There’s no shortage of promising new technologies. The challenge lies in pinpointing the specific tools that have the potential to bring real value to your organization by lowering costs, improving efficiency, providing deeper insights or opening the door to new business opportunities.
There was a time when enterprises could allow competitors to play the role of tech trailblazers, assuming the risks, costs and bumps and bruises that test the resolve of early adopters, says Woody Driggs, digital transformation wavespace leader at IT consulting firm EY Americas Advisory. The tide has now turned, however. “With the increasing pace of innovation and disruption we’re seeing today, it may just be that a fast-follower business and technology strategy will soon be a thing of the past,” he observes.
These days, it’s increasingly vital to adopt emerging technologies to build and maintain competitive advantage — but only after carefully gauging a potential acquisition’s risk and value. Here are seven ways to ensure any emerging tech you deploy will live up to its promised benefits.
1. Pinpoint the business value
Technology projects should be focused on delivering clear business value, Driggs says. “This is even more important today, given the pace at which new technologies are being introduced and the speed they are being adopted,” he notes. “Making a decision to proceed with a new technology is all about its ability to help you achieve the business outcome you are looking for.”
David Linthicum, chief cloud strategy officer at professional services firm Deloitte, stresses the need to identify potential cost savings. “This not only means hard savings, such as costs that may be reduced, but also the harder to define soft costs, such as the value of agility and compressing time-to-market,” he explains.
Determining value also requires identifying the business problem the technology can solve, then determining the benefits received by solving the problem. “This type of ROI analysis should be done around any technology acquisition, no matter how much it’s being hyped,” Linthicum advises.
It’s also important to be realistic and skeptical when estimating a technology’s possible business value. New technologies are frequently viewed as a panacea, says Rich Temple, vice president and CIO of the Deborah Heart and Lung Center. “Realize that when a technology is new, it often hasn’t had the opportunity to mature to the point where it can effectively address most or all of the subtle workflow issues that exist,” he explains. “Let the business drivers propel the evaluation of the technology; don’t let the technology purveyors drive the evaluation.”
2. Seek advice and support
Every IT and business area that will be affected by the new technology’s deployment should be given the opportunity to participate in the evaluation process, advises Michael Gabriel, a partner in the East Coast division of technology advisory firm Fortium Partners. “By understanding who is impacted and who is required you can partner with individuals whose support and/or sponsorship will be necessary for success,” he observes.
Seeking external views and opinions, whenever available, is also a good idea, suggests James McGlennon, CIO of Liberty Mutual Insurance. “You can’t always get the information needed on the cost side, but you can often get insights into where people have been successful in deploying the product or service and what the key opportunities were,” he explains. “We try to ask questions around time-to-value — how long until the product is providing additional capability for the business or reaching cost savings targets.”
Emerging technology insights provided by IT research analysts, publications and industry groups can be particularly useful and frequently free. “We live in a world where information is easy to come by, and lacking understanding around any technology will lead to costly mistakes,” Linthicum notes.
3. Plan logically and precisely
When planning, define the final goal and build a roadmap that will lead you there. “You can’t have moving targets,” warns Rolf von Roessing, board vice chair at ISACA, an international IT governance association, and CEO of Forfa Consulting, a Swiss firm that provides security and privacy guidance.
Begin planning by establishing a future-back agenda, Driggs advises. “Start with the future and work backward to define the new core and growth path.” Consider the challenges and opportunities the organization will likely face in the years to come. Once an array of future scenarios has been identified and documented, planners can begin incubating ideas to prove various hypotheses and [estimate] their proper timing. “Emerging technologies will play a critical role in each of those scenarios,” he says.
4. Test and trial
Any promising new technology should be evaluated iteratively before a final go/no-go decision is reached. “Start small with a pilot and fail fast,” says Michael Zeller, secretary and treasurer of SIGKDD, the Association for Computing Machinery’s special interest group on knowledge discovery and data mining. Test runs allow a new technology’s business value to be assessed with each iteration.
Assuming the ROI for looks good, the best way to evaluate a new technology is to pilot it in a near-production or actual production environment, says Jennifer Felch, CDO and CIO of Dell Technologies. “We can look at business plans and see demonstrations, but until you run a real pilot or proof of concept in your own environment with your own data at the scale of your business, you won’t know for sure,” she notes. Felch recommends piloting the most valuable use case and then adding functions to it until enough confidence and commitment is acquired to launch a full-scale rollout.
“We’ve found this approach to be very valuable for both time-to-value and setting the right expectations,” she explains. “When we can, we’ll run a pilot alongside our current solution so we can clearly demonstrate the true difference in value.”
Organizations should also lean on vendors or solution providers for support, suggests Mike Koleno, chief architect at digital business platform builder AHEAD. “At AHEAD, we built state-of-the-art labs where clients can explore emerging technologies alongside our certified engineers and architects,” he says. “This enables enterprise clients to see emerging technologies in action, gain hands-on experience, test within a safe environment and develop proof of concepts.”
5. Examine the key metrics
Sophisticated and widely used financial metrics, such as internal rate of return and net present value are often useless when evaluating a technology that has yet to establish a significant adoption track record, von Roessing observes. “There’s a good deal of guessing and gut feeling involved [when assessing an emerging technology], and at the end of the day the decision will have to be supported by one or more visionaries who are risk takers — and subsequently, reward takers,” he notes.
McGlennon says he examines several key areas, including licensing costs, total cost of ownership (TCO), support requirements, response times and a technology’s ability to be flexible and modifiable without requiring major code changes. “In our infrastructure organization, we’re really looking how the technologies can support software enablement and DevOps,” he explains.
Sajid Sadi, vice president of research at Samsung and leader of the Samsung Think Tank Team, says he pays close attention to the technology’s market occupancy footprint and strategic reach. The market occupancy footprint, he notes, is similar to total addressable market (TAM), but also considers what other markets may become available as a result of deploying the technology.
“There are things that are short-term wins, and others that are small in themselves but open up huge areas by creating internal competency,” he explains. Strategic reach, Sadi says, is a metric that indicates how long a particular technology investment will pay off over time. “Things that pay off for a longer time, because continued improvement is possible, have better reach,” he observes.
6. Assess compatibility and interoperability
In all likelihood, a new technology will have to interoperate with existing technologies. Backward compatibility, employee adoptability and modularity are key elements to look for in any new technology, says Dokyun Lee, assistant professor of business analytics at Carnegie Mellon University’s Tepper School of Business. “For example, AI technology or social media analytics technology won’t do any good if they can’t connect to an existing database in a meaningful way,” he warns.
“Organizations often underestimate how much work actually goes into operationalizing a new technology. Think of trying to integrate machine learning into a legacy system already in place,” Zeller says. If real-time data or some other critical feature isn’t available before new technology arrives, fixing the problem can be costly and time consuming.
7. Consider the technology’s impact on internal and external stakeholders
A final step when evaluating a new technology’s value is examining its potential disruption cost. Adequate change management training and support is crucial whenever a new technology is introduced to IT staff, internal clients, business partners and other affected parties.
“Everyone needs to understand the reason the technology is moving forward, as well as how it impacts them,” Gabriel says. Neglecting or mishandling support can lead to confusion, anger, mistakes, falling productively and other serious problems. “Ensuring that support is available on a timely basis to help people through any questions or problems they have will reap huge benefits in terms of the acceptance of the technological change, assuming it provides the benefits that it’s designed to achieve,” he notes.