4 perils of being an IT pioneer

The speed at which enterprises adopt emerging technology is widely acknowledged as a key driver of success. As a result, organizations often rush to adopt new technology believing it will make them operationally more efficient and enhance their competitiveness. Proponents of early technology adoption further argue that it enables companies to build informal relationships with leading technology providers, develop deeper understanding of the latest technologies, and lure better talent.

But there are also certain inherent risks associated with this. In their quest to become early adopters of a new technology, organizations may throw caution to the wind resulting in disastrous consequences. Here are four major setbacks that business and IT leaders could encounter if they rush to adopt a new technology without due diligence.      

Lack of support

Finding resources who are skilled with a new technology can be a challenge. For instance, there is still a significant skill shortage in relatively new technologies such as AI. This skills gap is conspicuous at both ends — at the technology provider and at the enterprise where the technology is being implemented. The absence of desired skilled resources can cause serious roadblocks in the successful implementation of a new technology.

A senior IT leader from a bank confronted this challenge while working with a fintech provider. “We were building a solution through which a third party could open current accounts on our bank’s behalf. At that time, enterprise service bus was the preferred technology for connecting digital services. We decided to leverage API, which was then an emerging technology. The solution’s proof-of-concept was successful, and the solution went live. The business folks went all out as they wanted to get the maximum out of the solution. Unfortunately, we didn’t get the desired support from the vendor on the production side and the implementation failed,” he says, on condition of anonymity.

For the technology leader from the bank, it served as a valuable lesson. “From then on, I always ensure there is an explicit agreement, with respect to annual maintenance contract and support team, with the vendor in writing. I tell them that there is money lying on the table provided they sign the agreement,” he says.

Although time consuming, upskilling in-house resources on the new technology can also prevent an IT leader from finding themselves in such a situation.

 Cost escalations

Working with any new technology can result in unexpected surprises. As the technology may not be perfected, there could be challenges that aren’t visible upfront, cost overruns being one of them.

ICICI Home Finance’s Leader of Technology Kunal Dikshit ran into this issue when he decided to build a new technology solution in-house from scratch.

“When I was leading the team in the capital market space, we invested in building in-house technology to ensure that our customers faced very low latency while doing trades. We aimed at achieving this using new and inexpensive open-source technology while building our proprietary algorithms on top of it. During development, we realized that the time-to-market increased due to the numerous bugs and issues we had to face. This also led to cost escalations, and ultimately we had to call off the project,” he says.

There is a high risk of failure when one deals in a new technology. It can lead to wastage of a lot of time and money and even loss of trust of business leaders and resistance to change for anything new. As Dikshit says, “Unless one has deep pockets it would be curtains for the project. The company needs to have the innovation culture and appetite to invest money in the new technology.”

Resistance to change

An enterprise-wide IT project is deemed successful only when a team member at the lowest level of the hierarchy adopts it. Ensuring adoption of any new solution is always a challenge. More so a solution based on a new technology. There’s push back from end users because they find the idea of losing power or skills in the face of new technology disconcerting. For any IT leader, crossing this mental inertia is always among the toughest challenges. Moreover, IT leaders have seen many initiatives based on new technologies fail because there was no buy-in from the company’s top leadership.

Even if users adopt the new technology, the initially learning curve is often steep, impacting productivity. Most organizations can’t afford or aren’t ready to accept the temporary revenue loss due to the disruption caused by the new technology.

Therefore, business and IT leaders must have a clear understanding of the risk/reward principle when rolling out new tech. Buy-in from top management as a top-down mandate can make adoption of new technology easier. But concurrent approaches must also be undertaken to allay any fears of retrenchment among end users due to the introduction of the new technology. Here, building awareness around the benefits of the initiative across the organization is crucial.

Introduction of unforeseen risks

There are lots of enterprises that want to be early adopters of an emerging technology just for the simple reason that it’s new. While leading-edge technology may look compelling, not all will be useful or have the right fit for all companies across verticals.

Rushing to be the pioneer in adopting a new technology can not only lead to rash spending of money but also lead to more losses than gains when it fails to seamlessly connect with the existing infrastructure or introduces new and unforeseen risks.

Enterprise technology leaders should thoroughly research the impact of any new technology on their organizations’ people, processes, and technical infrastructures before procuring it. A proper study and identification of the new technology’s use case is a must. Adoption of the technology should resolve a major challenge that the business is facing. IT leaders must also focus on functionality, else one can miss out on associated ecosystem impacts such as new stresses on cybersecurity, thus leading to dangerous consequences.