Chapter 7

1. Chapter 7 Managing Emerging Technologies

2. Emerging Technologies • Relative term – different for companies • Life Cycle • Emerging technology – innovation and is still developing; not yet accepted as a technology that will be useful, usable, cost effective or viable substitute • Pacing technology – beginning to grow in acceptance; has benefits that exceed cost or competitive advantage; multiple companies use

3. Life cycle continued • Key technology – provides a competitive differential – drives/enables business and allows company to be more successful than its competitors • Base technology – required for the company in order to remain viable in marketplace

4. Adopting technology • View adopting technology from the implementer’s point of view – categories are: • Innovators – willing to take higher risk, “deeper pockets”, or experience in evaluating/ piloting projects; be careful of embracing technology “for technology’s sake” – during emerging phase • Early adopters – more visionary, some assurance for potential returns, but not widespread – emerging or pacing phases

5. Categories continued • Early majority – wait until more assurance for success – other competitors are already using this – only pacing phase • Late majority – have to adopt to stay competitive, conservative who prefer low risk or low investment capability – key status • Laggards – true skeptics, already base technology and have to adopt to stay in the market – implementation might be greater than benefit

6. Moore’s catagories • Geoffrey Moore calls these 5: • Technology enthusiasts • Visionaries • Pragmatists • Conservatives • Skeptics

7. Other similar models • Geoffrey Moore – supplier’s model • Early market – great excitement where customers are enthusiasts and visionaries • The Chasm – early market interest isn’t showing needed benefits • Bowling Alley – niche-based adoption in advance of general marketplace – vendors will create niche-specific whole products

8. Supplier’s model continued • The Tornado – mass-market adoption where general marketplace switches over to the new • Main Street – aftermarket development • End of life – can come all too soon driving price/performance to new levels where wholly new paradigms come to market and supplant the leaders who themselves had only just arrives

9. Competitive advantage • If don’t keep pace with technology • 58% say loss of competitive edge • 16% say increased cost of production • 13% say would not be in business • 7% say would have lack of control in running the business • 3% say other reasons • 3% say would not happen to them

10. Strategies for Technology Development Innovator Early Late Maj Laggards Emphasis on R&D dev sys design production Couplings R&D/systems R&D/end systems/users prod/users users Technical state of art high moderate low Features R&D risk comp/intel minimize cost quick copy responsive delivery Style enthu/vis pragmatic conservative skeptics

11. The S-Curve • Normal distribution for adoption of technologies • S-curve describes cumulative adoption • Technologies overlap – sunsetting • Few adoptions • Take-off point • Majority have accepted

12. Managing S-Curve Change • Initial phase – IT/business needs to build awareness of emerging technology – select experts for the new technology • Early & late majority – more people need to be skilled in technology; affects more people; users & supporters need to be “invited” to embrace the new technology

13. Managing S-curve continued • Base technology – must adopt the technology, change becomes requirement; shift from persuasion & encouragement to more direct adoption methods • Need to look at incremental and discontinuous change • Discontinuous change needs to come from the CEO or high level management

14. Discontinuous • Paradigm shock – effect experienced by end users or the infrastructure supporting them – greater impact on stakeholders relative to newness the greater the paradigm shock - inhibitor • Application breakthrough – result of dramatic changes in roles of end user technologies – significant returns from investment – driver of adoption of new technologies

15. Learning along the S-Curve • Early phase – people knowledgeable small • Growth phases – more and more people need to know technology • Obsolescence phase – decline in people knowledge as people more on to new technology (risk that pool of available knowledge will decline faster than technology’s use – contributes to rise of cost)

16. Strategy and the S-Curve • Innovators & early adopters – play a greater role in shaping the subsequent use of technology – also organizations who help shape the future will be great influence in driving marketplace • Early majority – respond to environment; flexible to adapt to circumstances, yet avoid risks for adopting too soon

17. Strategy continued • Late majority & laggards – maintain strategic posture where investments made as late as possible – avoid risk; but possible risk is getting into the game too late

18. Roger’s Innovation Diffusion • Diffusion – process by which an innovation is communicated, over time, through certain channels to members of a social system • 5 characteristics of rate of adoption • Relative advantage – degree to which technology appears to be better over current one • Compatibility – values & needs of adopters • Complexity – hard to use or learn – slow adoption

19. Diffusion continued • Trialability – technology that can be experimented with better change of adoption • Observability – technology can be “seen” by other users will affect rate of adoption • This method doesn’t take into account management, nor organizational influences, knowledge issues and interdependencies

20. Fichman & Kemerer • Economics of Technology standards • 3 primary sources of increasing returns to adoption • Learning by using – increase in benefits to users • Positive network externalities – benefits brought on by numbers of users • Interrelatedness – compatible products makes for a larger base of adopters

21. Knowledge barrier • Organizations who become early adopters have several characteristics: • An ability to amortize the cost of learning • An ability to acquire any given amount of new knowledge with less effort • A higher level of initial knowledge about a given technology

22. Acquisition • Acquisition of a technology does not necessarily equate to implementation • Lag between acquisition of aproduct and its actual implementation is the assimilation gap

23. Identification of Emerging Technologies • What Can Happen? - comes from R&D, inventors, or convergence of existing technologies – companies need to stay current with vendors and what is “happening” • What Will Happen? – economics must be looked at to see if technology is viable and producable

24. Emergence continued • What Should Happen? – after looking at science, engineering and economics, also look at social, political and ethical issues (cloning); also even if technology effective – might not become standard (Betamax) • How Will It Happen? – implementation & evaluating of emerging technologies • **Need to identify the application

25. Inhibitors to Embracing Technologies • Delayed participation – managers have mental model of business – need to have longer-term outlook on potential of emerging technologies • Sticking with familiar – technology similar with past successes – favored bias • Reluctance to fully commit – half-hearted based on competing forces in company

26. Inhibitors continued • Lack of persistence – unwillingness of organization to endure trials of implementing technologies that have high risk • The Establishment – industry outsiders have little to lose in pursuing radical innovations – most companies have infrastructure and large investments – little incentive for radical change

27. Factors that Slow Adoption • The offering does not provide substantial performance advantages over current solutions • Target customers are currently quite satisfied with current solutions • Those customers who will benefit most from the offering do not control the purchasing decision

28. Factors continued • The final offering needs to undergo a significant regulatory approval process • The customer’s perception of value will be dependent on the backing of other parties • The sale of the product will depend on the efforts and resources of other parties, such as distributors

29. Factors continued • Adoption of the offering will require users, customers, or distributors to change expensive embedded systems • Target markets will have to be educated in how to use the offering • Target markets will have to radically change their usage patterns • The technical standards in this industry are not yet clearly set

30. Factors continued • The purchasing decision will be risky for target customers • Significant sales are unlikely until a critical mass of products is in use • Infrastructure or technology must be developed in parallel to get the offering to the market

31. Human Resource Considerations • Availability of talent • Resource allocation • Motivation • Knowledge management

32. Technology Scanning • Books & periodicals • Formal studies (interviews, surveys, scenario planning, on-site observations) • Personal contacts/networking • Professional organizations, workshops, conventions • R&D organizations

33. Scanning continued • State & federal departments • Universities • Vendors and consultants • Early adopters • **in addition – technology forecasting for general future trends should be done

34. Factors Affecting Successful Introduction of Technologies • Identify the problem and opportunity that technology addresses – business linkage and value – need a sponsor for implementation • Identify and empower a champion • Create a cross-functional, dedicated and accountable team • Build an environment that will support the technology

35. Successful introduction continued • Identify and address the risks associated with the new technology • Manage the project – set reasonable goals and schedules; develop standards for abandoning the project

36. Technology Assessment Process • Scoping – capabilities of firm and potential threat or opportunity from the technology • Searching – screen technologies and search for signs of emerging technologies and determine if they have commercial viability • Evaluating – identifying and prioritizing technologies that are considered viable

37. Process continued • Committing – considers how it should be pursued and implemented – technologies that reach this stage are considered viable with the potential to provide some level of advantage

38. Managing Checklists • How to sell new technologies to executives • Focus on business solution to a problem • Identify value to the organization • Compare new technology to existing ones • Consider a range of alternative to be evaluated • Create champions throughout company • Manage expectations – clear milestones • Start small to mitigate risk

39. Checklists continued • Look to other industries with similar models • When you are on the “bleeding edge” be sure you understand iterative/evolutionary nature of new technologies • Under-promise • Be honest when things go awry

40. Checklists continued • How to prioritize and focus on right technology • Prototype, demo and show users technologies • Become intimate with business drivers • Understand business requirements • Highlight benefits of technology • Weigh the risks • Identify technologies that enable new business

41. Checklists continued • Identify technologies that can be easily integrated with existing architectures • Measure the risks in the context of organization’s ability to absorb failure/success • Understand culture and fit with technology • Set aside money for changing priorities throughout the year

42. Checklists continued • Developing the business case for emerging technologies • Identify the business need • Identify how it fits into the current business priorities • If replacing – identify areas that will be impacted • Identify benefits to and impact on bottom line • Identify cost of not pursuing technology

43. Checklists continued • Identify the assumptions and justify them • Utilize proof of concepts/prototypes • Work with a business function collaborator • Evaluate implementation options • Evaluate fit with existing architectures • Ask for feedback from customers • Identify a project champion

44. Lessons from the Past • Lessons from the past • “expert” predictions are fallible • Timing is relevant – iterate and review often • Which new technologies become adopted is hard to predict • Organizational consequences of adopted new technologies take a long time to become evident

45. Rules & Laws of Technology • Bigger computers are better – computing power increases with the square of its cost • Smaller computers are better – transistor density on a manufactured semiconductor doubles about every 18 months • Connected computers are better – value of a network grows as the square of the number of its users

46. Rules continued • Machines may leap, but programs creep – software gets slower faster than hardware gets faster • Networks will triple every year – for the foreseeable future, the total bandwidth of communications systems will triple every 12 months