Scrabbling through Odd Technology Terms



Odd Technology Terms
As I constantly update my course materials on Technology Procurement, I encountered some odd species of I.T. and technological jargon, which I wanted to share in this post. 
Some are strange, others puzzling. Still, all of those are useful to know if not practiced.
I cannot promise revelations, but it is an excellent addition to your Scrabble vocabulary, as a minimum. 

Disintermediation

Disintermediation is the process of removing intermediaries from a supply chain. In the procurement world, this means directly engaging with manufacturers or service providers instead of going through distributors, agents, or other middlemen. By eliminating these intermediaries, companies can achieve cost savings, better communication, and greater control over their supply chain.

Example: Farm-to-table. 

In the farm-to-table movement, restaurants source ingredients directly from local farmers rather than through wholesalers. This direct relationship can ensure fresher produce, support local economies, and reduce the carbon footprint associated with transportation.

Servitization

Servitization is the transformation process where a company transforms from selling products to offering comprehensive solutions combining products and services. This business model creates customer value through goods, services, support, self-service, and knowledge. By integrating services with products, companies aim to build longer-lasting customer relationships, increase revenue streams, and differentiate themselves in competitive markets. 

Servitization often involves a shift in business strategy, organizational structure, and capabilities to support the delivery of these integrated solutions.

Example: Rolls-Royce "Power-by-the-Hour" program.

Instead of selling jet engines, Rolls-Royce provides a service where airlines pay for the hours an engine operates. This program includes maintenance, repair, and overhauls, ensuring that engines are always in top condition and reducing airline downtime.

Ambidexterity

Ambidexterity in a business context refers to an organization's ability to simultaneously pursue exploration and exploitation activities. 

Exploration involves seeking new knowledge, innovations, and opportunities, while exploitation focuses on refining and optimizing existing processes, products, and services. 

An ambidextrous organization can balance these two aspects, fostering innovation and adaptability while maintaining efficiency and reliability in its core operations. This dual capability is crucial for long-term success, allowing a company to thrive in dynamic and competitive environments.

Example: IBM.
IBM exemplifies ambidexterity by continuously investing in cutting-edge research and development (exploration) and enhancing its established products and services (exploitation). This approach has enabled IBM to remain a leader in the technology industry for decades.

Digitization vs. digitalization

Digitization: Any time you translate something into bits and bytes—for example, by scanning a photo or a document—you are digitizing that object.

Digitalization: when data from throughout the organization and its assets is processed through advanced digital technologies, which leads to fundamental changes in business processes that can result in new business models and social change.

Effectiveness vs. efficiency.

Effectiveness: doing the right things to achieve a desired outcome.

Efficiency: doing things in the best possible manner with the least waste of time and effort.

Effectiveness is about achieving goals, while efficiency is how resources are used.


Effectiveness (B-17 Flying Fortress): achieved strategic bombing goals focusing on quality and capabilities, even if it meant higher costs and longer production times.
Efficiency (Liberty Ships): Met urgent supply chain demands through fast, cost-effective production, prioritizing quantity and speed over individual ship quality.

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More information on this and other exciting topics can be found in "The Technology Procurement Handbook." It represents 23 years of experience, billions of dollars worth of successful sourcing projects, and 1000s hours spent on research, analysis, and content creation for the most demanding professional readers.
The Technology Procurement Handbook front page
 




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