and with reference to the previously reviewed literature and trends towards more open innovation [38], two earlier market research steps were added. This opened up the process more explicitly to the increasing need to access external buyers or customers. The result is an iterative five step process which can be summarised in terms of the questions each step poses and represented diagrammatically in Fig 1. Step 1: Step 2: Step 3: Step 4: Step 5: Identify what problems can our technology solve? Select how do we select potential customers? Understand what do these customers really need? Develop how can we construct a joint business case? Present how do we present the case to close the deal?

4.3. Detailing the ve process steps The cases allowed the building of a five step generic process for securing technology investment from a seller's perspective. These steps represent the generic market research and sales activities that support a business case and apply to both internal and external customers for technology. The full set of steps is described below with case illustrations from the research findings. 1. Identify the technology/problem combination The first step has been designed to combine market research and technology intelligence, and focuses on identifying the key markets or industries that could benefit from the technology. This involves actively seeking problems for which the technology can produce a benefit. The technology/problem combinations may be identified using methods such as market segmentation and by listing potential customers, both internally and externally. In one case example, a research institute identified external partners for developing its technology by identifying and mapping interesting sectors, using lateral thinking to find unidentified problems and then listing possible partners. In another, an R&D department reviewed the future needs of product lines using roadmaps and strategy documents, and then drew up a short list of possible internal customers. A third case shows how second income source opportunities were identified by linking intellectual property developed for internal applications to external third party technological requirements. 2. Select potential customers and sales strategies This step aims to find out which customers have a clear need for the technology. Typical criteria for customer selection include the benefit and value of the technology/problem combination, availability of the necessary funds, and whether the individual has the authority to make the investment. In one case example a company carried out a prior art search to select potentially interested individuals within the company. In a second case a pre-selection of potential customers was made by aligning need and buying power. 3. Understand selected customers' needs Here, the emphasis moves from market research towards building a deep understanding of the needs of the customers. This involves finding out who is actually in the buying centre, as this is not necessarily always the user of the technology (e.g. engineering or R&D department). This is the stage where the relationship is built between seller and customer. It is important that the seller listens carefully to find out whether the customer's problems might be solved by their technology. It is more important for the seller to understand the customer at this point rather than vice versa. In addition we argue that the systematic process of key account planning, which is very common in professional and mature sales processes, is equally appropriate at this stage of developing business for new technologies. In one case company, meetings involving independent experts were held with four potential external customers that had been shortlisted as good targets, two in different industries and two in the same industry as the selling company. The capabilities of the technology were demonstrated and there was informal interaction to explore what the customer really needs. An example of an internal initiative involves extensive informal networking to understand the needs and motivations of the internal funders. 4. Develop/construct the business case with the customer The fourth step involves a joint effort by both seller and customer to develop the business case to meet the customer's needs. The dialogue that emerges should eliminate any mismatch between the technology and the problem: if one party feels they

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Example: technology scout identifies an interesting technology


Informal ormal communication 1 to 1 conversations or sentation at weekly scout presentation meeting eting Technology hnology champion pens relationship with deepens the external xternal party and collects cts evidence of ical details. Iterative technical series of visits, e -mails, phone calls Understand potential assessors needs. Networking informally with headquarters and reviewing technology roadmaps, internal web pages.

Formal presentation of the technology to the assessing body. 30 min presentation (in conference call). 30 min discussion negotiation.

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Select potential individuals who are most likely to be interested in the technology.

GO NO GO DECISION

Ask colleagues about previous interaction with those assessors

Identi Identify e fy

Select

Understand

Construct
Build demonstrator (e.g. video) in collaboration with colleagues. Informally test demonstrator with assessors and assessor assessors collaborators.

Present

Internal al networking to stand viable options understand o obtain support by and to head of the technology igence group. intelligence

Understand reviewing mechanisms. Panel review.

Informal rmal networking with headquarters adquarters to understand potentially entially interested dividuals and groups. individuals

Understand potential influencers lobbying mechanisms.

Fig. 2. High tech company process for building the business case for investment.

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have been misunderstood, the process can be fed back to the previous step. A jointly-constructed business case prevents divergent expectations during its final presentation. This process is akin to a typical co-development process but, instead of focusing on the technology solutions, the focus is on developing the business model and case jointly with the potential customer. A case example revealed a formal internal process whereby the finance group collects data for competing business cases from all stakeholders using templates. They then organise opportunities for debating the inputs and implications. Another case showed a technology seller setting up a structured programme of business case development with the key contact in the customer company. The programme included discussion, testing and revision stages. 5. Present the business case and negotiate next steps The last step is to present the business case for a go/no-go decision. By this time, the seller is well prepared and buy-in has already been established. The seller knows exactly what the customer requires and provides an unambiguous and understandable business case based on these requirements. This phase is characterised by typical and well known negotiation techniques when the final deal has to be agreed upon. The previous steps ensure good preparation to increase chances of success. A case company described how funding cases are presented to the finance department, the corporate and technology boards and the division heads, but the process relies heavily on lobbying key personnel in advance and the interpretation of the financial analysis. In another case, the final pitch needs to include vision as well as the business case, and a person with proven reputation is chosen to present or at least openly support the proposal. 4.4. Tools to support the development of the business case The research proposes a five step process for building the business case for new technology investment. However, what techniques should be used to support these steps? Drawing upon literature and practice, specific tool guidance can be detailed for the steps of the process by considering the nature of the activities involved (Table 3). 4.5. A company example of the ve step process of building the business case The five steps are illustrated in a case from a high tech company as represented in Fig. 2. The company is a multinational organisation with headquarters in the USA and subsidiaries worldwide. The company has given particular attention to building and improving the technology intelligence system, which designates certain staff to look (or scout) for new opportunities. In this case a scout works towards the presentation of a business case on an interesting technology. Although the technology is of medium maturity, it can be seen that the five steps of the process are largely informal. 5. Discussion The initial three step sales process was exposed to industrial practice and found to omit important market research considerations. On returning to the reviewed literature, resonance with this omission was found and so a revised process activity model was constructed with two additional steps, giving a five step process for making the business case. The five step process opens up the area of business application from primarily internal business case development to incorporate selling technology externally. Key considerations include technology valuation, technological maturity, intellectual property and organisation and external context. How does the proposed process fit with evaluation of technology? Valuation work is seen as both a trigger and an input to the process. The early realisation of the potential value of a technology may be less based on tools and techniques and more on insight and gut-feel, but a subsequent matching (Freeman 1982) of technology and opportunity is the start of the business case journey. Later on, the use of more formal techniques for quantifying and visualising value form part of the business case preparation, giving the crucial depth (Dean 1987) to the argument. What is the role of technology maturity? The maturity of the technology affects the degree of uncertainty. The nearer the technology is to application or market, the easier it is to construct the business case. A valid question at the start of the process is whether a small amount of addition development would enable the technology to offer more value. Later on, the selection of customers is influenced by technology maturity. For early-stage technologies, innovation funds may be applicable. It is also worth establishing if the potential customers are aware of technology maturity concepts. How does the process incorporate IP issues? At the start it is worth reviewing what knowledge, competence, software, copyright or patents are involved. As the process moves to considering potential partners it is necessary to be aware of the danger of exposing IP to potential customers before agreement is reached in principle. Ultimately however, the way the IP is packaged needs to be acceptable to the buyer. If the final presentation is made externally, confidentiality issues need to be addressed. How does the process take into account organisational issues? The political context of the process is implicit in its structure, primarily in the joint preparation of the business case with the customer/buyer. This seeks to ensure that many of the necessary clarification and negotiations take place as part of the process rather than being raised at the final presentation. For example as part of understanding the needs of the selected customers it is important to involve all internal stakeholders and the most significant external interested parties in the discussion process.

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5.1. Contribution The process activity model seeks to combine two diverse areas of literature, technology management and consultative sales. The success of this endeavour is whether it results in a process which gives technologists more confidence in preparing a well founded business case and, ultimately, better outcomes. Although the case studies gave good support to the process, and the process was revised in line with research findings, this will only be proved with time. It is hoped that the process structure, the suggested supporting tools and the case examples will provide an illuminating insight, or checklist, for practitioners. However the process can be reviewed from an academic perspective in terms of completeness and consistency. Our reference point is the technology management framework previously introduced [8] and the streams of literature reviewed. We contend that a constructive exploration of the literature has ensured that the process has a firm foundation. A number of questions can be asked. Are all the issues associated with the acquisition and exploitation of technology addressed? No, it does not support every aspect but aims to cover the ground while delivering a lean process. Does the process fill the gap in the literature with respect to building a business case for new technologies? Yes but needs more development. The proposed approach is pragmatic with novel aspects and is a good platform for further work. 6. Conclusion This paper has identified a need to strengthen the understanding of a more commercial orientation within the process of building the business case for new technologies, for both internal as well as external customers. We propose that integrating the concept of consultative selling and market research could be one way to do this. The cases support the contention that the identified gaps in literature are also visible in practice. These include the need for a communication focus, a shift in perception required to cross the innovation chasm from technology enthusiast to a more mainstream viewpoint, and the organisational realities of winning over stakeholders in advance, translating benefits and giving depth to intrinsically uncertain analyses. Based on the theoretical and industrial analysis this paper proposes a 5 step process activity model to build the business case for winning investment in new technology, and provides illustrations on how this could be implemented. The contribution to practice is an insight or checklist for companies building a business case for technology, including suggestions on specific tool choice at each step. The contribution to theory is an explicit linking of technology and engineering management to the consultative sales literature to provide a preliminary process for intangible technology sales. The implications for the research are that the process activity model should be further examined to provide greater insight into the effective communication of technology potential. This model is the first that links a number of theoretical streams with promising validation found in the six cases, and a larger study could build this into a practical framework. References
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David Probert pursued an industrial career with Marks and Spencer and Philips for some 18 years before returning to the University of Cambridge in 1991. His experience covers a wide range of industrial engineering and management disciplines in the UK and overseas. He joined the manufacturing engineering research group as Royal Academy of Engineering/Lucas Industries Research Fellow, to develop a practical approach to the issues of vertical integration in manufacturing industry, which has been widely applied and disseminated. Now a Reader in the Engineering Department and Director of the Centre for Technology Management at the Institute for Manufacturing, his current research interests are the management of technology and manufacturing make or buy. Marcel Dissel joined the Institute for Manufacturing in 2004 as a part time Senior Research Associate. Currently Marcel is CEO at Treffert Group a leading provider of industrial coating solutions. Prior to this role he founded Dissel Ltd. (GB) and Dissel GmbH (CH) focusing on business consulting, turnaround and interim management and training. Recently he was CEO a.i. of the AO Foundation, responsible for the implementation of a large turnaround project. He holds lectureships at Tiasnimbas Business School and Steinbeis University. Marcel holds an MSc in business administration from the Rotterdam School of Management, and a PhD in technology and innovation management from the aerospace faculty of the University Bw Munich. Clare Farrukh is a Senior Research Associate at the Institute for Manufacturing, Cambridge University Engineering Department. She holds a BScBEng in Chemical Engineering from the University of Nottingham and an MSc in Organizational Behaviour from Birkbeck College, London. She spent six years with Ciba-Geigy as a process engineer working on engineering projects and new product introduction, in process plant and composite manufacturing environments, before joining the University in 1995. Her research activities are concerned with the development of practical tools for supporting technology management in industry, including a methodology for assessing technology management processes and a fast-start roadmapping technique. Letizia Mortara joined the IfM's Centre for Technology Management as a Research Associate in 2005. Letizia has a rst degree in Industrial Chemistry gained at the University of Bologna in Italy. After spending three years working as a process/product manager in the chemical industry, she moved to the UK where she gained her PhD in processing and process scale-up of advanced ceramic materials at Craneld University. Letizia's current focus is in the areas of Technology intelligence (i.e. activities required to keep up to date with the latest developments in technology), Open Innovation and the Role of Intermediaries. Val Thorn was an Industrial Collaborator on the IMRC Software Sourcing Project at the IfM and continued her research as an industrial visitor on a part time basis working on the BATP valuation project with CTM until September 2006. In October 2006 she registered for a PhD in the area of embedded software reuse, including the value and worth of IP. She started her career with British Telecom and worked in the UK and overseas on a variety of telecoms related projects before setting up AND Technology Research where she remains CEO. AND Technology Research specialises in embedded computing technologies and provides R&D services for electronic product development and ambient computing. The success of the company has been recognised with awards for enterprise, technology and innovation. Rob Phaal joined the Centre for Technology Management in 1997, based in the Institute for Manufacturing, a Division of the Engineering Department at the University of Cambridge. He is now a Principal Researcher, and continues to conduct research in the area of strategic technology management particular interests include technology evaluation, the emergence of technology-based industry, the use of visual techniques for strategy, and the development of practical management tools. Rob has a mechanical engineering background, with a PhD in computational mechanics and industrial experience in technical consulting, contract research and software development. Strategic technology roadmapping has been a key area of ongoing interest, in terms of both research and practice.

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