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IT Computer Support Services - Other

What are emerging technologies and why are they important in IT?

Emerging technologies are defined as those technologies that are readily available for implementation in organizations’ settings as soon as they leave Vendor’s Research and Development labs. The development and acceptance rate of the new technological solutions are not always known, which lists them in the high-risk category for investments. As with every product, technologies have a predefined life circle which helps assess their performances and potentials. There are four stages in technological development, and emerging technologies represents the first phase in this process. This phase is considered an innovation phase which means that the product is undergoing a development phase, especially regarding capability and capacity. Simultaneously, this is the phase when it is still unknown how the product would behave, how useful, practical or profitable it would be, and would it provide a viable substitute for the product it aims to replace or compete with. Because long-term consequences and the market potential are rarely known, the acceptance rates at this stage are low.

In the event that the implementation of the new technology is delayed, there is great risk for a significant decline in the company’s total return. To benefit from early adaptation and to avoid or minimize potential risks, two or more early adopter companies, also known as innovators, can join together to create strategic alliances. These alliances utilize the benefits of the new product before larger markets recognize its potential. Companies need to be aware of the emerging technologies, primarily in the IT sector, because it is experiencing the most rapid change.

What is disruptive innovation?

In 1995, Clayton Christensen presented the concept of disruptive innovation, which instantly became very popular among small businesses. According to Christensen, disruption is a process in which a small business or a company with a limited number of resources available manages to successfully challenge already established incumbent businesses. Because this is a process, it takes time until an innovative business solution takes over the market share. There is a recognizable pattern of corporate behaviour that leads to this. Large companies tend to focus on sustaining a well-established innovation by continually upgrading their features and services to satisfy the needs of high-paying customers. As big corporations start to neglect the interests of regular customers, they tend to start searching for low-cost alternatives. These alternatives are usually provided by small or medium size businesses that see opportunities in creating new products which become known as “the disruptive innovation.” Even though these new products are, in their essence, basic versions of their predecessors, they still integrate innovative features such as new options or new interfaces.

Despite the risk of underperformance and lower quality, the disruptive innovation may be more useful to new customers. More user-friendly interfaces attract both new and existing customers. The rise in popularity creates new opportunities for the disruptor to focus better on advancing the primary functions of its products, thus slowly creating a fully operational substitute for its predecessor. As this happens, the original large corporation remains focused on satisfying the needs of their large-scale customers. By the time they start to notice the decrease in the number of users, the disrupter’s market share has already significantly increased. To stay in the market, big companies can launch their own disruptive innovations. To be successful, however, these efforts should be treated as separate projects which do not have the same development strategies and goals as for the original product. Instead, disruptive innovation models tend to move from the low end of the market towards mainstream and high end of the markets.

How can an Emerging Technology become Disruptive?

To understand how an emerging technology becomes a disruptive innovation it is essential to understand the product development phases. After the successful completion of the first phase- emerging technology, a product moves to the second phase known as pacing. This is the time when the new technology starts to become more accepted by multiple users and organizations. If the evaluation tests prove to be positive, the development of the program starts moving towards the third phase. This phase is known as key technology and is the time when a solution can prove to be more successful than its competitors. Following the wide acceptance, a new solution enters the fourth and final stage called base technology where it becomes a preferred technological solution for an organization. If the emerging technology was conceptualized as a replacement of a certain product and if it successfully undergoes all development phases, it becomes a disruptive innovation.

  

References

Christensen, C. (2015). DISRUPTIVE INNOVATION IS A STRATEGY, NOT JUST THE TECHNOLOGY. Business Today, 23(26), 150-158.

Christensen, C. M., RAYNOR, M., & MCDONALD, R. (2015). WHAT IS DISRUPTIVE INNOVATION?. Harvard Business Review, 93(12), 44-53.

Luftman, J. N. (2009). Managing information technology resources: Leadership in the information age. N.J.: Publisher not identified.

Schmidt, G. M., & Druehl, C. T. (2008). When Is a Disruptive Innovation Disruptive? Journal of Product Innovation Management, 25(4), 347-369. doi:10.1111/j.1540-5885.2008.00306.x

 

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