CIOs Know When to Introduce New Technology

During the past 15 years I have participated in the rollouts of three technologies that fundamentally changed the IT infrastructure of the companies that employed them: client/server architecture, Web-enabled e-business and wireless mobile devices. In the process I’ve developed strong analytical skills that I use to investigate the situations and circumstances that lend themselves to the introduction of new technologies. I’ve also developed an intuitive sense about these same things that complements my analytical side.

Leading a company through an IT-driven transformation requires knowing more than what a technology is capable of. The tricky part is knowing when the right time is to introduce it and where in the organization to implement it in order to demonstrate its value. My analytical side is good at figuring out when something should be done. Then, based on this analysis, I develop a gut feeling for where it should be done.

Making the right call about when and where to introduce new technology is one of the ways you solidify your position as a leader in your company. I use two indicators to determine when the time is right. And I determine where to introduce a new technology by using what I call the “operational art.”

The Right Time to Act

The first indicator that the time is right to introduce a new technology is when you see clear evidence that it can deliver significant returns. If it’s a reduction in operating costs you’re targeting, for example, you would look for more than incremental savings. Because there is always risk associated with implementing new technology as well as time and money involved in installing and learning to use it, whatever benefits you achieve must exceed the risk potential and cover the deployment costs. The second indicator of when the time is right for a new technology is that it provides your company with a new way to do business and generate revenue.

An example of this is Web-enabled e-business technology, which offered companies the potential to increase sales without hiring more salespeople or building new physical locations. But a lot of companies got their timing wrong when they decided to start selling online, because most customers were not ready to actually use the technology. It wasn’t until several years after many companies had installed e-commerce systems that they began to generate significant revenue; companies spent large amounts of money before it was possible to realize much new revenue.

Most companies don’t have the appetite to carry the risk of an unproven technology for long. As a leader, it’s critical that you know whether your company is one of them. It may be central to your company’s business model to be a first mover or a technology innovator; in that case, you’ll time your investment early. But if your company is happier being a follower, it’s better to wait until you have clear proof that a new technology not only can but actually will deliver the expected benefits quickly.

The Right Place to Start

Once you’ve determined the time is right to introduce a new technology, your next step is to decide where in your organization is the best place to use it. This requires you to understand the operating model of your company and how it uses technology to support those operations. Understand what operations will benefit the most from a new technology and then weigh the risks involved with the introduction of this technology against its potential benefits. Select an operation where the risk is manageable and where there will also be big rewards.

This selection process is not entirely an analytical one. There is also a strong element of intuition involved, based on your assessment of potential impacts that a new technology will have on the operations where it could be used. This combination of analysis and intuition is what makes up the operational art. It’s the ability to know where a tactical move (such as introducing new technology) will produce a strategic result (such as the realization of significant new revenue or cost reductions).

I employed this operational art when I introduced the BlackBerry into my company. I implemented it first with the company’s national account sales team instead of providing it to my own IT staff or other internal people. The vice president of sales said his people could use them to increase sales. This would have a bigger impact on our company than would be gained by providing it to our internal staff to increase their productivity.

Plenty of people in the company wanted this technology, but as the IT leader, I had to make the call. I figured the sales team was the most motivated to use it productively instead of fussing over its shortcomings. The first generation of these units had plenty of limitations. They had low-resolution screens. It was cumbersome to open and scroll through e-mails. As phones they were bulkier than cell phones. I felt that the internal staff would be more prone to fixate on these limitations, and as a result, the project wouldn’t generate the returns I knew were needed to prove the concept. The salespeople were highly motivated to overlook the limitations and exploit the opportunity the technology provided. They could use it to stay closer to customers and thus earn more money for the company.

The likelihood of success made the BlackBerry project worth the risk, and the returns more than covered the cost of installing and learning how to use and support the technology. Once we had moved up the learning curve and the devices had improved, we rolled it out to my own IT staff and other internal users.

Winning CIOs make use of their analytical skills to see when a new technology has promise. They understand how their companies make money and what the cost factors are in their companies’ operating models. Then they develop their practice of the operational art—that blend of business knowledge, street smarts and technical savvy—to determine where to best introduce new technology. This is how they guide their companies through the process of selecting and deploying the latest technologies. CIOs who learn to excel at this become indispensable players, and they become leaders in the transformation of their organizations.

Mike Hugos is a partner in AgiLinks, a software company specializing in agility training and the development of agile supply chains. He is a former CIO of Network Services and author of Essentials of Supply Chain Management. He can be reached at mhugos@yahoo.com.