Engineering management has many connotations, and they have been evolving. Let’s have an acceptable definition, to begin with. Engineering management in the innovation era involves the ability to i. interpret the past and present technology innovation dynamics and ii. predict the unfolding future, iii. set achievable goals, and iv. efficiently allocate resources to attain them. It primarily focuses on creating economic value out of engineering knowledge and ideas in the competitive market economy. More specifically, it entails managing the journey of producing and profitably trading technology ideas in the competitive market. Major challenges involve dealing with uncertainties over a prolonged period. Some of the common causes of uncertainties are technology, consumer preferences, competition response, and public policies. Hence, in the Innovation era, Engineering Management necessitates rational decision-making amid uncertainties in taking ideas to market.
However, the role of engineering management depends on the nature of jobs. Not all engineers are involved in managing the journey of taking ideas to market. Furthermore, relative opportunities are also shifting. Therefore, it’s worth taking a look at the evolving nature of engineering jobs.
Evolving nature of engineering jobs and management challenges
There appear to be three main types of roles of engineers in society. The first one is the in-house employees. For being in-house employees, the main challenge is to know technology and design techniques. Subsequently, to apply them economically to design and deliver technology solutions to practical problems. They are also required to select technology solutions and manage the acquisition process. Furthermore, they need to install and supervise the operation of large technology systems. In such a capacity, engineering management primarily involves projects, acquisition, and operation management. For example, in the USA, NASA has many in-house engineers to support the development, deployment, and operation of space missions. Similarly, engineers in state-owned or large private corporations in developing countries are involved in managing the acquisition, custom development, and operation of technology solutions.
The second form of the role for Engineers is in the form of a contractor. The management challenge in this role involves technology selection, scope management, making estimation and planning, proposal development, and negotiation in winning contracts. Upon winning contracts, the management challenges involve managing resources and effectively deploying them in delivering project outputs within budgets.
However, both of these two employment opportunities for engineers have been losing attractiveness. Managing the journey of taking innovative ideas to a competitive market is the third form of the role of engineering management. One of the main challenges has been managing resources in spotting the scope of profitably serving purposes with technology ideas, developing ideas, and taking them to market to generate profitable revenue. For example, Apple has been managing features of the iPhone and other products to profit from technology ideas in a competitive market. What features to be added or improved, and how technology should be managed to support them to win competition space are among significant challenges of engineering management in the innovation era. Hence, there has been a growing role of management to create economic value from technology.
Rational decision-making challenge in taking ideas to market
Rational decision-making begins with recognizing the problem, setting objectives and decision criteria, collecting data, comparing feasible alternatives, and selecting the best one. Major management challenges include predicting unfolding demand, forecasting competitive offerings, estimating investment, apprising selling price and manufacturing cost, and predicting product life cycle. Expected profitability, the timing of cash flow, and the impact on firms’ market value or stock price are among many uncertainties to encounter in managing a journey in taking ideas to market. Apart from them, technology poses risks.
Technology uncertainty poses a challenge to engineering management in the innovation era
Technology itself poses risks. How far technology will be amenable to growth is a major issue. Often technology ideas need to grow as a wave of creative destruction. Irrespective of the greatness of the idea and strength of the underlying technology core, such creative waves begin the journey in primitive form. The amenability of the advancement of the underlying technology core determines how fast and at what cost those waves will grow in creating profitable exploitation opportunities. For example, the electric vehicle is a great idea. But uncertainty in technology growth poses management risks. Although the fuel cell showed potential in the 1990s, lately, the electric battery has taken over that potential. Still, there is a risk of whether a battery-powered EV will take over a gasoline-powered one. Hence, technology management is a core topic of contemporary engineering management
Engineering management for predicting and responding to customer preferences
Customer preference is another area of uncertainty. How will the customer respond to different features of a product is always an innovation management challenge. Starting from ethnography to different design philosophies offer some hints. Hence, management should consider them to assess the implications of various design decisions on customer preferences. It should be done as early as possible to reduce R&D investment risks. For example, upon investing over $500 over 32 years in Humanoid Robot ASIMO, Honda figured out that elderly people did not like ASIMO type, robot caregivers. In fact, until and unless that product is made available, it’s often quite impossible to know how to target customers to respond to a conceived product.
Hence, conventional survey-based market research does not offer much help. To address this critical issue in deciding about features of personal digital assistant (PDA), Jeffrey Hawkins tested design ideas with the wooden and paper replica of PalmPilot using a chopstick for a stylus. Hence, predicting and responding to customer preferences is a significant challenge of engineering management in innovation eras.
Managing competition responses to profit from technology ideas
The willingness to pay to an innovative technology product not only depends on the feature and performances of the product. Most importantly, it depends on the competitive offerings. Moreover, it’s a function of time. Irrespective of the greatness of the idea, the strength of the technology, and the legal barrier, coopetition response will emerge in replication, imitation, innovation, and substitution forms. The engineering management challenge is to predict them, prepare with adequate technology and R&D portfolio, and respond with successive better versions, preferably at a lower cost. Even it may require changing the technology core. Hence, managing technology is a core part of engineering management.
Particularly, it has been highly challenging to respond to the uprising of substitution waves. Invariably they emerge in faint form. But some of them grow as creative wave destruction. Failing to switch at the appropriate time leads to disruptive effects on high-performing incumbent firms. For example, digital equipment corporations, Kodak, RCA, and many others failed to detect uprising of the disruptive technology-powered creative destruction at the early stage. Consequentially, these high-performing technology firms suffered from disruptive innovations. Due to the unique effect of technology potential, often hidden at an early stage, managers without a technology background suffer from decision dilemmas. Hence, there is a vital need for engineering management in the innovation era.
Furthermore, innovation management also involves ways to benefit from the externality effect. Having appropriate design options to stimulate the growth of the 3rd party component plugins is a significant management challenge. Besides, creating suitable standards and influencing public policies for the deployment of needed infrastructure are also core engineering management issues. What features to be created in the ecosystem and product space to benefit from the network externality effect also challenge management decision making.
Public policy and regulation
Adapting, coping up with, or tuning public policies to ease the difficulty of creating economic value from technology ideas is also part of the broader engineering management subject. Most industries having a growing role in technology are showing a natural tendency of monopoly. Notably, due to the increasing role of software and connectivity. On the one hand, the software has zero cost of copying. On the other hand, connectivity creates a network externality effect. The growing natural tendency on monopoly has been creating pressure on managing innovation to profit from ideas. On top of it, governments are formulating policies and regulations to reign it, often by throttling innovation. Engineering management in the innovation era should deal with both of these issues being created by the technology effect.
Engineering management is no longer limited to managing projects and delivery teams. As opposed to in-house employment and working as contractors, engineering graduates are increasingly looking for opportunities to profit from ideas in a competitive market. Their challenge has been to manage the journey of generating and trading innovative ideas as products and process features. Hence, in the innovation era, engineering management has been vital for creating economic value out of science and technology in the competitive market.