Many investors do not feel comfortable with technological issues: most scientists have little experience in finance and business management. Many financial advisors do not have a background in technology. The result is poor project risk assessment, high 'hurdle' rates of return on technology ventures and good ideas either not being supported or being poorly developed:
Z/Yen structures technology commercialisation projects to reduce uncertainty and control risk through the development. This has been called a 'staged' or 'staged checkpoints' methodology. The aim of Z/Yen's approach to technology commercialisation is a controlled development process, where uncertainty falls rapidly while costs rise slowly. The benefits of a systematic methodology based on Z/Yen's approach to risk/reward in technology exploitation can include:
We employ a mixture of numeric and qualitative techniques:
Z/Yen staff offer a broad variety of technical business, and academic experience with qualifications in science, law, economics and accountancy who have raised significant financial backing for clients businesses. Recent projects have included technologies varying from IT to biotechnology, from engineering finite element analysis to industrial metallurgy. Z/Yen is working on civil sector applications of Ministry of Defence technology, and in particular has formed a consortium (with BZW, Royal & Sun Alliance, Silicon Graphics, The London Stock Exchange, and the Defence Evaluation and Research Agency) to apply 'virtual reality' to financial modelling and analysis.
Z/Yen has a number of staff who between them have managed, appraised and launched over a hundred technology commercialisation projects, in industries ranging from pharmaceuticals, to petrochemicals, engineering, computing, networks and electronics. There are a number of generic management issues which Z/Yen sees consistently recurring in these projects. Some are 'one-off' issues, addressed at particular times in the 'staged checkpoints' process, but most are ongoing, and should form part of the project manager's checklist at every stage.
Z/Yen staff have also encompassed a number of what might be termed 'learning experiences'. Some of the lessons learned are highly qualitative, but real nonetheless.
Unsuccessful Projects....(real quotes!):
As well as the generic lessons described above, many activities in a technology commercialisation project will be specific to that industry. How can a company or organisation identify these specific activities before launching a new product or service? Z/Yen uses a variety of workshops, brainstorming, and expert panels to identify risk areas. We then assess these risk areas using a systematic qualitative methodology, which generates actions and insights at each phase.
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The risk assessment methodology allows Z/Yen and its clients to generate specific action plans (typically up to 80 points in each phase of the 'staged checkpoints' process), and allows simple statistical analysis to be carried out. Each project can be graphically represented to illustrate areas of weakness in the project (bar extending below base line), and areas of high uncertainty (very long bar). A simple example from a high risk I.T. industry might be:
The risk factor analysis described above generates questions which drive better project forecasting. Instead of running somewhat arbitrary sensitivity analyses, the risk factors can be quantified as probability curves in the project cash flow forecast:
This enables projects to be compared in the context of an overall portfolio of risk:
Z/Yen welcomes opportunities to work with clients in one of the most rewarding fields of all, seeing new technology make a difference.