Should you be an early IT adopter?
By Fawn Fitter
Some IT managers are first in line to check out the latest technology, while others wait to see how well new products work. Which approach makes the most sense for your business? Here are some pros and cons of changing information technology business processes by adopting the latest technology.
In Summary:
| • | Being an early adopter, and changing information technology business processes, allows you to benefit faster from new products, but exposes you to higher risk. |
| • | Being a "fast follower" protects your company from the consequences of relying on unproven technology, but it can limit your ability to compete. |
| • | Consider taking more IT risks for the sake of competitive advantage, although companies in conservative industries such as health care and manufacturing need to be more cautious. |
When recording studios, movie production houses, and television stations around the world need to improve the sound of their broadcasts and recordings, they call on Euphonix Inc. The 80-employee company, based in Palo Alto, Calif., is a leading maker of audio production equipment for the professional entertainment and broadcasting markets.
With an entirely digital product line and a network linking its headquarters to sales offices around the globe, Euphonix is as comfortable with technology as any of its Silicon Valley neighbors. Andy Izsak, director of information technology, says he has convinced business stakeholders of the value of being first in line for new information technology business processes, systems, and solutions. That is why Izsak offered to let Microsoft use Euphonix as a beta site for Microsoft Dynamics CRM 3.0.
"We were already using an earlier version of Microsoft CRM, and we were looking forward to the new features and usability enhancements of 3.0," Izsak explains. "It made sense to become a beta site so we could start training our users and implementing customizations as soon as possible."
As a result, Euphonix's worldwide sales staff can download and work with the latest customer data online and off, and management can capture more marketing, sales, and service information for more accurate real-time sales forecasts.
In addition to helping Euphonix serve its customers better, being an early adopter keeps executives aware of high-tech developments that could improve its products, Izsak says. Of course, he has experienced his share of bug-filled betas and products that did not work as expected, but he does not plan to change his strategy. "I have never had an experience so dreadful that I would never want to do it again," he says.
Do you want your IT shop to emulate Euphonix, aligning yourself with leading-edge technologies and the latest versions of products? Or would you prefer to let your competitors and peers take those risks while you watch and learn from their experiences? In some cases, companies adopt a mixed strategy of leading in some areas and following in others. Here are some pros and cons of either approach.
Why you may want to lead the IT pack
 | If the CIO wants to be leading edge but the users dislike change, you have to factor that into your decision. |  | | John Matterson
Tectura | |
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Midsize businesses can often afford to be bold about deploying new technology. After all, at smaller companies, even a minor IT investment can boost efficiency or customer service enough to leap ahead of the competition.
Mark Mattis, principal at Ascentium, a global business and technology consulting firm and Microsoft Gold Certified Partner based in Bellevue, Wash., describes the advantages companies can realize by being an early adopter:
| • | Receiving personalized vendor attention. For example, Microsoft gives select early adopters direct access to product development teams for customized support in exchange for feedback on product performance. |
| • | Influencing design and performance, which makes the final product a better value. |
| • | Training employees and seeing benefits from the new technology sooner, which can provide a competitive edge. |
What's more, taking risks can make your IT staff stronger. A reputation for using cutting-edge technology will help you attract and retain employees eager to innovate and learn new skills, notes John Matterson, executive vice president of Tectura, a global infrastructure and integration consulting firm and Microsoft Gold Certified Partner based in Redwood City, Calif.
However, being an IT leader can be risky, with "vaporware" that promises more than the finished product can actually deliver, and beta versions that are still full of bugs.
Innovators also need the financial resources and the appropriate corporate culture to support taking risks—and to recover from them if they don't work out. Midsize companies may lack the manpower to run a beta program, collect feedback and build user support while simultaneously focusing on the daily tasks of running the company, Matterson warns.
Mattis often advises clients not to purchase new software until the first service pack is released, an indication that the most obvious first-release problems have been resolved.
When it makes sense to be a fast follower
If your company is in a generally conservative industry such as financial services, health care or government, you have to consider the ramifications on customers and reputation.
Mattis speaks of one client, a hospital, which purchased the first release of an application for managing medical data. The software needed so many patches that on one day the hospital had to shut down its emergency room for several hours. If the worst-case scenario carries such high risks for your business, let other companies gamble with new technology first, Matterson advises.
There are other benefits to being a fast follower:
| • | The product or technology has been proven in the marketplace. |
| • | A mature product has a known timeline for implementation that will not be delayed by unexpected changes. |
| • | Your company can upgrade incrementally, which lowers both deployment and training costs while safeguarding legacy data. |
Yet caution has its dangers if you fall so far behind you become a laggard. Not only do you lose the competitive advantage, your IT department may get stuck in a rut of maintaining expensive legacy systems. When you finally decide to upgrade, you may have to leapfrog over several previous versions of a product. This might entail spending resources on consulting to help you with what might be a difficult and lengthy migration plan.
A few tips on making the decision to lead or follow
Regardless of your own preferences for leading or following, you must make a business case to show senior management how your plan meets overall strategic requirements. "If the CIO wants to be leading edge but the users dislike change, you have to factor that into your decision," Matterson says.
To make your case for becoming more of an IT leader, Mattis suggests presenting a risk management plan. It should include proof of concept, metrics for success, incentives for vendors to respond promptly to problems, and a pilot program that introduces the new technology in parallel with existing systems so your business does not fail if the new product does.
Finally, Mattis emphasizes, remember to educate people well before launching products. "People get excited about new technology," he notes. "So it is important to keep their expectations tied to business requirements and what the software can actually do."
Fawn Fitter is a freelance writer in San Francisco, specializing in business and technology. She has written for publications including Fortune Small Business, Worthwhile and Knowledge Management.
