Develop A Winning Technology Investment Strategy
Lots of places have in-house gurus but very few have created formal positions to track the major technology trends that can impact their companies. I've always found this amazing given the pace of technology and business change. Maybe it's time for all of us to rethink our technology watch strategies.
So how do you identify the technologies most likely to keep your company growing and profitable? The explosion in technology has changed the way you buy and apply technology and has forever changed expectations about how technology can and should influence your connectivity to customers, suppliers and employees.
What you need is a technology investment agenda that helps you identify the technologies in which you should invest more and those that get little or none of your financial attention.
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The agenda ultimately must be practical: While blue sky research projects can be lots of fun (especially for those who conduct them), management must find the technologies likely to yield the most growth and profitability, not the coolest write-up in a technical trade publication.
But this can be tough especially when there's so much technology to track -- and relatively little certainty about what your business models and processes will look like in two or three years.
The trick is to identify the right technologies at the right time and make the most cost-effective investments possible. Or, stated a little differently, it's hard to innovate if you don't track trends in computing and communications technology.
The components of a technology watch strategy are listed below and should help you determine where you are today and where you need to go.
Business Strategy Linkages
As always, it's essential that you define the business models and processes that you'll pursue over the next 2-3 years. Some might argue for a longer lens, but it's tough enough to extrapolate out 2-3 years. These models and trends will provide the anchor for assessing emerging technology trends.
Macro Technology Trends
Let's identify some technologies that should appear on everyone's list, technologies that will impact a wide range of horizontal and vertical industries:
No doubt there are others. This is an almost generic list; the key is to distill it down to those likely to most impact your business.
Key Technology Areas
Simplicity is important here. A long list of cool technologies doesn't help many companies with their business/technology alignment. The key is to reduce the number to those that can be monitored and can be piloted. This is the proverbial technology hit list, as famous for what's on it as for what's not.
'Hit List' Development & Pilot Projects
The purpose of technology monitoring and assessment is to develop lists of technologies likely to impact your business. Hit lists are excellent devices for rank-ordering and screening technologies. They also focus attention on specific technology opportunities. The most promising technologies should be piloted. Pilots should be sponsored by all those who might benefit from the application of the technology.
In other words, don't go off and do pilots all by yourself in some obscure part of the company. Quite the opposite approach is recommended here: Involve as many technology and line of business professionals as possible, and publicize the progress the pilot application is making (or not making). The purpose of the pilot is to determine if the technology will cost-effectively solve problems that to date have proven difficult and expensive to solve.
Pilot projects should be real projects. They should have project managers, schedules, milestones, and budgets. They also need dedicated professionals to objectively determine where the promise really lies (see Metrics below).
Pilot projects should not last too long: a pilot project that requires six or more months to yield the classic go/no go result is much less likely to succeed than one that yields an answer in 60 days. In fact, if you institutionalize the piloting process, your ability to attract funds to conduct technology pilots will correlate to how quickly you've delivered results in the past.
Technology Investment Effectiveness Metrics
Investments you make in new technologies (and in the pilots that justify these investments) should be measured over time to determine if the technology is delivering on the promise you expected.
Metrics should be developed that address the rationale for the technology's deployment, metrics such as cost, speed, effectiveness, and the like, as well as business value metrics, like customer satisfaction, market share, and profitability.
All of this needs to keep happening: An effective technology watch strategy continues forever. You need to model your business models and processes continuously as well as the technologies likely to enable them.
Some companies institutionalize the process in the form of in-house R&D labs, "skunkworks," or "incubators." You should do whatever's likely to work in your company.
Steve Andriole is the Thomas G. Labrecque Professor of Business at Villanova University where he conducts applied research in business/technology alignment. He is also the founder & CTO of TechVestCo, a new economy consortium that focuses on optimizing investments in information technology. He can be reached at email@example.com. This column first appeared on Datamation, an internet.com site.