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IT Stance – Does your investment in IT match your business needs?

IT Stance – Does your investment in IT match your business needs?

Article by Daryl Webb
Specialist Services, Practice Leader

One of the sources of disconnect between business leadership and IT is a lack of mutual agreement as to how aggressive the firm’s investment in IT should be. I refer to this leaning as the firm’s IT stance. Alignment on stance can help defuse much of the tension and frustration between IT and the business.

This disconnect is often illustrated by IT managers trying to justify increased spending on IT, particularly on new technologies that have the potential to elevate the firm’s competitive standing, and the response from managers, still reeling from the failure of the last technology rollout.

You don’t need to have read Everitt Roger’s 1962 seminal work – The Diffusion of Innovations – to understand his model describing how, why, and at what rate new ideas and technology spread. The model – with updated language – was popularised by Geoffrey Moore in his book Crossing The Chasm.

Technology adopters are categorised into one of five groups, recognising the differences in the willingness of firms (or individuals) to be reliant on unproven or novel technology: Innovators, Early Adopters, Early Majority, Late Majority, and Laggards.

The firm’s IT stance is – in essence – where you sit on this curve. The lack of alignment comes from where IT believe you are (or should be), and where company leadership believes you should be.

In considering your stance, you are making a deliberate choice as to your posture. Company management need to decide where they want the firm to be, rather than leaving this to IT or suppliers.

Stance is a highly subjective interpretation of your position on the curve rather than a formula-based assessment. It is more important to motivate the internal discussion of where your firm should sit than to split hairs as to whether you are at the 40% mark or the 44% mark.

At the movies

Let’s look at an example of how we can make deliberate choices using this model. Consider a seeing a movie, illustrated below. We can draw parallels between a number of modes of seeing a movie and the adoption curve: Innovators want to be first, irrespective of the cost or risk. This is akin to spending more to going to a gala premiere even before any reviews have been published. Will it be a good film? Will it be worth the money? Choosing this position is active and aggressive.

The early adopters also want to be in early, but wait for feedback from their Innovator friends. They aim to see the movie on the opening weekend: no spoilers! They have slightly lowered the risk of sitting through a bad experience, but are still paying a reasonable premium: movie tickets, parking, concession stand prices, and a babysitter.

The Early Majority are the mainstream, waiting for the queues to shorten, the cinemas to be less packed, and maybe even using one of the cinema’s promotions to get cheaper seats. They will have read the reviews, perhaps heard from friends how good the movie is. They still have the ‘night out’ premium, but can generally filter out the bad from the good. A reasonable trade-off in their mind.

Late majority viewers go for an even lower price point, trading cost off against time: renting the DVD (or iTunes or Netflix). They pay a much lower cost than theatre-goers, but have waited three or more months to see the film. They will have heard Haley Joel Osment’s secret (‘I See Dead People’), and know exactly who dies in Episode VII. But the lower cost and convenience outweigh the value of surprise: the popcorn is much cheaper, and no babysitter required.

The tail of the curve are the Laggards. For them, paying to see a movie is an unnecessary luxury, and they would rather spend their entertainment dollars elsewhere. They wait for the movie to be on free-to-air TV. They tolerate the frequent ad breaks for the budget, lowest cost experience, and get to filter out the dross that they wouldn’t enjoy.

Think about two movies when running through these stages: Baywatch (yes, the one starring Zac Efron and The Rock), and Dunkirk. Both movies are targeting the mainstream. One’s a turkey, the other critically acclaimed. These assessments are largely made after the fact – certainly after the opening weekend.

An important consideration here is that each of these positions is valid, and are generally deliberate positions movie-watchers make. Similarly, each position on the IT adoption curve is valid, and should be the result of deliberate choice.

I find the language used in the model to be in favour of the top 50%. Being part of the Late Majority can itself be seen to be a negative. Being a Laggard is something to be avoided, akin to being branded a Luddite. But MATH! means in every industry there will be laggards, by definition, even if that lateness is a matter of months, rather than years or decades.

Irrespective of the language, my experience is that IT teams overwhelmingly believe their firm should be in the top 50%, and ideally closer to the 20% mark. People who work in IT tend to have a very positive view of IT innovation, which is understandable. Most IT folk describe themselves – personally – as Innovators or Early Adopters.

Incongruent stances

IT staff want to work for firms that recognise the opportunities from IT, and are willing to compete through IT investment. They believe firms should be adopting new technologies sooner, viewing these technologies as inevitable, necessary, and offering competitive advantage.

Vendors, of course, are selling at the front of the curve. Their salespeople are incentivised on selling the latest toys with the fattest margins. Early in the product life cycle, vendors get away with proprietary solutions that lock you in to them for the life of the purchase. Vendors feed the technophilic tendencies of your IT staff with impressive new gadgets and case studies of successful early adopters. They co-opt your own staff to be their product champions.

Businesspeople, on the other hand, are more cynical in their experience of IT investment. As a result, managers are strongly in favour of their firms being in the bottom 50% (even more definitively if more neutral terms are used). Even if an individual manager is themselves an early adopter of technology, this does not necessarily translate into their view of where the firm should be. The main outliers here are start-ups.

What is it like being part of the other (late) half? The late majority is characterised by adopters who wait for the technology hype to have abated, and for the technology to be a part of the mainstream: standardised and commoditised products, offered by a range of suppliers with little vendor power, requiring mainstream skillsets to design, deploy, and use. These firms spend less, but forego the potential upside of exploiting new technologies earlier in their lifecycle.

Aligning stance

Using IT stance in a business is not a matter of finding a middle ground between the two camps. I use IT stance to re-calibrate the expectations of IT teams as to the view and expectations of their business leadership. Alignment in almost every case is achieved by IT shifting their stance rather than the business shifting theirs.

These are not easy discussions. IT managers want to believe their influence on the firm – and the value of IT innovation – is much greater than it really is. Bursting that bubble is a necessary step to realignment. IT teams need to reorient their approach to successfully delivering value in the mainstream, matching the business expectations.

Be prepared: The change in IT mindset is sometimes achieved through a change in personnel. I have dealt with some IT managers who are so locked into their approach that they believe IT’s role is to direct the business.

Using IT stance leads to discussions that are intended to be a starting point to achieving alignment between the business and IT. It is a simple model to illustrate the gap that exists in businesses. At the least it is useful to help explain the disconnection. There is no formula for calculating your stance, and there is no formula for how to move to alignment even once the delta between the two positions – IT’s and the business – has been articulated.

Daryl Webb heads Staples Rodway’s Technology and Risk Practice in Auckland. His career started in software development, followed by stints in IT Management, Consulting, M&A and tech-sector business management. He watches most movies on Netflix.

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