Assessment of technological capability on IT firms

The importance of technological capability enhancement in today's highly competitive and demanding business environment is well accepted. This paper proposes a methodology to assess the elements of acquisitive, operative, adaptive, innovative, supportive and marketing capabilities, all of which together constitute the technological capability of a firm. The proposed methodology comprises five steps: identification of value addition stages performed by a firm; determination of technological capabilities needed at these stages; development of indicators for assessing the identified technological capabilities; benchmarking the capabilities assessed with a state-of-the-art firm; and analysis of the reasons for the technological capability gap between the firm being studied and the state-of-art firm. Based on the former study in this field and considering the particulars of Chinese companies, this paper brings about a new theoretic model for technological capability assessment. The development of the indicators is illustrated using a firm from the information technology (IT) sector. Some suggestions are then made as to how the assessment exercise can be used for technological capability enhancement planning. Through the /spl beta/ test on the empirical study of three IT firms, the paper validates the function, usability and usefulness of the tool. Special attention is paid to the relationship between technological innovation and equipotential development, external and internal factors that can influence technological capability enhancement.