Management Memo: Staying in the technology sweet spot

I have seen many CIOs lose their jobs because of technological innovations which were ill conceived and ill timed, and which eventually went sour. I have also seen many CIOs who should have lost their jobs for roughly the same reasons. Reasons differ for these ill fated projects: poor project management; lack of stress testing, simulating production volumes; insufficient quality resources assigned from the business; and technology that just wasn’t ready for prime time. How then does a CIO know if an emerging technology will pay off in business benefits or whether it will be a leap into the abyss?

When asked about this, I like to draw on Geoffrey A. Moore’s model described in his book “Crossing the Chasm”. This presents the technology lifecycle, from the developer’s point of view, demonstrating the critical point where a product will either catch on and ultimately be successful in the marketplace or fall into a chasm with many others. From the CIO’s perspective, it demonstrates that the early marketplace is occupied by the technology pioneers (those who will try anything that looks neat) and the early adopters (those that see significant business advantage from the new product). This early market, however, is limited and far from mainstream. At this point, the product has reached the brink of the chasm and will either successfully cross it, at which point it catches on for huge market potential, or will fall into the abyss, eventually disappearing from the radar screen.

As a base line, the developer has to be able to demonstrate to the marketplace that the product is robust and ready for production volumes. Equally as important, however, is the need to demonstrate that the product is the emerging standard in the particular market niche the developer is trying to address. Finally the product cannot stray too far from industry standard interfaces to commercial platforms. From the CIO’s point of view, all of these considerations are key in keeping his organization in the technology “sweet spot”.

As an example on the negative side, the early adopters of Beta video technology lost their investments as the sponsors of VHS protocols (supposedly an inferior technology) convinced the marketplace it was the emerging standard in this niche. On the positive side, RIM managed to maneuver its products into becoming the industry standard in mobile collaborative computing, essentially driving the definition of protocols to support that business. Here the early adopters’ investments paid off as Blackberries successfully crossed the chasm to be embraced by a large number of users.

When to be an early adopter

How does one determine when it might be worthwhile to buck the mainstream and be one of the early adopters of an emerging technology? What are the decision criteria needed to support such a venture? First, the business case supporting the technology must be significant, otherwise the benefits may be swamped by the risks. Next, the technology and its risks have to be evaluated in terms of skills required for product implementation and support and project management experience for the unknowns involved in innovation. There must be business commitment to success, and as well, allowances must be made in project financing for things going wrong. Finally, there is no substitute for a proof of concept or pilot program. Key to this is the simulation of production loads and a serious attempt to make the product fail, followed by rigorous post mortems to see if the product can be resurrected for prime time. If all these risks can be mitigated then there is a good chance for business success from this technological innovation.

For the most part, you want to keep your organization in the technology sweet spot. There are times, however, when you might want to be different – to seize the prize of business advantage through technological innovation in your industry. Do it wisely!

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–Graham J. McFarlane, P.Eng., ISP, FCMC is a consultant who has worked with IT management, both in Canada and internationally, since 1978, focusing on improving IT effectiveness. Prior to this, he spent ten years with IBM Canada.

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