1. IS3320 Developing and Using Management Information Systems Lecture 11: Introducing Innovations in MIS Design Rob Gleasure R.Gleasure@ucc.ie www.robgleasure.com

2. IS3320 Today’s lecture  The technology adoption lifecycle  Crossing the chasm

3. The Technology Adoption Lifecycle In 1963 Everett Rogers divided consumers of new grain types into five groups according to their risk aversion 1. Innovators  Highly risk-tolerant, hence the first to adopt new innovations  Tend to be young and from wealthy backgrounds  Often very social and usually maintain close relationships with sources of invention 2. Early Adopters  Adopt innovations as soon as they are convinced they will eventually be useful  Tend to be young, educated and well thought of amongst others

4. The Technology Adoption Lifecycle 3. Early Majority  Adopt innovation once convinced it is immediately useful  Some limited contact with Early Adopters  Tend to be reasonably well thought of, although not influential 4. Late Majority  Only adopt an innovation once it has become the norm  Not usually wealthy or at all socially influential  Very little contact with Innovators 5. Laggards  Will only adopt innovations once they have to  Tend to be older and possess opinions perceived to be of limited value  Little contact with any other group

5. The Technology Adoption Lifecycle The product life cycle The distribution of consumers

6. Adopting Technological Innovations Geoffrey Moore brought these ideas forward for innovations in high- tech Industries  Innovators: Technology Enthusiasts  Early Adopters: Visionaries  Early Majority: Pragmatists  Late Majority: Conservatives  Laggards: Sceptics

7. Adopting Technological Innovations Technology Enthusiasts  Gadget-loving ‘techies’  Don’t have a lot of money themselves, but what they do have is a lot of weight of opinion as regards future infrastructure investments in organizations  Techies are the first people targeted to open up new markets Visionaries  Seeking the benefits, not the technology necessarily, i.e. no ‘gadgets for gadgets sake’  Love the idea of a ‘shake up’  Tend to have the money/access to money to make things happen  Take stock of recommendations made by techies

8. Adopting Technological Innovations Pragmatists:  No real interest in technology, just want to ‘keep up’  Look for results-based proof of the effectiveness of technologies, hence will usually buy from most established sellers  Often manage business functions in which failure is devastating Conservatives  Will only buy when the price has fallen enough to make investment almost impossible to backfire  Looking for simple systems that work Sceptics  Hyper critical non-consumers in the current market conditions

9. The ‘Chasm’ Techies and visionaries tend to be in frequent contact  Recommendations between them are reasonably effective Pragmatists need references more than anyone to become convinced but don’t really value the opinions of techies and visionaries

10. Introducing New Innovations

11. The Early Market Techies are generally won over by new technological capabilities  The more a concept is differentiated, the more exciting it becomes  They enjoy figuring the new tech out, hence transparency and support are key Visionaries are generally won over by new business capabilities  The potential implications of the concept are what excites this group  Visionaries like to feel like they have an ability to shape the coming industry For both groups, being insiders/on the cutting edge is important

12. Crossing the Chasm So how do we get the pragmatists to start consuming our innovation?  They won’t buy from you until you are established, yet you can’t get established until one of them buys from you Pragmatists want a complete, reliable solution to a problem  Most cutting-edge companies are not set up to make this happen

13. Crossing the Chasm Moore argues that to ‘cross the chasm’, companies must go to the ‘bowling alley’  Instead of trying to move the whole herd at once, try to move smaller herds Identify a vertical (niche) market where a broken ‘mission-critical’ business process is a serious concern to management Get the product to this customer segment as quickly as possible, rapidly ironing out any problems that emerge so that a whole solution is provided, not just the technological innovation

14. Crossing the Chasm Dominate that niche! Become the obvious number 1 and saturate that community until the problem is completely solved Once this community is satisfied, use them as a reference to expand into neighbouring or related pragmatic markets

15. Crossing the Chasm After the bowling alley comes the ‘tornado’, when the mass-market become the target  This is where growth explodes and competition expands This is still driven by pragmatists but now they are no longer pragmatists with whom you are closely tied Here it is about simplifying the product and lowering costs to allow you to compete on price

16. The Lifecycle Post-Chasm Image from http://www.chasminstitute.comhttp://www.chasminstitute.com

17. Exercise You have decided to go ahead with the idea for a Blackboard competitor What strategy could you apply to get it up and running? Whom could you consider as partners in this strategy? What problem of theirs could you solve?

18. Want to read more? Everett, R.M. 2003. Diffusion of innovations (5 th ed), Free Press, NY. Moore, G. 2002. Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers (Revised ed), HarperBusiness, NY.