The first step towards solving a problem rests with admitting that you have one. I am writing today to confess that I have a technology problem, although I feel some comfort in the knowledge that I must not be alone. I'm of above average intelligence, college educated, have held executive positions with high tech companies, am not necessarily an early adopter, and pride myself on making logical, rational decisions, even when it involves acquisition decisions. OK, so I read David Taber's article in the February Parallax, ("The Taber Report: Customer Behavior"), which suggests that personal purchase decisions are 80 percent emotional, but still I can aspire, right? Before you read on, understand that this is no anti-technology polemic, but rather a statement on our collective struggle to absorb the technology streaming at us.
Anyway, my problem is best described as technology overdose. Specifically, I currently own more electronics technology than I can personally absorb in five lifetimes, and yet technology and I are far from finished. In my corporate life, although I always tried to make fiscally responsible technology decisions that improved competitiveness and delivered shareholder value, I must admit to being part of more than one attempted technology transition that ended with less than expected results. Scientific studies suggest that Man only uses 8 percent of his effective brainpower, so perhaps there is some direct correlation between our inefficiencies in neurological and technological utilization. I estimate that I effectively use 20 percent of the technological capability that I own, so hey, I'm way ahead of the curve! In a desperate attempt to improve my technological competence, I've even taken a subscription to Wired magazine to keep abreast of the latest in technological trends. It remains to be seen if this will really increase my utilization of currently owned technology or conversely just inspire me to buy more (digital radio, ipod, etc.).
Besides just the simple fact that I own more technology than I apparently need, I have deduced several other themes in my technology ownership. First, the devices that I use most effectively fulfill core needs in my life and somehow deliver lifestyle freedom. Second, because they are increasingly useful or even vital to my daily regimen, I use them more frequently which has concurrently motivated me to learn to take greater advantage of their technological offerings. Indeed, the lifecycle of technology evolves for me from interesting to useful to vital to replacement or obsolescence. My techno devices all fall somewhere in the useful to vital category, since I do generally manage to avoid buying at the interesting stage. The not so evident conclusion is hidden in those devices which I own (e.g., cell phone) with low utilization rates where I may have a vital need in buying that device, but received a lot more concomitant technology than I needed. For example, my state-of-the-art cell phone represents the best example of this. No mere phone, I can take pictures and instantly e-mail them, manage e-mail, peruse the Internet, send text messages, and use it anywhere in the world, except of course, in my home in Texas which is officially located in a "no coverage zone"!
Figure 2: When do you buy technology?
Technology as a business antidote
Now that I've made light of my personal experiences as a technology consumer, let's leap to the arena of corporate technology acquisition and discuss any parallels. Without the benefit of scientific analysis, most of us would probably agree that businesses do an equally poor job of purchasing and assimilating technology into the workplace to achieve intended benefits. We all have war stories of failed software and hardware implementations, and significant technology investments gone awry. Early in my career, I once worked for a company where we sadly joked that we owned more software licenses for applications that we had not implemented than for applications that were implemented. During the heyday of the dot-com era, "supply chain software" seemed to take a parallel maniacal trajectory and proliferated at a high rate. The difficulty as a practitioner rested in ferreting out what the core functionality of any of these packages actually contained and how they might fit into an overall supply chain IT infrastructure. Talk about techno confusion!
Many reasons contribute to the struggles which businesses have in assimilating new technology including poor technology or partner selection, lack of structured 3Pe analysis and redesign, incompetent project management, etc. But more fundamental than any of these, I believe, lies in the delusion that so many companies have suffered so much that they will buy a technological solution to their business problems. Yes, corporate entities, just like consumers, can get "drunk" on technology in their quest for success and mistake enabler for total solution. Corporations, much like we techno junkies, could probably stand some version of a 12-step program to right themselves in the battle for techno sanity.
From whence did all this technology come?
So how and why did we get ourselves into this techno dilemma, or should we even be worried? Why concern ourselves with a personal analysis of consumer technology purchases? Consumer transactions drive over 60 percent of GDP and subsequently heavily influence the development and adoption of new technologies even by the business community. A study underway by Computer Sciences Corp. (CSC) titled "Consumer Technology Will Drive Corporate IT Agenda" (csc.com/features/2005/index) makes this point (e.g., text messaging). Maybe we can learn something from my not so unique consumer technology experience, whether we are consumers or provider/sellers. Regardless, these dynamics apply equally to either set of players. Here are some technology facts that I've personally deduced.
Technology gets cheaper and cheaper per unit of performance. By any measure, in whatever technology, performance per dollar increases exponentially as the technology matures, markets grow, and production costs decrease. I bought my first 20 mghz PC in 1991 for $1500. Thanks to the successful fruition of Moore's Law, I can now buy a 2.8ghz PC with 140X the processing power and many more accompanying features for $500.
High tech companies are "pushers." I worked for high tech companies for many years, so do not think me ungrateful in my assessment here. These companies prosper by developing and pushing technology into the marketplace, thus attempting to find or create markets for their products. Sometimes, innovative technologies begin without an obvious market or use and serendipitously become vital (xerography). Almost always, the performance curve of the technology advances faster than the performance needs of the market, which creates a market dilemma for these companies—how to get the market to buy more.
Again, the PC industry demonstrates this dilemma aptly. In the 90s, not only did many people buy their first PC, but major technological events such as the introduction of Windows or the advent of Internet usage stimulated necessary hardware upgrades by the marketplace—much like Stephen Jay Gould's concept of "punctuated equilibrium" in describing significant geological events that stimulated accelerated spurts of evolution, these technological events motivated technological leaps in development which the marketplace proved willing to absorb. However, as the frequency and impact of these previously significant PC technological events have decreased, reasons for buying a new machine have lessened. The latest consumer drivers, such as the connectivity between digital entertainment and PCs (photography, audio/video, etc) have helped, but have done more to stimulate purchases of these other digital devices than PCs. Thus, the industry growth rate has declined by 50 percent since the year 2000. Indeed, PC acceptance plateaued at about 60 percent market penetration among consumers compared to products like phones at over 90 percent and DVD players at 70 percent (after only seven years when most consumer technologies have only reached about half that rate).
Rejoice or beware disruptive technologies! Read Clayton Christensen's book, The Innovator's Dilemna, to understand how new or initially lesser performing technologies overtake the needs of the marketplace for higher technologies and steal their customers. If you are on the customer end of this phenomenon, then rejoice. If you are a technology provider, then remember Andrew Grove's well spoken adage that "only the paranoid survive".
You get more than you bargained for. Because of the sometimes growing disparity between performance offered and performance required, product features are bundled to entice you to buy other capabilities not on your core list of needs, and thus you get the cell phone that photographs, e/mails, and web surfs when all you really wanted to do was make a phone call. Most technology sellers gain additional commissions, margin and profits when they "up-sell" or bundle other product features beyond the standard offering.
Personal lessons for living with techno overdose
(which I've generally not followed)
Assess your Real Needs First.
Are they real needs or just wants? It sounds like a simple platitude, but most of us fail this logic test. Think about why you are willing to spend the money and add the burden of this new technology to your daily regimen, and whether it will really make your life easier, more efficient or even more fun (emotional needs do qualify!). If you're anal enough, then take the time to write your needs down.
Search, Research, and Countersearch.
Technology overload is matched equally by information overload. Unless you are a persevering researcher with lots of time, you need filters to reduce the avalanche of available data down to an examination of the product features that really matter to you (refer back to item #1). The Internet provides a fire-hose worth of information via a simple Google search, but I routinely go to CNET.com as one of the better consumer electronics reviewers with well-organized, distilled information. Or better yet, I often use the Delphi method by consulting with a couple of techno savvy friends who can quickly give me the scoop on the latest and greatest products.
Compare Cost versus Benefit to Compute Value.
Assuming that you could compellingly define why you needed this new technology, compare the cost and overhead to use and maintain your new purchase. Will this purchase really improve my life or just add another burdensome feature? The key objective should be that it provides greater freedom. Figure 2 graphically depicts that combination of price point and product usefulness where value is achieved, which will vary for each of us,
A crass plug for ChainLink's methodology you say! No, you can really apply some of it even to your personal circumstances. This new technology may require behavioral changes on your part to realize the benefits, so consider whether you're up for it. Technology is not in itself a solution but only an enabler. How many techno devices are laying around your house unused or underutilized?
Take the Deal!
If you made the decision to buy the core functionality, then sometimes the more troublesome decision may be to determine what other features to take through bundled offerings or up-sells. Don't be a sucker, but there are good deals to be had, so take the ones that provide features that might be useful and are marginally priced.
Buy for the Future.
One thing's for sure, whatever you are buying will become obsolete in the not too distant future, if it's not already. Only research can help you avoid buying on the obsolescence end of the curve and instead buy the right technology that will last awhile. Beware the lurking technology transition!
Corporate lessons for succeeding with technology
On a more serious note, here are some ideas on how to survive the avalanche of technology, avoid the lure of its pitfalls, and hopefully succeed with it as the enabler to true process innovation.
3Pe. Long before you've reached the point of considering a technology acquisition, you should have performed the necessary policy and process analysis and exhausted all actions to climb the improvement curve before you need technology innovation to stimulate a new curve. The old adage which still resonates today is "simplify, integrate, and then automate." Furthermore, only by designing new policies, processes, and people requirements can you assure that you will achieve the benefits of the new technology. Many of us have experience with software implementation failures, never achieving projected benefits or "islands of automation" created in factory processes whose benefit is constrained by the unexamined limitations of the upstream or downstream process. In my experience at Dell, we initially worried that software providers or the competition would imitate our much prized configure-to-order IT functionality, until we finally came to the realization that we could give it to them, and it would make little difference, as most were not willing or able to make the fundamental changes in their business model and processes to successfully utilize it.
When the improvement curve flattens, then can innovation spur a new one?
Amazingly, even in the corporate environs, many still fail to perform due diligence with this important first step. Without completing the important analysis and determination of critical core requirements, technology acquisition decisions will be based on emotion, intuition, or some unspoken logic. Once you have decided that you need a technology enabler, distill the requirements list down as much as possible, notating critical needs versus "nice to haves". Get external consulting help if needed, as there are specialists in this field who can provide assistance in focusing and accelerating your technology search (e.g., http://www.technologyevaluation.com/).
Technology Partnerships are a Marriage.
Don't view this as a one-time purchase, but more of a long-term relationship where you will continue to depend on them for not only technical support, but also future development. Check out the potential partner's financial viability, install base, industry reputation, etc. to ensure that your new partner will be there when you need them.
Don't Lead, Don't Lag.
Unproven leading edge product or technology releases contain inherent risk, so allowing others in the market the opportunity to test and stabilize the product before you purchase is generally the better strategy. On the other end of the spectrum, buying yesterday's technology provides risk that technical support may not be available, and that future enhancements are improbable.
Develop an Unbiased Business Case.
Due diligence is the order of the day again. Develop a conservative ROI with documented assumptions that provides a good probability that you can deliver on the projected financial benefits, and perhaps even exceed expectations. I have personally observed in more than one business case the tendency to be overzealous in estimating benefits and underestimating costs. Additionally, document and discuss any qualitative factors. Again more than once, I have observed, to David Taber's point, executives seemingly use business cases to justify multimillion dollar technology decisions that have already been tacitly made based on intuition or emotion. If the boss has already tipped his/her hand on the decision, be brave, and try not to let that influence the development of a sound business case.
Anyway, thanks for listening. Hopefully, I've stimulated some soul searching on your part that will help increase your successes with technology. Personally, I feel better now that I've at least admitted to my own techno peccadilloes. Perhaps I'm headed down the road to recovery, right after I make one last trip to Best Buy.
This article is from Parallax View, ChainLink Research's on-line magazine, read by over 150,000 supply chain and IT professionals each month. Thought-provoking and actionable articles from ChainLink's analysts, top industry executives, researchers, and fellow practitioners. To view the entire magazine, click here.
About the Author
Lonnie Childs is ChainLink Research's Managing Director for Operations and Demand Management. As a senior executive at Dell Computer from 1991 to 2001, Mr. Childs led the creation and growth of one of the most dynamic, innovative, and successful supply chains in the world. At Dell, Mr. Childs also managed large scale business and IT systems implementation projects including MRPII, Supplier Collaboration, and Demand Management. He managed annual procurement spend of $16B (USD) and led the transition of production from US to Malaysian facilities, resulting in $145M (USD) annualized savings in first full year of operation. Since leaving Dell, Mr. Childs has consulted for VP and C-level teams at F500 and Global 500 firms in areas as diverse as re-engineering and implementing demand/supply management policies and processes and establishing a global supply chain trading company for components. Mr. Childs graduated Summa Cum Laude from the University of Texas and has worked towards an MBA at St. Edward's Univ., Austin , TX . Mr. Childs is APICS certified (CPIM, CIRM).
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