Evaluating Technology Innovations

Managers need to assess different levels of technology innovation. On a large scale, managers in the mid-1990s had to assess the relevance of e-business and e-commerce to their organizations. For those that have accepted its relevance, there are smaller-scale, more detailed innovations to evaluate. For example, personalization technology is intended to enhance the customer’s online experience and increase their loyalty. For example, Silicon.com uses personalization to tailor information for IT managers. Online bookstores use personalization to tailor offers to past purchasers. While the benefits may be clear to media or e-tail sites, other managers will need to assess its relevance to them. A technique such as personalization requires a large investment in software and hardware technology such as Broadvision or Engage to be able to implement it effectively. How does the manager decide whether to proceed and which solution to adopt? Guy Galboiz, an entrepreneur and technology consultant provides insights that a manager may need if he has to evaluate several articles in the trade and general press which has highlighted an opportunity or need, and they then face a difficult decision as to whether:

  • ignore the use of the technique, perhaps because it is felt to be too expensive, untried, or they simply don’t believe the benefits will outweigh the costs.
  • enthusiastically adopt the technique without a detailed evaluation since the hype alone convinces the manager that the technique should be adopted.
  • evaluate the technique and then take a decision whether to adopt it according to the evaluation.

Depending on the attitude of the manager, this behavior can be summarized as:

  1. Cautious, ‘wait and see’ approach.
  2. Risk taking, early adopter approach.
  3. Intermediate approach.

Academics have identified a common process that occurs when new products are introduced to a market. This is the diffusion-adoption process and is represented by the bell-curve in the Those in trial new products were identified as innovators, early adopter, early majority, late majority, to the laggards.

Diffusion-adoption curve

The Diffusion-adoption curve can be used in two main ways as an analytical tool to help managers understand the adoption process. First it can be used to understand the stage at which customers are in adoption of a technology, or any product. For example, the Internet is now a well-established tool and in many developed countries we are into the late majority phase of adoption with larger numbers of users of services. This suggests it is essential to use this medium for marketing purposes. But if we look at WAP mobile phone Internet access we are in the innovator phase, so investment now may be wasted since it is not clear how many will adopt the product. Secondly, managers can look at adoption of a new technique by other businesses – from an organizational perspective. For example, an online supermarket could look at how many other e-trailers have adopted personalization to evaluate whether it is worthwhile adopting the technique.

Having the capabilities to respond to innovation are a strategic issue for businesses. For success these are some of the factors that have been identified:

Growth orientation – a long rather than short-term vision

Vigilance – the capability of environment scanning

Commitment to technology – willingness to invest in technology

Acceptance of risk – willingness to take managed risks

Cross functional co-operation – capability for collaboration across functional areas

Receptivity – the ability to respond to externally developed technology

Slack – allowing time to investigate new technological opportunities

Adaptability – a readiness to accept change

Diverse range of skills – technical and business skills and experience