Technology advancement and the productivity paradox – 3: unique value propositions and blue ocean strategies
(Nota bene: There is a saying that the devil does not need any more volunteer advocates as he gets so many anyway. Nevertheless, I find myself writing this series from what might be viewed as a devil’s advocate and perhaps even something of a Luddite perspective, questioning new technology upgrades and their automatic acceptance and implementation by businesses. My default perspective is to start out looking to the positive values and potentials inherit to technology, but effective, meaningful due diligence has to consider both pro and con sides. And my goal here is to offer a voice counterpoint to the positive message of the sales pitch. And with that clarifying note ….)
This is my third installment in a series on the trade-offs of technology advancement and innovation (see Part 1: the need for a technology inclusion and implementation policy and Part 2: planning for an effective technology implementation policy.)
If Part 2 focused on technology advancement and its acquisition and inclusion with change coming at an evolutionary pace, this posting focuses more on disruptive and revolutionary change. And opportunity for this type of breaking from the past and moving into New can occur in a wide range of places in your business’ system – essentially anywhere in your business where you have potential to create and offer a unique value proposition. When this means developing and offering disruptively new, groundbreaking products or services that would in effect create new market space opportunity, this is said to involve developing and implementing a new and novel blue ocean strategy. Note how this conjoins products and services, marketplaces that they would be offered through, and the underlying business strategy that makes all of this possible. In practice, the three can be all but inseparable, and they certainly are when planning for and executing disruptively New and when you are deploying a novel new unique value proposition.
This series is all about productivity technology advancement and implementation in business systems, and about technology upgrades and implementations and how they would or would not support capacity to create and offer marketplace value, and unique value propositions. I write this posting with new and disruptively emergent productivity technologies in mind and note that acquisition and implementation of them is always all about due diligence and the balance of costs and risks, and savings and benefits. And to focus on the topic of this posting, when dealing with the disruptively New in productivity technology you have to make your due diligence acquisition and implementation decisions from a lack of pre-established, third party track record data that you could calibrate and measure from.
• When you are considering and implementing an evolutionary-change upgrades or innovations, you can benchmark in determining the relative values of Old and New from a relatively comparable product or service. Unexpected and emergent complications and issues can still arise but you have a valid starting point to calculate costs and benefits from. And the more minor and incremental the upgrade from standard and in-place, the lower the risk and the lower the potential reward from entering into this change.
• When you are bringing in, or developing and in-house implementing a disruptively new productivity innovation, you do not have that basis for comparison so you, by definition, face greater risk. You may face much larger potential reward, but increased risk translates directly into increased potential costs too. And certainly from an actuarial perspective this will at least on average and across your systems upgrade processes and cycles, impact upon cost to produce and offer your outgoing products and services and the price point you will have to offer them at in the marketplace.
Successful implementation of disruptively new productivity technology means maximizing actualized returns while minimizing actualized costs. And ideally this will translate into your being able to offer more to the marketplace, and for less and with your more-offered including customer and user-defined unique value propositions that would drive up your market share and your marketplace strength.
I repeat a phrase that I just used above, as it is pivotal to both the balance of this posting and to my next series installment to follow:
• Successful implementation of disruptively new productivity technology means maximizing actualized returns while minimizing actualized costs.
When more disruptively innovative and novel support technologies offer both greater potential benefits and up-sides, and correspondingly greater potential risks and down-sides, how can you as a business manager or owner skew this balance in your favor through better selection, acquisition and implementation processes?
Start out by making an acknowledged preliminary assessment of the costs and risks, and the savings, benefits and rewards of a new potential productivity technology acquisition, and start that with the points and issues that you can most reliably identify and quantify.
• For costs and risks this would include issues such as learning curve costs and requirements for both technology implementation and maintenance – back-end support, and user training and other front-end issues and requirements.
As a working example for that, consider end-user training. As a first draft consideration, how many employees would need training in this? How long and disruptive would this be with time taken from their regular work flow to participate in this training? That at least potentially could add significant indirect costs to a business’ overall operations. And how much would this training cost directly? Note that even when direct costs of this type are negligible or even nonexistent, with for example free, self-paced training and even certification/skills testing options, the indirect costs can be considerable – and larger for more diffused self-paced training options and even if they are low or no-cost up-front.
• What other systems upgrades would you at least start out knowing that you would require in order to even start the process of integrating in a new support technology? I have already cited, in Part 2 of this series, software technology upgrades and innovations that would call for significant hardware upgrades too, as required collateral expenses, in order to be able to use and benefit from the new features that this software acquisition would be brought in-house for. Think through the entire usage and systems support process and look for places where an acquisition would carry with it further-reaching change and upgrade requirements. And this has to include changes in operational processes with their learning curve and other costs too. Learning curves are not always just limited to directly using the new technology resource itself. They can extend outward as systems are changed to adapt and accommodate them. And for truly disruptive and novel productivity technology implementations this can, as an extreme, even mean developing new ways of working. Consider ubiquitous connectivity per se for that, and the move to working from anywhere to anywhere and at any time. Look systems-wide for costs as well as for benefits. And remember security issues in all of this, as well as the more day to day and overtly visible areas of impact.
• And remember this is only going to be a first-step, preliminary evaluation and no matter how carefully and thoroughly you carry through upon it. As a working example consider flash-drives and their integration into business practice and certainly where employees are working off-site and need to be able to bring documents and other files with them, and then bring their work back again and without necessarily taking up large amounts of online connectivity bandwidth. Business use of handhelds provides a second example with security risks and costs entering in for both that might not be predictable in advance.
• Think of this as carrying out a systematic, benchmarking evaluation for making an initial filtering cut, with further evaluations and reviews to follow.
My next series installment is going to take the next step in this process, simply assuming a prospective productivity technology implementation has met first-cut acceptance or rejection criteria and that it has been found by initial evaluation as worthy of at least trial implementation and use. I will be posting on process options for taking this to what could be considered planning and implementation stage 2. You can find related postings at HR and Personnel and also at Ubiquitous Computing and Communications – everywhere all the time.