Technology’s value depends on what it can deliver to a company or the customer

The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.

 Bill Gates            

New technology, by itself, has no value to a company. The company must determine what value it brings to either the company or to the company's customers.

Today, digital technology, and more importantly, the combination of digital technology, database

technology, and new communications methods represents a disruptive threat to many industries. 

Understanding and correctly using these technologies means  the key to growing in the future.

So how does Executive Management make these decision on what technology to focus resources on developing and implementing? 

Each company has to create a specific strategy and develop answers for itself.

And the first question to ask centers on:

How has digital technology change the competitive landscape?

We know that digital technology has already changed the landscape in the following ways:

1)       Barriers to entry have declined across most industries

2)      Traditional competition represents the tip of the spear; new competitors, using new

technology, can literally turn an industry upside down. Consider Amazon and retail.

3)      Mobile devices, once a novelty, are now the norm.  More people access the internet with mobile devices than PCs today.

The right question isn’t - how can we use this new technology?

There are literally thousands of new technologies that can be used in today's business world.

The correct question is – how can technology be use to make our company more efficient?

Or, how can this technology be used by us to allow us to generate new revenue in our existing market

OR a new market?

OR how does this or increase speed to service or increase customer service for our company?

OR how does this position us for doing one of these things in the future?

If  you don't have an answer to one of these questions, then it may be an interesting technology, but not one you should focus on today.

Like it or not, more companies fail on the technology front by focusing on too much, rather than on a doing a few things extremely well.

"People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying no to 1,000 things." 

(Apple Worldwide Developers' Conference, 1997)

Steve Jobs   

Some Questions to ask:

·         Who are our current competitors?

·         How does our current technology stack up against them?

·         Are we as good as them, better than them, or worse than them?

·         Are we growing, stagnate or losing customers  to them? Why?

·         Who are emerging competitors?  And why?

·         What are they doing differently than us?

·         What new capabilities do they bring to the table?

·         What are their strengths versus ours?

·         Who are our future potential competitors?

·         Who could be our competitors in a few years?

·         What will allow them to play in our market?

·         How is technology helping us win against traditional and new competitors?

·         What does the new technology allow us to do that we could never do before, or do better than ever before?

·         What can someone else do that we can do because of technology?

·         Are we missing opportunities to expand our marketplace, keep our customers, or expand our customer base?

·         Could we use our technology to provide new value to other customers that aren't using it and why?

·         Can we combine technologies to provide new value?

The Amazon Story

CASE STUDY NEW TECHNOLOGY AMAZON: Predictive Analytics

Predictive Analytics is one of the hottest topics in marketing today. But the concept isn't new. It started in 1956.

Every credit card and mortgage application process uses it as part of FICO Credit Score to determine the default risk.

Amazon took this "old concept" and sometime in the late 1990s, and applied it to retail.  Combining predicative analytics with e commerce,  Amazon created recommended product purchases for its customers.

At its basics, it takes what a customer has bought in the past, what they have in their cart, items that they have rated and liked, and what other similar customers have rated and liked.  It then makes recommendations for additional sales.

Amazon calls this homegrown math "item-to-item collaborative filtering," and it's used this algorithm to heavily customize the browsing experience for returning customers.

In 2012, Amazon's  reported a 29% sales increase to $12.83 billion during its second fiscal quarter, up from $9.9 billion during the same time last year.

The company remains tight-lipped about how effective recommendations are. ("Our mission is to delight our customers by allowing them to serendipitously discover great products," an Amazon spokesperson told Fortune. "We believe this happens every single day and that's our biggest metric of success.")

The results - the fastest growing retail business in the world.

Forbes, Sept, 2012

Forbes, Sept, 2012