New Harvard Business Review survey findings showed that early adoption of new technologies can lead to better business outcomes, including higher revenue growth and market position than their peers.
The study, called "The digital dividend -- first mover advantage" was conducted by Harvard Business Review Analytic Services, and was sponsored by Verizon Enterprise Solutions. It surveyed 672 business and technology leaders worldwide to study the transformative impact of what HBR Analytic Services calls the big five technologies -- mobile, social, cloud computing, advanced analytics and machine to machine (M2M) communications.
The study defined three attitudes towards technology adoption: IT Pioneers (34% of those surveyed); Followers (35%) and Cautious (30%).
IT "Pioneers," who pursue "first-mover advantage," are companies that believe strongly in the benefits of adopting new technologies." These companies are said to be more likely to lead in both revenue growth and market position than their peers. As such, 20% of IT Pioneers experienced more than 30% revenue growth -- more than twice the growth experienced by companies identified as technology "Followers" (those that watch and invest once benefits are proven).
The next group, called the "Followers," are said to experience three times the growth of "Cautious" technology adopters (those that wait until a technology is well-established).
"This study shows that technology is a key enabler of business growth," said Tony Recine, chief marketing officer of Verizon Enterprise Solutions. Hence organizations need to constantly innovate to stay ahead of the curve.
The value of these big 5 technologies "lies not in what they can achieve on their own, but in their combined power as a holistic solution," said the HBR-Analytic Services research.
Of all the respondents, 57% viewed IT as an investment that drives innovation and growth. Of all the IT Pioneers, 54% identified technology as leading to a significant change to their business models, with 52% seeing it as leading to a significant change in the products and services they sell. By contrast, just 29% of all the Followers and 10% of all those in the Cautious category saw technology leading to changes in business models.
There have been significant levels of technology adoption. For example, 73% have adopted some form of cloud computing, 61% have extensively adopted mobility, 83% deployed used social media and collaboration tools for business, and 20% have been using M2M extensively.
But there are also obstacles to adopting new technologies. According to the survey, 34% of the respondents saying legacy technologies get in the way of innovation, and 44% saying they need more cultural flexibility to adapt and take advantage of new technologies to drive new ways of doing business.
The research shows that interdepartmental collaboration is critical and that segregating IT from business operations or operating in functional silos can be a significant disadvantage to a business. On the positive side, an increasing number of people state that they are now involved in technology decisions -- 25% the survey's respondents saw themselves as "very involved," while 48% thought they were "somewhat involved." Of these, 42% were defined as executive leaders; 30% as senior managers and 14% as other managers. Less than 10% of survey respondents worked in IT functions, demonstrating that IT is now becoming firmly integrated in the overall business ecosystem.
"New technologies can provide a genuine competitive edge, but the organization has to make the commitment to use technology to build new processes and business models," said Angelia Herrin, research and special projects editor of Harvard Business Review. "Companies need to become more flexible in terms of technology implementation and make innovation part of their culture in order to realize the real business value."
Geographical and vertical variations
The study also showed variations of new technology adoption across verticals and geographies. For example, despite being heavy technology users, financial service organizations are more likely to be Followers and risk-averse due to a combination of strict industry regulations and sensitivity toward the management of financial data.
But varied industries still saw significant benefit from new technology adoption. For example:
- Financial services: Sixty-six percent of the respondents said changing customer expectations are the primary driver behind the technology transformation in this sector, and 78% reported experiencing improved customer responsive as a result of new technologies.
- Public sector: Sixty-four percent of respondents saw IT as an investment driving innovation, although just 18% said their organizations looked to get first-mover advantage, compared with the survey average of 34%. Asked what would be needed to drive greater adoption, the respondents identified the need for better cultural flexibility (51%) and the ability to envision a new way of doing things (46%). Sixty-eight percent said the adoption of new technologies would result in increased responsiveness to customers.
- Technology firms: Sixty-two percent believe in the first- mover advantage, with 30% of the respondents stating that technology had significantly increased their competitive differentiation, compared with the survey average of 15%.
- Business services/consultancies: Forty-five percent believe strongly in the benefits of new technology in seeking first-mover advantage (compared with the survey average of 34%). New technologies enabled 71% of the respondents to change their core business strategy over the past three years, and 49% saw advanced analytics as boosting product development.
- Manufacturing: This sector is restrained in adopting new technologies compared with other verticals, as a result of industry consolidation. Thirty-nine% of the companies call themselves cautious, compared with 26% that call themselves first movers. Achieving customer expectations is the main driver, with 74% identifying improved responsiveness as a result of adopting new technologies.
- Healthcare organizations: While healthcare providers tend to delay adoption of new technologies until proven, 90% found that technology had changed their products and services; and 72% used cloud computing. (out of 74 survey respondents)
- Energy & Utilities: Forty-three percent of industry respondents said they believed in the benefits of technology and aim to obtain first-mover advantage in adopting it. On the effects new technologies have on business, 67% of the respondents saw improved customer responsiveness and 72% reported a positive improvement on internal collaboration. (out of 61 survey respondents)
Growth markets such as Latin America, the Middle East and Africa are largely classified as Pioneers. Established markets such as Asia, Europe and North America, are more likely to have to overcome the challenges of working with aging legacy technologies. However, Asian companies have seen the most significant change in product development (41%) thanks to overall technology adoption, compared with Europe (28%) and North America and the rest of the world (30%).