Digital transformation: Is it worth being an early technology adopter?

Time and again, managers from medium-sized companies ask me: Should I introduce [insert any new technology here] in my company or use it in my processes? I am usually unable to give a clear answer to this question. Basically, however, I am of the opinion that it is usually not worthwhile from a business perspective to be a real early technology adopter. Read why in the following post.

(Reading time: 3 minutes – English version here)

A flood of new technological possibilities

A lot of new technology is available. Convincing, mature technologies as well as those that are only just emerging and are still in their infancy. Much of it can be used in companies, sometimes at immense cost, but sometimes at surprisingly low prices. If you have employees who are curious and willing to change, which I very much hope you do, then you will probably be approached with ideas from this area from time to time. How do you decide whether to pursue a technology and use it for your business? Do you check whether the competition is doing the same?

Do you simply incorporate everything new, regardless of whether you see potential in it? Do you wait until there is no other option but to use the technology? I don’t think either of these approaches is a good approach. If you look at how digital transformation works, it’s obvious: you should use the new technology when your customers are ready to adopt it.

Use a new technology for your business when more than 50% of your customers have already adopted it. Not when the technology is available.

Being an early bird is courageous. It’s a pioneering spirit and I personally find it extremely exciting. From an entrepreneurial point of view, however, it is risky and rarely pays off. The majority of new technologies are by no means adopted by customers. It is rather a relatively small proportion that is used by society in the way originally intended.

Examples

A good example of this effect can be found at Apple, albeit on a large scale. Contrary to popular belief, Apple did not invent the digital music player(IXI, 1979), the smartphone(IBM, 1992) or the tablet PC(Dynabook, 1970 and Microsoft, 2001), let alone develop the basic technology for them. In fact, these products all existed several years earlier and the technology for most of them had been around for decades. However, Apple had exactly the right timing by adapting to their (potential) customers’ behavior and developing a product that met/meets the customers’ needs and not a product that exploits all technical possibilities.

The right timing is therefore crucial. This is not a matter of entrepreneurial instinct, but results from ongoing dialog with the customer. From my previous posts, you know that I consider ongoing dialog with customers to be a key element in mastering the digital transformation.

When is the time ripe?

In this sense, your customers will simply tell you when the time is right. All you have to do is listen. Customers do this by showing you an (early adopter) competitor, for example, who has already implemented something technologically innovative. This may hurt at first, but don’t make a mistake: this early adopter has already invested huge sums and is operating in a market that is not yet mature. However, you can relatively easily build on existing best practices and develop the model further without these upfront investments. You just have to make sure you don’t oversleep it.