development of a model of product innovativeness for large packaged software: a design science...

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Development of a Model of Product Innovativeness for Large Packaged Software: A Design Science Approach

MBIS(Hons) Minor ThesisFinal Presentation

Mr Steve RemingtonDecision Support Systems Laboratory

Supervisor: Emeritus Prof David Arnott

Minor Thesis Final Presentation - Steve Remington 2

Agenda Key Definitions Research Method and Strategy Design Science Phases

– Problem and Relevance– Industry Case Study– Literature Review– Draft Model Design– Evaluation Method Selection and Design– Reflection

November, 2012


Key Definitions Business Intelligence (BI) Platform

– A system that can “…enable all types of users – from IT staff to consultants to business users – to build applications that help organisations learn about and understand their business” (Gartner, Inc. 2012c)

Large Packaged Software (LPS)– “A packaged configuration of software components or

a software-based service, with auxiliary materials, which is released for and traded in a specific market, and that requires a significant amount of customisation and implementation work to be done before it can meet the requirements of the customer.” Xu & Brinkkemper 2007)

November, 2012


Key Definitions Innovation

– “An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations.” (OECD / Eurostat 2005)

Innovativeness– “…a measure of the degree of ‘newness’ of an

innovation” (Garcia and Calantone 2002)

November, 2012

Minor Thesis Final Presentation - Steve Remington 5November, 2012

Design Science: Guidelines

Suggestion

Awareness

Evaluation

Reflection

Development

Identify and define the problem.Determine academic and practical relevance

Investigate the problem in more detail. Create a tentative design for an artefact and develop evaluation criteria

Design an artefact that realises the tentative design

Assess how well the artefact performs with respect to the evaluation criteria.

Assess the rigour with which the research was conducted and the overall quality of the artefact

Approach based on design science research guidelines developed by Vaishnavi and Kuechler (2007)


Design Science: Strategy for this ProjectPractitioner and

academic relevance of the problem, and scope

of research

Practitioner concerns about reduced

innovativeness in BI software post-2007

Design of focus group to evaluate the model of

software product innovativeness

Concerns about innovativeness in BI software post-2007

acquisitions

The Artefact:Model of product

innovativeness for large packaged software

Knowledge of software vendor innovation and

general models of product innovativeness

Hevner et al. guidelines to evaluate design science research

Understanding of problem, tentative

design and evaluation criteria

Study of innovation in a BI software vendor

Literature review of product innovativeness

Suggestion

Awareness

Evaluation

Reflection

Development


Awareness

Suggestion

Evaluation

Reflection

Development



Practitioner and academic relevance of the problem, and scope

of research


acquisitions












Awareness


Significance of the BI software market The dominant

technology for DSS in medium and large organisations

A very high technology priority of CIOs for five of the last seven years

Significant money is spent on this software (US$7.8B in 2011) 2006 2007 2008 2009 2010 2011

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Global BI Platform Market

Ann

ual W

orld

wid

e R

even

ue (U

S$M

)

November, 2012

(Gartner, Inc. 2008a; Gartner, Inc. 2008b; Gartner, Inc. 2009a; Gartner, Inc. 2009b; Gartner, Inc. 2010a; Gartner, Inc. 2010b; Gartner, Inc. 2011a; Gartner, Inc. 2011b; Gartner, Inc. 2012a ; Gartner, Inc. 2012b)


2007: The Year of Consolidation

November, 2012

13.7%

1.2%

9.4%

18.2% 7.9%

10.6% 14.5%

(Gartner, Inc. 2008a; IBM Corp. 2007; Oracle Corporation. 2007; SAP AG. 2007)


2007: The Year of Consolidation

November, 2012

10.6%

13.7%

26.3%

10.6% 14.5%

(Gartner, Inc. 2008a; IBM Corp. 2007; Oracle Corporation. 2007; SAP AG. 2007)


What is… No suitable model of

product innovativeness to assess BI platform software from different vendors

What should be… A model of product

innovativeness for LPS suitable for academics and practitioners (the artefact)

November, 2012

The Problem“A perceived difference between what is and what should be.”

(Kroenke, Unknown cited in Venable 2006 p. 185)

Relevance of the Model Academic

– Researchers use it to study the affect of innovativeness of LPS. Practitioner

– Organisations can use it as part of product evaluation processes.


Suggestion: The Industry PerspectivePractitioner and


of research










acquisitions






Suggestion

Awareness

Evaluation

Reflection

Development


Case Study Organisation

– Cognos Inc. (acquired by IBM in 2007) Method

– Literature-Based Innovation Output Indicator (LBIOI) (Edwards and Gordon 1984)

– A form of content analysis used in innovation research Data Source

– 17 years of press releases and financial statements Classification scheme emerged from content Compared pre-acquisition and post-acquisition

innovation behaviour to see if there was changeNovember, 2012


The LBIOI Process1.

Identify reporting sources

2.Select reporting

service

3.Select time

period

4.Design

classification and database

5.Collect data and

store in database

6.Collect additional

data(if necessary)

7.Analyse data

8.Report findings

November, 2012

(Edwards and Gordon 1984)


Classification Scheme

November, 2012

Product andTechnology (P)

ProductOutput (PO)

TechnologyAcquisition (TA)

ProductRelease (PR)

ProductApplication (PA)

TechnologyLicensing (TL)

TechnologyPurchase (TP)

ProductIntegration (PI)

Product and Technology

Type

Product and Technology

Sub-Type

Product Output Version

NewProduct (NEW)

MinorVersion (MIN)

MajorVersion (MAJ)

NewProduct (NEW)

MinorVersion (MIN)

MajorVersion (MAJ)

NewProduct (NEW)

MajorVersion (MAJ)

MinorVersion (MIN)

Press Release Type


Findings and Conclusions 1,376 press releases analysed 197 product and technology press releases found 230 discrete innovation events identified Innovation output is highly variable over time Identified a shift from “product” to “marketing”

innovation Weak evidence to support reduction in innovation

output post acquisition– Results may be confounded by change to press

release process caused by acquisition by IBM

November, 2012


0%

25%

50%

75%

100%

-

10

20

30

40

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

% o

f Pro

uduc

t Out

put A

nnou

ncem

ents

in E

ach

Inno

vatio

n Ty

pe

No

of P

rodu

ct O

utpu

t Ann

ounc

emen

ts

Financial Year

Product Innovation Marketing Innovation Product Output Announcements

Findings and Conclusions

November, 2012

→ IBM Corp.Cognos, Inc. ←


Suggestion – The Academic PerspectivePractitioner and


of research










acquisitions






Suggestion

Awareness

Evaluation

Reflection

Development


Literature Review: Overview Scope

– Academic research on product innovativeness (primarily) and customer innovativeness

Sample– 10 highly cited review / meta analysis articles– 21 highly cited empirical studies on product

innovativeness from all fields– 6 highly cited conceptual and empirical studies on

customer innovativeness Method

– Watson and Webster’s (2002) concept-centric analysis

November, 2012


Literature Review: Findings Product Innovativeness research has been

conducted for more than 50 years in many fields Inconsistent modelling and operationalization

makes cross-study comparisons difficult Four common ancillary constructs identified

– Newness to market– Newness to firm– Technological newness– Product uniqueness / superiority

Majority of research has been conducted from the firm’s perspective and lacks customer focus

November, 2012


Literature Review: Findings Recent reviews have suggested need to include

customer innovativeness concepts into product innovativeness models

Only 5 empirical studies of related to software Customer innovativeness is based on Rogers’

adoption and diffusion theory (ADT) Most relevant aspect of ADT to product

innovativeness is “characteristics of innovation” Customer’s perception of attributes of innovation

can change perceived level of innovativeness

November, 2012


DevelopmentPractitioner and


of research










acquisitions






Suggestion

Awareness

Evaluation

Reflection

Development


Draft Model: Overview

November, 2012

TechnologyNewness

ProductAdvantage

MarketPositionNewness

ProductInnovativeness

PerceivedProduct

Innovativeness

RelativeAdvantage

of Innovation

Complexityof Innovation

Industry PerspectiveCustomer Perspective

C1

(+)

I2

(+)

C2 (+)

C3 (−)

I1 (+)

I3 (+)


Draft Model: Industry Perspective

November, 2012

TechnologyNewness

ProductAdvantage

MarketPositionNewness


I2

(+)

I1 (+)

I3 (+)

Newness of functionality and technology embodied in the new version of LPS

Newness of market position or customer base of the new version of LPS

The overall, inherent level of newness of the new version of LPS

The degree of superiority the new version of LPS has relative to competitors

To be used by researchers and industry analysts to assess innovativeness of LPS


Draft Model: Customer Perspective

November, 2012


PerceivedProduct

Innovativeness

RelativeAdvantage

of Innovation

Complexityof Innovation

C1

(+)

C2 (+)

C3 (−)

Degree to which customer perceives new version of LPS greater than previous

Level of newness of the new version of LPS perceived by customer

Degree to which customer perceives new version of LPS difficult to implement

The overall, inherent level of newness of the new version of LPS

To be used in conjunction with industry perspective by customer to assess innovativeness of LPS


EvaluationPractitioner and


of research










acquisitions






Suggestion

Awareness

Evaluation

Reflection

Development


Method Selection and Design Due to limitation of minor thesis only evaluation

method selection and design are addressed Used Venable et. al. (2012) selection framework

– Strategy: Ex Ante – Naturalistic– Method: Exploratory Focus Group

Purpose– Obtain feedback on draft model to identify

improvements for future development phase Objectives

– Assess usefulness of draft model relative to evaluation criteria in development phase

November, 2012

Practitioner and academic relevance of the problem, and scope

of research










acquisitions






Suggestion

Awareness

Evaluation

Reflection

Development


ReflectionPractitioner and


of research










acquisitions






Suggestion

Awareness

Evaluation

Reflection

Development


Hevner et al (2004) Guidelines

November, 2012


Question and Comments

November, 2012

Contact Details: Steve Remington ([email protected])This presentation is certified 100% pie chart free.


ReferencesEdwards, K.L. & Gordon, T., J., 1984. Characterisation of Innovation Introduced on the US Market in

1982: Report to the US Small Business Administration, Glastonbury, Conneticut: The Futures Group.

Garcia, R. & Calantone, R.J., 2002. A critical look at technological innovation typology and innovativeness terminology: a literature review. Journal of Product Innovation Management, 19(2), pp.110–132.

Gartner, Inc., 2008a. Gartner Says Worldwide Business Intelligence Platform Market Grew 13 Percent in 2007. Gartner Newsroom. Available at: http://www.gartner.com/it/page.jsp?id=700410

Gartner, Inc., 2008b. Gartner Says Worldwide Business Intelligence Spending to Grow 11 Percent in 2008. Gartner Newsroom. Available at: http://www.gartner.com/it/page.jsp?id=636310

Gartner, Inc., 2009a. Gartner Says Megavendors Are Slowing Business Intelligence Revenue Growth but Increasing Usage by Bundling Applications. Gartner Newsroom. Available at: http://www.gartner.com/it/page.jsp?id=852112

Gartner, Inc., 2009b. Gartner Says Worldwide Business Intelligence, Analytics and Performance Management Grew 22 Percent in 2008. Gartner Newsroom. Available at: http://www.gartner.com/it/page.jsp?id=1017812

Gartner, Inc., 2010a. Gartner EXP Worldwide Survey of Nearly 1,600 CIOs Shows IT Budgets in 2010 to be at 2005 Levels. Gartner Newsroom. Available at: http://www.gartner.com/it/page.jsp?id=1283413

Gartner, Inc., 2010b. Gartner Says Worldwide Business Intelligence, Analytics and Performance Management Software Market Grew 4 Percent in 2009. Gartner Newsroom. Available at: http://www.gartner.com/it/page.jsp?id=1357514

November, 2012

http://www.gartner.com/it/page.jsp?id=700410







ReferencesGartner, Inc., 2011a. Gartner Forecasts Global Business Intelligence Market to Grow 9.7 Percent in

2011. Gartner Newsroom. Available at: http://www.gartner.com/it/page.jsp?id=1553215Gartner, Inc., 2011b. Gartner Says Worldwide Business Intelligence, Analytics and Performance

Management Software Market Surpassed the $10 Billion Mark in 2010. Gartner Newsroom. Available at: http://www.gartner.com/it/page.jsp?id=1642714

Gartner, Inc., 2012a. Gartner Forecasts Australian Business Intelligence Software Revenue to Grow 11.7 Percent in 2012. Gartner Newsroom. Available at: http://www.gartner.com/it/page.jsp?id=1924015

Gartner, Inc., 2012b. Gartner Says Worldwide Business Intelligence, Analytics and Performance Management Software Market Surpassed the $12 Billion Mark in 2011. Gartner Newsroom. Available at: http://www.gartner.com/it/page.jsp?id=1971516

Hevner, A.R. et al., 2004. Design Science in Information Systems Research. MIS Quarterly, 28(1), pp.75 – 105.

IBM Corp. (2007). IBM to Acquire Cognos to Accelerate Information on Demand Business Initiative. HighBeam Research. Online Press Release Archive. Retrieved February 2, 2010, from http://www.highbeam.com/doc/1G1-171133011.html

OECD / Eurostat, 2005. Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data 3rd ed., Paris, France: OECD Publishing. Available at: http://www.oecd.org/document/33/0,3343,en_2649_34273_35595607_1_1_1_37417,00.html

November, 2012





http://www.highbeam.com/doc/1G1-171133011.html


http://www.oecd.org/document/33/0,3343,en_2649_34273_35595607_1_1_1_37417,00.html

http://www.oecd.org/document/33/0,3343,en_2649_34273_35595607_1_1_1_37417,00.html


ReferencesOracle Corporation. (2007). Oracle Buys Enterprise Performance Management Leader Hyperion. Oracle

Press Releases. Press Release. Retrieved April 10, 2010, from http://www.oracle.com/corporate/press/2007_mar/hyperion.html

SAP AG. (2007). SAP to Acquire Business Objects in Friendly Takeover; Combined Companies to Accelerate Leadership for Business User Applications. HighBeam Research. Online Press Release Archive. Retrieved February 2, 2010, from http://www.highbeam.com/doc/1G1-169574461.html

Vaishnavi, V. & Kuechler, W., 2007. Design Science Research Methods and Patterns: Innovating Information and Communication Technology, CRC Press.

Venable, J. (2006). A Framework for Design Science Research Activities. In M. Khosrow-Pour (Ed.), Emerging Trends and Challenges in Information Technology Management (pp. 184–187). Hershey, PA, USA: Idea Group, Inc. Retrieved from http://www.irma-international.org/proceeding-paper/framework-design-science-research-activities/32739/

Venable, J., Pries-Heje, J. & Baskerville, R., 2012. A Comprehensive Framework for Evaluation in Design Science Research. In K. Peffers, M. Rothenberger, & B. Kuechler, eds. Design Science Research in Information Systems. Advances in Theory and Practice. 7th International Conference, DESRIST 2012. Las Vegas, Nevada, USA: Springer Berlin Heidelberg, pp. 423–438. Available at: http://link.springer.com.ezproxy.lib.monash.edu.au/chapter/10.1007/978-3-642-29863-9_31

Xu, L. & Brinkkemper, S., 2007. Concepts of Product Software. European Journal of Information Systems, 16(5), pp.531–541.

Watson, R. & Webster, J., 2002. Analyzing the Past to Prepare for the Future: Writing a Literature Review. Management Information Systems Quarterly, 26(2), p.xiii–xxiii. November, 2012

http://www.oracle.com/corporate/press/2007_mar/hyperion.html



http://www.irma-international.org/proceeding-paper/framework-design-science-research-activities/32739/



http://link.springer.com.ezproxy.lib.monash.edu.au/chapter/10.1007/978-3-642-29863-9_31

http://link.springer.com.ezproxy.lib.monash.edu.au/chapter/10.1007/978-3-642-29863-9_31

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