The risks and rewards of new technology adoption
JUL. 3, 2024
How do you determine when to adopt new technologies and when to wait?
The internet. Smartphones. Generative AI.
There’s always a “next big thing” in technology, each promising to revolutionize how we live and work.
The pressure to adopt them as quickly as possible is real. Nobody wants to watch from the sidelines as their competitors race ahead.
But sometimes, the next big thing isn’t all it’s cracked up to be. Remember the metaverse? Despite the initial buzz, it seems to have stumbled before it could truly take off. Virtual reality may still be the computing platform of the future, but numerous companies have struggled to transform it into a viable consumer product.
So, how do you determine when to adopt new technologies and when to exercise strategic patience? This is a critical question for all stakeholders, technical and non-technical alike.
The case for adopting new technologies early
There’s a thrill that comes with being an early technology adopter. Being known as a trailblazer can bolster your company’s reputation, and if all works out as planned, you can take your operations up a level.
Gaining a competitive edge
Throughout history, companies that have been the first to harness new technologies have gained a competitive edge.
Take Netflix, for example. In the early 2000s, the company was a DVD-by-mail service competing with established giants like Blockbuster. However, Netflix recognized the potential of streaming video early on and invested heavily in developing the infrastructure and technology to deliver it.
While Blockbuster clung to its brick-and-mortar model, Netflix’s early adoption of streaming technology allowed it to revolutionize the entertainment industry and become the global powerhouse it is today.
Turbocharged productivity
Rather than incremental upgrades, new technologies can lead to step-change improvements in how businesses operate.
Efficiency and optimization are the most immediate benefits. For instance, companies that recognized the potential of robotic process automation (RPA) around a decade ago were able to turbocharge productivity by automating tedious tasks. This led to cost savings and the ability to bring products to market faster than competitors.
Shaping the future of tech
Every company founder dreams of being the next Steve Jobs or Bill Gates. These icons didn’t just create some of the world’s most successful companies — they shaped the trajectory of technology itself.
Early adopters have the opportunity to join this exclusive club of industry pioneers. Actively engaging with developers and participating in beta programs allows them to play a pivotal role in shaping the features, functionalities, and standards that will define their industry’s future.
The benefits of waiting for widespread adoption
Waiting until a technology proves itself in the market may be the less glamorous approach, but it’s often prudent. Others spend time and effort addressing its shortcomings, allowing you to jump in once it’s a proven commodity.
Mitigating risks
Early-stage technologies are exciting, but they’re often riddled with bugs. These can range from minor annoyances to critical vulnerabilities that jeopardize data security.
“The fallout from discovering a critical security gap in a new program you've hastily implemented can be devastating,” notes Annie Quinton, Sr. Product Analyst at Lumenalta. “In cases like these, being first isn’t worth it.”
Learning from the early adopters
Early adoption comes at a price. You might gain a lead on the field, but you also bear the brunt of working out the kinks of new tools.
Latecomers have the luxury of observing the successes and failures of pioneers. This allows them to glean critical insights into the real-world applications of technology, its potential pitfalls, and best practices for implementation.
As Warren Buffett aptly put it, “It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes.”
Accessing mature tools with robust support
Technologies undergo a process of refinement and optimization as they mature. Early versions may be plagued by glitches, lack essential features, or have limited documentation and support.
However, with time and wider adoption, these issues get ironed out.
Late adopters can benefit from more mature tools that are user-friendly, stable, and backed by comprehensive documentation and reliable support systems.
Moreover, a thriving community of users and developers often forms around mature technologies. Troubleshooting tips and customization options that emerge from this community can be a valuable resource for latecomers.
Factors to weigh in your decision-making process
Choosing to go all-in on new technology or hold off until it matures is a nuanced choice. There’s no one-size-fits-all answer — the right path for your business will depend on a careful evaluation of several key factors:
Business goals and strategic alignment
Before investing in any new solution, take a step back and critically assess how it aligns with your overarching business goals and strategic priorities.
Does the technology address a specific pain point? Does it have the potential to unlock new revenue streams, improve operational efficiency, or enhance customer satisfaction?
If the answer isn’t a resounding “yes,” it may be wise to reconsider or explore alternative options. Quinton explains that “adopting new tech solely just so you can call yourself an early adopter is a recipe for frustration and wasted resources.”
Return on investment (ROI) and cost-benefit analysis
Cutting-edge tech can be alluring, but it’s crucial to approach this decision with a pragmatic, ROI-driven mindset.
Weigh the potential returns against the costs and risks involved, as you would any other investment. Along with upfront expenses, be sure to account for ongoing maintenance, training, and potential disruptions to existing workflows.
Furthermore, consider both the short-term gains, such as increased productivity or reduced costs, and the long-term value the technology can bring to your organization, such as improved market share or competitive advantage.
Organizational readiness and change management
Being an early adopter comes with big changes for your organization. Do you have the necessary resources (including budget, personnel, and infrastructure) to support the implementation and ongoing management of the technology?
Equally important is your team’s willingness and ability to adapt. Chat with employees at all levels to see if they’re ready for this kind of upheaval.
Industry trends and competitive landscape
New technology decisions shouldn’t be made in a vacuum. It’s essential to consider the broader context of your industry, including emerging trends, competitive pressures, and evolving customer expectations.
Is the competition already leveraging similar technologies to gain an edge? Are your customers demanding new features or capabilities that your current systems can’t deliver?
Keeping your ear to the ground via market research, competitor analysis, and customer feedback can provide invaluable insights that inform your technology adoption strategy.
Navigating the technology evaluation and adoption process
Deciding whether or not to implement new technology is just the first step.
To ensure a successful implementation and maximize the return on your investment, it’s crucial to follow a structured approach that involves thorough evaluation, strategic planning, and effective change management.
Engage stakeholders across the board
Before making a big decision like adopting new technology, engage stakeholders from across your organization. Go beyond the C-suite and seek opinions from various departments and functions within your organization.
Doing so ensures that the technology evaluation process takes a wide range of perspectives into account. You want to make sure that your decision considers potential impacts on different business areas.
Pilot projects and proofs of concept (POCs)
As we mentioned earlier, new technologies are rife with bugs and other issues. To prevent a cascade of issues in your organization, move at a slow and steady pace: test, iterate, repeat.
POCs are invaluable at this step. They can help you validate the vendor’s claims, identify potential integration challenges, and gain valuable insights into how the technology will impact your workflows.
Develop a robust training and change management plan
Successful technology adoption hinges on your team’s ability to embrace and utilize the new tools effectively. Large organizations, for example, need clear training plans and constant communication to set them up for success.
Investing in comprehensive training programs is money well spent. It gives your team the skills and knowledge needed to leverage the technology’s full potential. This may involve hands-on workshops, online tutorials, or personalized coaching.
Equally important is a well-designed change management strategy. Change can be disruptive, and resistance is often a natural response. Communicating the benefits of the new technology and openly addressing concerns can help get everyone on board.
The crucial role of non-technical stakeholders
Technical stakeholders are indispensable when considering new technology investments. They have the expertise required to vet new tools inside and out.
That being said, non-technical stakeholders shouldn’t be overlooked. Marketing, sales, finance, and HR teams bring a unique perspective to the table. They may not understand the technical capabilities of new tools, but they do have a deep understanding of the business context and the needs of end users.
Non-technical stakeholders also play a vital role in change management. In many cases, the success of a new technology rollout hinges on their buy-in and advocacy.
Ultimately, deciding whether to be first in line for new tech or wait for others to try it first is a nuanced decision that requires input from a range of stakeholders.
