How to Place Your Bet on an Emerging Technology
Emerging technologies, such as augmented reality or quantum computing, are a big gamble for business. Investing in them can mean failure, either in delivering value or being strategically significant. But not investing in them can mean losing market share or failing to remain relevant to customers. In this essay, adapted from Driving IT Innovation: A Roadmap for CIOs to Reinvent the Future, authors Heather Smith and James McKeen of Smith School of Business, Queen’s University, discuss some of the challenges in assessing emerging technologies. Driving IT Innovation is based on insights drawn from focus groups with senior IT executives and managers.
Although it is important to know what emerging technologies (ET) are available, organizations have only a limited capacity to absorb them. Therefore it is critical to select only those few that will have the largest business impact. The focus group stressed that it is essential to thoroughly understand the business needs of the organization in order to make this selection. “This is something we need to do better,” said one manager. “Our relationship managers are often too focused on more immediate matters and don’t always take the time to explore future needs.”
Assessment is all the more important because emerging technologies are characterized by a low “signal:noise ratio,” which tends to confuse both business and technology people about the potential of a new technology. “Signal” refers to indicators of value to a firm’s core business, and “noise” refers to factoids, assertions, and beliefs about a technology that are not meaningful signals.
As researcher Amrit Tiwan has noted: “At the earlier stages of the life cycle of an emerging technology, the signal is faint and the noise is overwhelming.... A low signal:noise ratio means that information surrounding an emerging technology is difficult to interpret, leads observers down multiple blind alleys, and requires ... effort and expense to discern meaningful insights.”
ET and Business Value
Amplifying signals involves working closely with the business to better understand where and how value could be delivered with a new technology. One company’s ET staff meet regularly with business leaders to ferret out opportunities by asking, “What do you wish you could do in your business if technology could be found to enable it?”
Several companies routinely hold internal briefings or events where selected emerging technologies and their potential can be presented to executives. ET staff need a deep understanding not only of the business and its needs, goals, and strategies, but also of how the industry is developing because emerging technologies can often provide firms with the opportunity to move into adjacent markets or develop products and services that are complementary to those that are already provided in an industry.
Finally, business and ET staff can work together to amplify signals by applying different frameworks that challenge existing preconceptions and spot non-obvious applications. For example, each of a company’s products and services could be assessed to determine if how they are purchased or delivered could be shifted from physical to digital. The goal of a preliminary assessment is to understand how an emerging technology might affect the organization’s products and services, work, new forms of external engagement, or business models.
Assessing an emerging technology’s technical potential involves a different set of lenses and is generally a more straightforward process. All focus group organizations have technology roadmaps that provide a baseline for determining many of the factors that could be critical to this assessment. These include: technical maturity levels; implications for integration, data, security, and operations; and complexity. The focus group also cautioned about reducing “noise,” noting that much ET work is simply following the crowd, as opposed to true assessment.
Overall, assessment of any emerging technology involves determining both relevance for the business and technical readiness. It requires having both a deep knowledge of the organization’s business and a broad appreciation of technology.
The focus group concluded that technology is meaningless unless it is understood in a business context, and they agreed that it is only through strong partnerships with the business that emerging technologies can have the type of impact a business is looking for.
“There are two places you can start to assess an emerging technology,” explained one manager. “You can look for an interesting technology that has a potential business benefit or you can find an interesting business opportunity and determine how technology can help you do business differently. Typically, you iterate between these two perspectives when assessing an emerging technology, but you do it differently in every case.”
Heather Smith is a senior research associate with Smith School of Business at Queen’s University and co-author (with James McKeen) of eight books. She is also a senior research associate with the American Society for Information Management’s Advanced Practices Council. James D. McKeen is Professor Emeritus at Smith School of Business and Senior Vice President and Chief Technology Officer at Empire Life Insurance. He has worked in the IT field for many years as a practitioner, researcher, and consultant. Learn more about Driving IT Innovation here