The methods of evaluating innovation projects rely on both qualitative and quantitative techniques. Essentially, quantitative methods are concerned with the mathematical and statistical relationships in a given data set while qualitative methods deal with the less distinguished patterns or behavior. In this paper, the technological innovation that is Windows 10 from Microsoft will be evaluated in the context of these methods.
Quantitative methods evaluate the future prospects or returns from a particular innovation project thus providing decision makers with a basis to determine the feasibility thereof (Schilling, 2013). The suitability of any one of these methods depends on the peculiar nature of individual innovations and organizations. To determine future value of projects at present, discounting methods are applied which include working out the Net Present Value (NPV) and/or the Internal Rate of Return (IRR).
In developing and marketing Windows 10, Microsoft would need to establish the expected future benefits in order to justify expenditure for implementation. Applying quantitative methods would require the establishment of future cash flows through the aid of prescribed mathematical formula. Due to the many upgrades and features of the new operating system, it is estimated to capture a big segment of the market for some time. It is possible to ascertain the financial returns from the sales of the product in the future through appropriate projections.
The Internal Rate of Return method calculates the interest percentage that will accumulate on an annual basis from the expected cash flows into the specified payback period. The payback period refers to the time taken for the innovation to break even, meaning time required to offset the expenditure for items such as Research and Development or building up infrastructure. A suitable project is one that adheres to the desired payback period as well as generates projected cash flows for its sustenance in the market. High Net Present values and also Internal Rate of Return are favorable indicators of the suitability of a project.
Contrastingly, the qualitative methods for evaluating innovations, do not rely upon statistical methodologies but rather they address the wider scope of implementation which may yield auxiliary benefits. These benefits might not necessarily be financial rewards especially in the short term because they could be planned to impact the market in a certain manner. For Windows 10, qualitative methods would be more appropriately applied because for instance, Microsoft is offering the software for free to those with recent versions such as Windows 7 and Windows 8.1 (Fenlon, 2015). It implies that the importance of the financial considerations are not the most important for the company especially due to the strategic positioning they have envisioned for the future.
As a market leader in operating systems, Microsoft has strategically introduced Windows 10 so as to enable the launch of smartphone applications as well as other integrated communication such as messaging hubs for Skype and IM services (Soffar, 2015). Windows 10 provides the users with a new generation design, ease of access to social networks including Facebook and twitter as well as incorporating an eye catching interface for the customers. It is an upgrade that anticipates future products and applications in the technology industry therefore it more of a strategic choice than it is an immediate profit/revenue stream.
Additionally, Microsoft’s decision to introduce the upgrade is informed by the necessity of integrating new technologies in the market. For instance, Windows 10 allow for introduction of 3D imaging and other holographic projections which can be applied for remotely interacting with workers or playing 3D games.
An appropriate qualitative method recommended to evaluate Windows 10 is screening which is a method of developing resource application questions. It can be used to qualitatively evaluate the benefits to users such as increased efficiency or speeds in executing tasks. Unstructured interviews can also be utilized to determine feedback from the market as well as analyze the needs of customers on a first hand basis
A good decision for implementing intended innovation projects should be based on a combination of these methods. Both quantitative and qualitative techniques are critical to decision making because while financial implications are best illuminated by the first, the latter better provides a basis for evaluating the overall impact of the innovation.
In conclusion, evaluating innovation projects requires the application of both qualitative and quantitative techniques. Quantitative methods are best applied to ascertaining the financial returns from a project through the use of discounting methods such as working out internal rate of return or net present value. For Microsoft, Windows 10 is better evaluated qualitatively because it is a strategic innovation meant to anticipate future upgrades and applications as discussed.
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- Fenlon, W. (2015). Microsoft: Windows 10 will not be sold as a subscription. Retrieved from<://www.pcgamer.com/microsoft-windows-10-will-not-be-sold-as-a-subscription/>
- Schilling, M. (2013). Strategic Management of Technological Innovation (4th Ed.). McGraw-Hill. Retrieved from <http://mbsdirect.vitalsource.com/#/books/00 77499204/pages/0 UNICEF>
- Soffar, H. (2015).Windows advantages and disadvantages 10. Retrieved from<http://www.online-sciences.com/technology/windows-10-advantages-and-disadvantages/>