Data Bases • Custom Term Papers • Free Term Papers • Free Research Papers • Free Essays • Free Book Reports • Plagiarism? Links • Top 100 Term Paper Sites • Top 25 Essay Sites • Top 50 Essay Sites • Search 97,000 Papers @ DirectEssays.com • Search 101,000 Papers @ ExampleEssays.com • Search 90,000 Papers @ MegaEssays.com Free Essays • Term Paper Sites • Chuck III's Free Essays • Free College Essays • TermPaperSites.com • My Term Papers • Get Free Essays • Essay World • Planet Papers	Search Lots of Essays Back to Subjects - Technology Mr1 Mr1 There is a great need for firms to consider the future. Given the rate of technological innovation and the scope and impact of ‘disruptive’ technologies, if firms are to predict and exploit their future markets, the role for technological forecasting and analysis is likely to become more prominent. In this paper, two methods (Delphi & Scenario Writing) will be examined in terms of their relative merits and use. The attention will then turn to the nature of use within the firm of both techniques in a technological forecasting context. The Delphi method can be traced back to 1944 when the US military prepared a forecast of future technological capabilities that might be of interest. In 1946, Project RAND (an acronym for Research and Development) was established with a brief to study the "broad subject of inter-continental warfare other then surface." The problems encountered by this project and subsequent work centred on the conflicting information solicited from the ‘experts’. Single experts sometimes suffer biases; group meetings suffer from "follow the leader" tendencies and a reluctance to abandon previously stated opinions. In order to overcome these shortcomings the basic notion of the Delphi method were developed in the 1950s and 1960s at the RAND Corporation. The first uses of Delphi were in the forecasting of military requirements in the context of the ‘cold war’ with the Soviet Union. The objective of Delphi applications is the reliable and creative exploration of ideas or the production of suitable information for decision-making. The Delphi Method is based on a structured process for collecting and distilling knowledge from a group of experts by means of a series of questionnaires interspersed with controlled opinion feedback. Delphi represents a useful communication device among a group of experts and thus facilitates the formation of a group judgement. This makes discussion between experts possible without permitting a certain social interactive behaviour as happens during a normal group discussion that impedes opinion forming. The Delphi method can be broken down into the following ten steps. 1. Formation of a team to undertake and monitor a Delphi on a given subject. 2. Selection of one or more panels to participate in the exercise. Customarily, the panellists are experts in the area to be investigated. 3. Development of the first round Delphi questionnaire 4. Testing the questionnaire for proper wording (e.g., ambiguities, vagueness) 5. Transmission of the first questionnaires to the panellists 6. Analysis of the first round responses 7. Preparation of the second round questionnaires (and possible testing) 8. Transmission of the second round questionnaires to the panellists 9. Analysis of the second round responses (Steps 7 to 9 are reiterated as long as desired or necessary to achieve stability in the results.) 10. Preparation of a report by the analysis team to present the conclusions of the exercise The outcome of a Delphi sequence is nothing but opinion. The results of the sequence are only as valid as the opinions of the experts who make up the panel. The panel viewpoint is summarized statistically rather than in terms of a majority vote. When the Delphi method was first applied to long-range technology forecasting, potential future events were considered in isolation from one another. Later on, the notion of cross impacts was introduced to overcome the shortcomings and enhance the Delphi approach. Delphi is used in industry, government, and academe. Since the 1950s several research studies have used the Delphi method, particularly in public health issues encompassing opinion on policy regarding drug control and the HIV epidemic. Manpower forecasting, given the quantitative nature, is an unexpected area that Delphi has been used in. In actual fact, studies have consistently shown Delphi to perform favourably in comparison to quantitative methods in predicting employment figures for the future. However, there have been critiques of the Delphi method and assertions it as being unscientific; owing to the inherent nature of the method of essentially iterative opinion collating . The Delphi method has an intrinsically low level reliability of judgements among experts and therefore dependency of forecasts on the particular judges selected. The open-ended style questioning of Delphi is argued to cause sensitivity of results to ambiguity in the questionnaire and cast greater doubt. Furthermore, the difficulty in assessing the degree of expertise incorporated into the forecast is subjective and therefore determined by the quality of methodology in selecting and using the opinions gained. Beyond governmental institutions such as the military, DIA and CIA, where Delphi is used in long-term policy formulation, Delphi has been used in firms such as TRW, Martin-Marietta, McDonnell Douglas and Monsanto Chemical for forecasting technology. The use of Delphi is not restricted to technology orientated firms, even the ‘Society of Acturies’ commissioned a Delphi study that investigated issues of health expenditure, national debt and life expectancy and the likely impacts such predictions were to have on their industry. Indeed, in 1985, it was reported that 50 to 100 corporations were using Delphi as a planning tool. In the 1970’s Canada Bell (separate from Bell AT &T) used a series of studies to assess technological impacts in the future. Amongst the studies was a substantial devotion to ‘substituting telecommunications for travel’. A holistic approach was used and Delphi formed the foundation for the investigation - it was the first method employed to gain an insight into the likely technologies that would enable ‘substituting telecommunications for travel’. Further to this, cross impact and cost benefit analysis was used to build up an idea of the ramifications if people stayed at home to work or be educated. Delphi was used to assess the technological feasibility, and from that, the other methods drew from the results and were used to estimate the costs and bearings such a move would have on society. The results of the study rightly suggested that the benefits that substituting telecommunications for travel were outweighed by the cost in developing the infrastructure for such a move. A technique that is gaining popularity and uses Delphi as an input, is technology road mapping. This projects major technological elements of product design and manufacturing together with strategies for reaching desirable milestones efficiently. Roadmaps typically run several technology or product generations (e.g. 2-10 years) ahead. In its broadest context, a science and technology roadmap provides a consensus view or vision of the future science and technology landscape available to decision makers. Thus the predictive element emphasized in early technology forecasting is supplemented with a normative element, that is however narrower, more targeted, and more directly actionable than is the normative element implicit in technology assessment. At the macro level, technological road mapping involves a reliance on participatory processes such as Delphi to draw inferences. In this way, Delphi’s use in road mapping, can stimulate and enhance the strategic foresight in corporate level development for technology acquisition and innovation strategies at the firm. The roadmap is a proto-strategic plan. Scenario Writing has its origins with Herman Kahn in the 1960s as a tool for business. It builds logical sequences of events in an organisation's 'external' environment in order to show how future states might evolve from the present. It does not predict. Rather, using a facilitated workshop approach, scenario building establishes several plausible and internally consistent stories of the future. These explore critical uncertainties and possible developments in key variables. Cornish (1977) describes a scenario in simple terms: "it is simply a series of events that we imagine happening in the future." In other words, scenario writing is "making up stories about the future" . Schwarz, Svedin, and Wittrock (1982) note that the term "scenario" has numerous meanings. It can be used as a description for "a hypothetical, likely or unlikely, development or situation; a development which is described as caused to some extent by the actions and reactions of various actors: a desirable or nondesireable development or situation" . Scenario Writing can be broken down into four steps 1. Generating a list of affecting trends or factors – this encompasses technological, social and economic factors in both qualitative or quantitative measures. 2. Combining the variables into groups. At the second step, almost all scenario-writing procedures rank or combine the identified drivers into a smaller, more meaningful set that can then be used to structure the scenarios. From this, a number of scenarios may emerge, sometimes with probabilities attached to their likely fruition – a common approach is to split the scenarios by assessing two variables and thus formulating a 2x2 matrix yielding four scenarios. 3. Write the scenarios: a number of choices has to be made here, such as actual number of scenarios, themes to stress and use of statistical data to support the arguments made. 4. Creating strategies – following the analyses, strategic planning to cope with the expectations and impacts the scenarios suggest should take place. This aspect is sometimes considered to augment the scenario writing, rather than be part of it; regardless, this is an important phase to undertake if the full benefits of scenario are to be reaped. Scenarios serve three basic purposes: 1) to display the interactions among several trends and events in order to provide a holistic picture of the future; 2) to help check the internal consistency of the set of forecasts on which they are based; and 3) to depict a future situation in a way readily understandable by the non-specialist in the subject area. Scenario does not pretend to predict the future, rather, it present a set of possible futures. A key advantage of scenario writing is the contrast created when users are presented with discrete sets of possibilities; this allows the formulation and consideration of dichotomies and decisions the concerned organisation has in the future. The multiple ‘possible futures’ that is generated can be problematic when devising strategy to cope with the long-term connotations that are implied by the analysis. The following approaches have been put forward to deal with this: · Defensive straddle – this is a strategy devised to perform adequately in all envisaged scenarios. The opportunity for high growth is sacrificed for a strategy that minimises the magnitude of possible disruptive permutations. · Multiple coverage – this is similar to the previous except, a more entrepreneurial attitude is taken. A concurrent strategy is taken; each scenario is pursued for preparation so the organisation is well placed for all eventualities. · Flexible/Postponement Strategy – the premise that no one can predict the future with any certainty leads to a postponement strategy that is similar to the case for a late entry as opposed to a first mover in analogy to market competition. · Focus on a Single Scenario – the scenario most likely is chosen over the other possibilities. Strategy is then aligned with the impacts of this choice. By far the riskiest and most entrepreneurial strategy because it negates any bearing that other scenarios purport. Some claim that the value of a forecast is dependent upon the underlying assumptions, and that quite often several sets of assumptions can be offered upon which a number of scenarios can be constructed; no forecast should be published, without associated probabilities. However, scenario writing, as mentioned prior, does not generate or present the same degree of specificity as forecasting and as such, should not strive for a precision that qualifies for quantitative scrutiny. In this manner, it is perhaps better to consider scenario writing as an alternative to forecasting; a process that invokes ideas and possible directions at a meta level, in contrast to forecasting which conjures up the notion of accurate operational planning as a result of the analysis. Scenario Writing is now used in a multitude of sectors, including utilities, telecommunications and health care. However, Scenario Writing is notoriously associated with its use in the oil industry, dating back to the 1960’s. After the Arab oil embargo of 1973, Shell incorporated scenario planning into their strategic planning process. The prior attitude that oil prices were solely driven by supply and demand had passed, the previously thought impossible had happened – oil prices were strongly tied to political events and these eventualities had to be planned for. As a result, Shell were prepared, using scenario, in the oil shocks of 1979, when they had agreed with their suppliers to long term, price locked contracts that weathered them through the troubled period for the whole industry. Since the demonstration of scenario as a tool in the commercial capacity, there has been an increasing use of scenario. At the moment, some people in industry have great belief that scenario is of great aid in the short term; given the rapid rate of changing business environments that firms now inhabit. Amy Oberg, former CIO of Enron ironically remarks “the tactical is becoming the strategic because of the compressed time frame”. As an example, Cigna Corp, an insurance firm, used Scenario Writing to estimate the impact of the Internet on the medical industry in 1995. Then CTO, Steve Androle, and his team identified the role of technology and government as the main drivers of the Internet. Four scenarios were envisaged ranging from the ‘big brother’, where the state would use the information capabilities to increase regulation and bureaucracy, to, ‘wired, wired world’, that saw the Internet as ubiquitous in connecting everyone to everything. Both these scenarios were extreme, however, what was indicated in both, was the serious need to invest in IT infrastructure and the acquisition of skilled technical personnel – this investment was consistent in all four of the scenarios. The scenario team prepared a priority list that was used to allocate the resources in the annual R&D budget. Furthermore, Cigna abandoned the technology that would enable them to ‘cross sell’ their product range. The technology, ‘data mining’ and extensive ‘data ware housing’, that could provide this functionality, would simply be unprofitable in returns considering the extra capacity that the IT system would need. Cigna had identified the technology strategy (not) to acquire and this affected their corporate strategy. The techniques Delphi and Scenario Writing has been discussed in terms of their use in the firm. It has been shown how Delphi can be used in developing R&D portfolio. Delphi has also been discussed in more general terms in its use to predict future trends within sectors and industries as well. Scenario Writing has similarly been discussed and it has been shown how it can be used as a qualitative tool in developing strategy. What is common to both techniques is their use in the context that they should form part of, rather then, entirely, the process of devising strategy. The benefits of Scenario Writing and Delphi can only be fully utilised if they are, like any technique, seen in their circumstance – the available expertise, information and level of (un)certainty. Moreover, these and other techniques are most effective when used collectively with other analytical tools, for example, Delphi might be used as an input to Scenario Writing. The use of these tools in potentially all sectors (e.g. even actuary & insurance firms have formed part of the analysis) is a telling sign of the power of the techniques, and in particular, the importance of technology evaluation and strategy in commerce today. The premier strategy-consulting (McKinsey’s, Deloitte Consulting, Boston etc) firms are advocates of the techniques; whether this is an endorsement of the quality of the techniques depends on perspective. What this suggests is the continued proliferation and use of these techniques. [1] University of Illinois Online Teaching Resources: The Delphi method (2002) [2] Adams, S J: Projecting the next decade in safety management-a Delphi study, society of safety engineers (October 2001) [3] Fowles, J: Handbook of Futures Research. Westport/Connecticut, London Publishing (1978) [4] Sackman , H: Delphi assessment; expert opinion, forecasting, and group process, RAND Corporation, April (1974) [5] Dalkey, N: The Delphi Method: An Experimental Study of Group Opinion. RAND Corporation (1969). [6] Acturies look into the millennium, Society of Acturies (1999) http://www.soa.org/newsroom/finalreport.html [7] Adams, S J: Projecting the next decade in safety management-a Delphi study, society of safety engineers, (October 2001) [8] Day, Lawrence :Technology Assessment in Bell Canada (1974) http://www.wws.princeton.edu/cgi-bin/byteserv.prl/~ota/disk3/1976/7622/762209.PDF [9] Coates, Joseph: Technology forecasting for business clients (2001) http://josephcoates.com/pdf_files/217_Tech_Forecast_for_Biz.pdf [10] Cornish, Edward: The Study of the Future, Washington D.C, World Future Society (1977) [11] Schnarrs, S : The Essentials of Scenario Writing, Business Week (July 2001) Godet, Michel: "Scenarios and Strategic Management” Butterworths, London, (1987). Bibliography: References [1] University of Illinois Online Teaching Resources: The Delphi method (2002) http://www.iit.edu/~it/delphi.html [2] Adams, S J: Projecting the next decade in safety management-a Delphi study, society of safety engineers (October 2001) [3] Fowles, J: Handbook of Futures Research. Westport/Connecticut, London Publishing (1978) [4] Sackman , H: Delphi assessment; expert opinion, forecasting, and group process, RAND Corporation, April (1974) [5] Dalkey, N: The Delphi Method: An Experimental Study of Group Opinion. RAND Corporation (1969). [6] Acturies look into the millennium, Society of Acturies (1999) http://www.soa.org/newsroom/finalreport.html [7] Adams, S J: Projecting the next decade in safety management-a Delphi study, society of safety engineers, (October 2001) [8] Day, Lawrence :Technology Assessment in Bell Canada (1974) http://www.wws.princeton.edu/cgi-bin/byteserv.prl/~ota/disk3/1976/7622/762209.PDF [9] Coates, Joseph: Technology forecasting for business clients (2001) http://josephcoates.com/pdf_files/217_Tech_Forecast_for_Biz.pdf [10] Cornish, Edward: The Study of the Future, Washington D.C, World Future Society (1977) [11] Schnarrs, S : The Essentials of Scenario Writing, Business Week (July 2001) Godet, Michel: "Scenarios and Strategic Management” Butterworths, London, (1987). Word Count: 2747
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