© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 1 Chapter 7 Managing Emerging Technologies Managing the Information Technology Resource Jerry N. Luftman

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 2 Chapter Outline Importance of understanding emerging technologies Should organization be pioneer, leader, or follower Best time to adopt new technology How to introduce and appropriate apply new technology

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 3 Technology Life Cycle Emerging Technology –Technology considered innovation –Still developing in capability/capacity Pacing Technology –Technology is growing in acceptance Key Technology –Provides competitive differential Base Technology –Final phase of life cycle –Required technology

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 4

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 5 Adoption of Technology Innovators (Technology enthusiasts) –Willing to take higher risks Early Adopters (Visionaries) –More visionary Early Majority (Pragmatists) –Wait for more assurance for success of technology Late Majority (Conservatives) –Must adopt technology to stay current Laggards (Skeptics) –True skeptics; must adopt to stay in the market

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 6

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 7 Moore’s Product Provider View of Technology Innovation Early Market –Look to be first with new paradigm Chasm –Early market interest wanes Bowling Alley –Niche-based adoption in advance of general marketplace Tornado –Mass-market adoption Main Street –Aftermarket development –Flesh out potential End of Life –Ignored and presumed in original model –Enable new paradigms to come to market

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 8

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 9

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 10 Strategies for Technology Development

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 11 Diffusion Curve

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 12 Managing Change

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 13 Learning S-Curve

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 14 Three Strategic Postures Shape the future –Play leadership role in establishing how industry operates Adopt to the future –Recognizing and capturing opportunities in existing markets Reserve right to play –Invest sufficiently to stay in the game –Avoid premature commitments

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 15 Innovations Influence on Rate of Adoption Relative Advantage –Considers degree innovation is perceived to be better Compatibility –Higher level of compatibility with values and needs Complexity –If difficult to learn, use, or implement will slow rate Trialability –If easily experimental, will have better adoption chance Observability –Degree to which innovation can be seen

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 16 Increasing Returns of Adoption Learning by using –Increase in benefits technology brings as adopters gain experience and knowledge Positive network externalities –Greater the number of users, greater the benefit Technological interrelatedness –Existence of compatible products that will increase larger base of adopters

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 17 Characteristics of Early Adopters Ability to amortize costs of learning Ability to acquire any given amount of new knowledge with less effort Higher level of initial knowledge about given technology

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 18 Assimilation Gap Source: Fichman, Robert G., Kemerer, Chris F. The Illusory Diffusion of Innovation: An Examination of Assimilation Gaps, Information Systems Research, Vol. 10, No. 3, September 1999.

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 19 Identifying Emerging Technologies What Can Happen? –Keep abreast of technologies being developed What Will Happen? –Engineering hurdles may exist What Should Happen? –Consideration of social, political, and ethical issues How Will It Happen? –R&D may envision product differently than actual application of it

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 20 Inhibitors to Emerging Technology Delayed participation Sticking with the familiar Reluctance to fully commit Lack of persistence

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 21 Human Resource Considerations Availability of Talent –Best personnel to evaluate technology Resource Allocation –Dedicated resources for evaluation and implementation Motivation –Project failure/success is a possibility Knowledge Management –Sharing of lessons learned –Utilize outside consultants –Protect new knowledge for competitive advantage

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 22 Technology Scanning Keeping abreast of developments in technology –Books and Periodicals –Formal Studies –Personal Contacts –Professional Organizations/Workshops/Conventions –R & D Organizations –State and Federal Departments –Universities –Vendors and Consultants –Early Adopters

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 23 Factors for Successful Introduction 1.Identify problem and opportunity that technology addresses 2.Identify and empower a champion 3.Create cross-functional, dedicated, accountable team 4.Build supportive environment for introduction of technology 5.Identify and address associated risks 6.Manage the project

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 24 Technology Assessment Process 1.Scoping Establish scope/domain of technology search 2.Searching Screen technologies Search for signs/viability of emerging technology 3.Evaluating Identify/prioritize technologies Evaluate based on abilities, needs, competitive opportunities 4.Committing How it should be pursued and implemented

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 25

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 26 Selling Technology to Senior Executives Sell business solution Identify value to organization Compare new to existing technologies Consider range of alternatives Create champions throughout organization Manage expectations Start small to mitigate risks Look to other industries for changes Understand iterative/evolutionary nature Underpromise Be honest

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 27 Prioritize and Focus Prototype, demo, and show users Be intimate with business drivers Understand business requirements Highlight benefits Weigh risks Identify those that enable new business

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 28 Prioritize and Focus Identify those that are easily integrated Measure risks and ability to absorb failure/success Understand organizational culture Set aside money for changes

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 29 Developing the Business Case Identify business need How does it fit in current priorities Identify areas to be impacted Benefits to/impact on bottom line Competitive landscape Identify assumptions and justify

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 30 Developing the Business Case Utilize proof of concepts/prototype Add validity to proof of concept Evaluate implementation options Evaluate fit Feedback Identify project champion

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 31 When to Deploy Emerging Technologies Look at industry trends Benchmark Evaluate when risk of not doing it is greater than doing it Pilot technology to validate proof of concept/direction Utilize outside consultants to evaluate

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 32 Lessons from the Past Expert predictions are fallible Timing is relevant Iterate and review frequently Which new technologies become adopted is hard to predict Consequences of adoptions take long time to become evident

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 33 Laws of Technology Bigger Computers Are Better –Grosch’s Law Smaller Computers Are Better –Moore Connected Computers Are Better –Metcalfe Machines May Leap, but Programs Creep –Wirth Networks Will Triple Every Year –Gilder