Early Adopters’ Secrets For Success With New Tech

There have been early adopters—and laggards—probably for as long as there has been new technology. Surely, when the first wheel was rolled out in 3000 B.C., just a handful of Mesopotamians had enough insight and risk tolerance to give it a whirl while others looked on from a safe distance.

Not much has changed. That brave soul willing to embrace The New still sits in the same spot on the bell curve that Everett Rogers drew up back in 1962 to denote what he called the “diffusion of innovation”—just after the innovator but well before the early majority, the late majority and the laggards.

But within corporate IT, watching early adopters as they stumble isn’t necessarily the safest course anymore. The pace of technology change has increased so much that corporate IT leaders who don’t embrace emerging trends at some level risk ending up behind the competition. Gartner produced 70 “hype cycle” documents (analyses of new technology adoption trends) covering 1,500 new technologies last year. What’s more, it’s easier than ever to take new technologies for a test drive.

“Sometimes you can do it in your office in an afternoon,” says Matt Brown, a principal analyst and research director with Forrester Research. “You can set up accounts and test out some new collaborative technology in a matter of hours before making a full commitment to it.” Some emerging technologies, such as Google Apps, the iPhone and many open-source applications, don’t even require a full enterprisewide rollout—at least not in the old, big-bang fashion—to get real value out of their implementation. Then there’s the fact that anyone, not just people in the IT department, can, and will, try out the latest tools, whether or not CIOs sanction them.

Adoption of new technologies has spiked as IT has evolved from the complex tools, centralized systems and transaction-based software to the lightweight tools, abundant information and ubiquitous network-centric software that’s taking over the marketplace today, says Brown. As a result, early adoption of emerging technology is no longer limited to tech-centric companies or those with pockets deep enough to absorb the risk. CIOs in industries ranging from health care to car manufacturing see piloting and testing lesser-proven technologies as a critical part of their role.

“Ten years ago, CIOs spent a lot of time getting transactional systems—the giant stuff—in place. But that’s not so much the job anymore,” says Robert Urwiler, CIO of Vail Resorts. “CIOs have more freedom to explore innovative ways to provide business transformation and more freedom to look around at emerging technologies. I feel like I have an obligation to do that.” If Rogers were to revisit the idea of early adoption in IT in 2008, that classical distribution curve might not look so bell-shaped anymore.

But none of this means early adoption can’t be difficult and costly if it isn’t managed well. Four CIOs who have mastered the art of early adoption today share methods that work for selling new technology to the business, for creating repeatable processes to shepherd new ideas into practice, for determining the potential benefit of new systems and for creating flexible ways to roll out emerging tools.

Virgin America:

Put Emerging Technology—and Risk—in Business Terms

Talk to Bill Maguire long enough and he could convince you he came out of the womb embracing emerging technology. “For as long as I can remember, I’ve always been out there looking at new technologies, figuring out how to exploit them,” Maguire says. “I’m diligent about trying to keep up and have a good degree of confidence in my ability to do so.”

Seven Tips for Rolling Out Emerging Tech

Give business leaders a layman’s tutorial on the role of any emerging tool or process.

Make sure the larger organization understands the risk of any new technology and what went into your risk assessment.

Invite more conservative members of the IT team to weigh in on emerging trends. They may have technical insight to prevent costly mistakes later on.

Test unproven technology on a few hundred IT guinea pigs before you conduct larger corporate pilots.

Create a repeatable process for shepherding new ideas from proof of concept to rollout that will also weed out technologies that aren’t ready for prime time.

Harness the energy of early adopters in the business and broadly publicize their success with the tools.

Consider segmenting your user base and wait to deploy emerging tools to less-adventurous users until they’re ready.

-S.O.

Maguire’s history as an early adopter contains successful and, well, less-successful chapters. As the CIO of Legato, Maguire was one of the first IT executives to implement VoIP in 2001, saving the company more than $3 million. The year before, running the U.S. Postal Service’s primary data center as manager of computer operations, his organization was among the largest—and earliest—users of VMware in the country. A decade earlier, Maguire had introduced to the USPS one of the first virtual storage solutions in the country, StorageTek’s Iceberg disk-array storage subsystem.

That didn’t turn out as well.

“We brought two of the big storage units in house, and [the vendor] made a big splash,” Maguire recalls. “It was bleeding edge.” It was also very complicated. What should have been up and running in a few weeks took months to get online. “Once we got it, it put us way out in front,” says Maguire. “But it took three times longer than expected.”

Nothing has dampened Maguire’s enthusiasm for technology innovation, though. “I’m a glutton for it,” he says. Today, however, Maguire knows the right questions to ask in order to evaluate the business risks. “You have to understand your environment very well,” he says. “Then you have a good idea of whether a piece of new technology will really work for you or not.”

At Virgin America, where Maguire landed as CIO two years ago, that has been easier than at previous companies because Maguire built the architecture from the ground up. Yet risks still lurk in Maguire’s tech choices from the edge.

Virgin America’s application stack is open-sourced to the hilt, from spam filtering to load balancing to document management. Although open-source enterprise systems aren’t yet a mainstream tech choice, it makes good business sense because it enables the carrier to keep IT costs down. But because the company is growing (it now runs about 100 flights a day) there’s concern whether these free or cheap solutions will scale. “With spam filtering, when you’re getting a couple thousand e-mails a day, it’s no big deal. But when you start getting 20,000, can you handle that?” Maguire did scalability pretesting, but it’s something he must monitor as the company expands.

Maguire doesn’t fall for emerging technology just because it’s new. At Virgin America, new technology must either improve productivity or keep costs low. Successful deployment starts with making sure company leaders understand the business case and the risks associated with less-tested solutions. Maguire might begin by telling them in basic terms what load-balancing software Ultra Monkey actually does. He then explains his thinking behind the open-source option: It costs $3,500 per server versus a non-open-source option at $90,000 per box. A more extreme example is the free, Web-based document management solution Knowledge Tree, one of the first open-source enterprise content management systems, which Maguire says took only a few hours to roll out companywide. The tested, commercial option more familiar to business leaders—Documentum—would have cost an estimated $1 million. Finally, Maguire gives Virgin’s leaders a risk assessment for each new system—from low to extremely high—and the criteria he used to make the assessment.

It’s amazing what a dramatically reduced price tag does for the business’s willingness to take a chance on new systems.

“They’ll at least give you a few months to try it out,” he says. But not everything makes the final cut. Maguire tried out a free, open-source CRM solution from OpenCMS. And he got what he paid for. “We gave it a whirl. It didn’t have the true functionality we needed in a CRM solution.” Virgin America will probably opt for another open-source option, Maguire says, once the company has defined the requirements for it. (He’s considering on-demand vendor SugarCRM.)

Maguire’s biggest aides when assessing the risks of emerging technology are also his biggest doubters: the business systems analysts. “They’re technically knowledgeable, but also understand the business,” he says. “And they’re the most conservative because they know whether something is really going to meet business requirements. They don’t have time to goof around with products that don’t solve a business need.”

Vail Resorts:

The Search for the Next Big Thing

Vail Resorts’ Urwiler and his team of 110 think of themselves as technology innovators because they don’t work in a tech-centric business. “All technology innovation comes through the IT team so that has to be part of our core competency,” says Urwiler, who previously worked at software maker Macromedia. “It doesn’t mean we’re always going to be the very first user of software, but it does mean we’re always on the lookout.”

From his perch a mile high in Broomfield, Colo., Urwiler explores everything from social networking tools to mobile device applications to biometrics, looking for emerging technology that might be brought to bear at the company’s ski mountains in Vail, Beaver Creek, Breckenridge, Keystone or Heavenly. He works closely with vendors to identify emerging trends, keeps his ears open at conferences and talks to his peers. And he encourages his team to keep abreast of the latest IT tools. “Ideas come from every place,” Urwiler says. The best ones are those that can provide competitive differentiation for Vail Resorts by improving the guest experience.

When Urwiler explores new technologies, he worries most about the potentially negative effect on the end customer. “Once we set an expectation about a new tool, it has to work,” he says. “We are very cautious about what we expose to a guest. This is the vacation of the year for some of them.” Urwiler doesn’t want to be the one to ruin it. To manage the flow of new ideas and make sure only technologies that will improve the guest experience get the green light, Urwiler created Vail Labs. It’s an idea incubator for vetting ideas and moving those with potential value from proof of concept to rollout.

The RFID guest tags Vail Resorts will roll out next season started there. Urwiler’s team looked at biometric passes being used at some theme parks, which are based on finger geometry and involve scanning people’s hands. The Vail Resorts team determined that scanning hands wouldn’t work in the heavily gloved and layered ski environment, but the RFID component of such a system had promise.

Vail Labs fielded a proof of concept on the slopes, bringing mountain operations staff into the process. “Early on, there’s always a natural skepticism. You’re dealing with operations people who are very good at what they do. IT comes in with grand ideas about how to improve that, and there’s a show-me mentality.” For a pilot last season, 1,000 patrollers and ski instructors wore RFIDs while Vail Labs logged information on usability. The system, which got the go-ahead, uses an RFID chip on a lanyard (like the bar-code ski passes Vail Resorts had employed for years) that can be scanned right through a jacket. The Vail Labs process is also designed to weed out solutions that aren’t ready for mountain scrutiny. If a new tool fails to meet requirements for usability and reliability, if there are concerns about the vendor or if the cost-benefit analysis doesn’t add up, the technology never leaves the lab.

Last season, Urwiler looked at a friend-finder application for mobile devices. Urwiler had an agreement with the vendor whereby Vail Resorts would pay through a predefined usage model only after the technology proved usable. “The proof of concept was brilliant. There was a lot of excitement around it.” The pilot wasn’t so thrilling. The application, intended to enable skiers to locate each other via GPS, did not meet the reliability threshold. Urwiler and team are still hopeful in making the solution work. “But because we took a conservative approach to it, we had very little money invested,” says Urwiler. “It was low risk.”

Genentech:

Controlled Chaos and the Scientific Method

“I have a high level of comfort with paradox and ambiguity,” says Todd Pierce. “That helps when talking about new technology.”

That’s a bit of an understatement from the VP of Corporate IT of Genentech, who’s currently overseeing piecemeal rollouts of Google apps and iPhones—and who several years ago installed a cellular data service network and Wi-Fi access campuswide. “A lot of being successful is figuring out what tensions—what paradoxes and conflicts—to hold,” Pierce continues. “Combining what’s possible with what’s practical—holding that tension—determines how successful I am as CIO.”

Cycling in the latest innovative technology is truly an exercise in controlled chaos for Pierce, who sees his primary role to be figuring out how fast to deploy emerging technology to gain the ultimate benefit. Which, Pierce notes, turns out to be a pretty tall order with new tools being introduced at a faster rate than ever before. The scientific approach of a biotech company, currently exploring new treatments for cancer and auto­immune disease, is boon and bane for IT. It’s an innovative bunch, for sure. “But that scientific mentality makes it very easy for them to question what you’re doing,” says Pierce. “People here are very willing to try new things, but it can’t just be new. It has to be new and better. And you have to prove it.”

Pierce evaluates any new technology on a host of dimensions: Who can he serve with it? How reliable and efficient is the tool and associated processes? How much does it cost? How does it impact IT’s relationship with the business? At what scale can he deploy it? And what is its life cycle?

The company was using 5,000 mobile telecommunication devices, including BlackBerrys, last year when the iPhone hit the market. The average consumer who bought it right away may have seen a sleek, new mobile phone to add to a growing gadget collection. But Pierce saw a business solution. Genentech deals with a lot of image-based data, but no one could imagine accessing it with the devices they were using. Pierce saw the iPhone’s multitouch interface—which allows users to flip rapidly through photos by merely “flicking” a fingertip on its screen or to resize a photo by “pinching” the image with two fingers—as an enabler for a truly mobile Genentech workforce.

He tempered his excitement with a five-month study last year, for which he gave iPhones to a group of mobile device users on his IT staff. He observed adoption rates and conducted three user surveys. Eighty-five percent of users preferred the iPhone. To date, Pierce has rolled out 3,000 of them.

The key for Pierce is that he doesn’t have to get to full consensus before rolling out an emerging solution. Ideas are floated. Tests are run. The cross-functional group of five VPs that oversee IT strategy and prioritize projects will argue back and forth about which emerging technologies should be deployed more widely within the organization. But at a certain point—once everyone’s concerns have been considered and the potential value of a technology has been validated—says Pierce, “I become the decision maker.”

It’s not as scary as it sounds. “We have a CEO who would rather be fast and make a mistake and recover from it than be slow and miss something,” Pierce says. Plus, Pierce doesn’t see the embrace of emerging technologies as an all-or-nothing proposition. “We don’t have to do everything all one way, or wait for all the factors to line up,” he says, “A lot of decision makers get caught in that trap.”

Instead, Pierce segments his user base. Not everyone needs an iPhone. Maybe Google apps aren’t a good solution enterprisewide. “There are cultural barriers when you have this much diversity of talent,” says Pierce. “So we’re breaking things down into smaller segments and asking, Is this segment worth servicing in this way? We’re allowing for more personalization, more customization, more choice.”

That approach doesn’t work all the time. “It’s tricky with technologies that require you to enter at scale. You can’t phase your way into SAP,” says Pierce, referencing Genentech’s biggest IT investment of all time. In fact, there are more than a few products and uses of emerging technologies Pierce hasn’t found to be successful during his six years as CIO. Web access controls, portals, rules engines, content management systems—none of these made it much past the pilot stage. “What these things have in common is that they have too much complexity and require too large of an investment to implement and maintain,” Pierce says. “(They) will probably be replaced by less-expensive and less-complex solutions.”

With Google apps, however, Pierce started out with 100 users. He now has 1,000 people using the software, at just $50 a head. And Pierce can justify a bigger rollout based on the benefits of the calendaring system alone. If any of the other applications show value, it’s an added bonus.

How to Decide When New Tech Is Worth Trying

Early adoption of emerging technology is no longer limited to tech-centric companies or to those with deep pockets. But CIOs must be smart when embracing less-tested tools. Here are 10 questions to ask before taking the plunge.

How does this solution fit into my existing environment?

What is the business benefit (even if I can’t prove an ROI yet)?

What are the risks?

Can I explain this technology to my CEO in 30 seconds or less?

Do I know who will use it?

Can I test it without business disruption and without spending lots of money?

Is the vendor stable?

Will this solution scale?

Does my staff have the expertise to manage it?

How will this emerging technology affect my customers or suppliers?

-S.O.

Dannon:

The Art of Modern Mainstreaming

Any organization can play with cool new things,” says E.J. Hutchinson, CIO of the Dannon Company. “They key is figuring out which ones will actually drive business value and mainstreaming those into the organization.”

To make the cut at Dannon, a “cool new thing” has to help the company increase sales, increase market share or improve efficiency. Once Hutchinson’s team proves an emerging technology is worthwhile, the real work begins—rolling it out to the workforce and creating new business processes to get value from it. Mainstreaming it, in other words.

“Mainstreaming is when the business sees the solution or tool as something they wish to use, day in day out,” Hutchinson says. Of course, mainstreaming isn’t what it used to be—a dictate from IT about which tools thou shall and shalt not use. Today it can mean having to support several generations of technology for some users until the larger universe of them catches up. And it’s particularly tricky given Hutchinson’s diverse workforce.

“The workers coming out of school today have only had the Internet,” Hutchinson says. “The way I hate having to write a letter and go to the post office to send it, this generation feels the same way about e-mail. They’d rather use IM, SMS or avatars.” Meanwhile, he adds, the adoption cycle from research to rollout, which used to take years, is compressed to a year or even less.

Hutchinson is figuring out the best methods for fast and effective mainstreaming of new tools with the rollout of Dannon’s massive, multimillion-dollar Unified Communications and Collaboration (UC2) project. It’s one of Dannon’s five strategic IT projects today. UC2 encompasses not only a leading-edge, unified communications component (whereby calls and e-mail and video conferences can transfer from a business phone to a cell phone to home to hotel without interruption, for example) but also the exploration of Web 2.0 tools such as wikis, blogs and technologies with capabilities similar to those provided by Facebook and Second Life, which have seeped into the mainstream of many people’s personal lives, but which remain unproven in the enterprise. Voice and data convergence won’t be widely adopted for a couple more years, according to Gartner, and telepresence collaboration (technology that enables users to feel as if they are together with remote colleagues) is five to 10 years out.

A consumer products company may seem an unlikely candidate for leading the charge toward unified communications and collaboration technology. “The bulk of our advantage is in product differentiation,” admits Hutchinson. “But communication in this company has gotten so complex that e-mail and phone just aren’t cutting it.”

Jim Panos, Hutchinson’s director of informing and innovation for the Dannon Company, along with CTO of Danone North America Mike Close, conducted a UC2 pilot within IS. They didn’t encounter any interoperability issues, because Dannon had been diligent about adopting standards-based technology in the past. Concerns about network capacity were solved with some additional investment in the network backbone and network traffic management. At a corporate leadership event, Dannon IS/IT highlighted some UC2 capabilities—a wiki for month-end financial closes and a video-conference capability for monthly business unit updates that could replace costly executive travel. Top business executives were sold on the value of UC2 right away.

Dannon is about halfway through a rollout that could take another six months to a year. Panos has found that audio and video conferencing usage spikes shortly after these tools are given to new users. But, Panos points out, “there’s a difference between adopting capabilities and institutionalizing them. The challenge is to take those tools and redefine business processes. How do you use conferencing in coordination with social networking tools to take communication to the next level?” Panos and Close have been working with the business to answer those questions. Following the executive team presentation, they solicited early adopters to join the pilot. “There’s a huge upside because people are inventing and innovating in their own personal lives,” says Panos. “You can leverage the consumer side of technology.”

One HR leader started interviewing candidates by teleconference instead of flying them to North American headquarters in White Plains, NY. Finance figured out a way to use a collaborative website to eliminate the mega e-mail files they’d send around during a close. “You can’t underestimate the value of putting these tools into people’s hands early,” says Close. “The business folks innovated with the tools. They’d say ‘I get it, but can I use it to do this?’ That’s where it takes off.” Then Hutchinson spreads the word. He uses a wiki to share progress with business units. He is working with his parent company, Groupe Danone and a network of regional business and IT leaders who share their UC2 approaches and concepts.

Differing adoption rates persist, however. Just as voice mail has not been eradicated by e-mail, IT leaders don’t expect the UC2 tools to replace all existing communication technology. “Both methods have to be there for a while. We’re going to have wikis and blogs, but some people will still [feel] comfortable with more traditional methods of communication,” says Panos. “We say, ‘Here’s another possible way to do things.'”

The approach may seem ad hoc, but there are some guiding principles in place. Before moving ahead with any new UC2 application, Hutchinson’s team needs some positive responses to a handful of questions: Is the solution scalable globally? Does it look like it will have a positive midterm return? Will it work with existing equipment? Is the vendor going to be around to support it? Are other companies using the solution?

It can make ROI calculations tricky, though. Beyond reduced travel costs and some increased productivity calculations, the payoff of UC2 is a little amorphous—increased quality of communication and work-life benefits for employees, for example. So Hutchinson measures success for the project differently, by tracking usability, adoption rates and employee feedback. The ROI is long term, and senior leaders get it. “[UC2] supports sustainability. It gives back time,” Hutchinson says. “Those are soft benefits, but ones that are on the minds of executives today.”

Next, Hutchinson’s team will explore how other emerging communication and collaboration tools—intelligent search, streaming video on mobile devices—can take UC2 even further. “I don’t see a point where we’ll be done,” says Hutchinson.

“I fundamentally believe what John F. Kennedy said: ‘Change is the law of life. And those who look only to the past or present are certain to miss the future,'” he adds. “We’re not going to be bleeding edge, but we’re always going to be early.”