Indeed, there is such a thing as being too early--a reality that information technology buyers know all too well. Technology paradigms often don't shift as fast as the marketing literature forecasts, leaving customers with dead-end or prestandard products. Marked improvements in usability and manageability are more than offset by shortcomings in security, scalability and support. New technology developers burn through their cash and melt away under bankruptcy protection. First movers often wish they had stayed put.
So is implementing leading-edge technology always a bad idea? Of course not, but much depends on the size of your company, the maturity of its IT infrastructure, the breadth of alternative products, and the stability of the vendors.
It wouldn't pay for Wal-Mart to tear out a dependable EDI infrastructure for the promised benefits of a Web services architecture. Wal-Mart's huge EDI infrastructure represents millions of dollars in investment and touches thousands of applications, suppliers and revenue streams. Replacing it would uproot a $100 billion value chain.
But for smaller, hungrier companies with more to gain (and less to lose), embracing unproven technologies may make more sense. For instance, $100 million health-club operator Life Time Fitness was able to tap Web services for the portal it uses to manage memberships because the technology represented an incremental upgrade that promised exponential efficiency and productivity improvements.
That's not to suggest that big companies should stay away from emerging technologies altogether. But they're more likely to test the waters for niche systems not available off the shelf. FedEx will try innovative technology for scanning, tracking and other specialized needs. But when it came to migrating the company's global client-server computing environment to network computers, FedEx got cold feet. Despite their TCO advantages, NCs were just too new a platform.
Merrill Lynch goes so far as to take equity stakes in companies with promising products to gain a say in the development of key systems it doesn't want to build from scratch--and to ensure that those start-ups will still be around in a year or two.
While Dow Chemical rarely jumps on the latest technology innovations, it does keep an eye out for major IT shifts. Dow was among the first Fortune 500 companies to move to a global, integrated voice, data and video network to support collaborative projects, and it was an early adopter of Siebel sales automation software. Yet for all its aggressiveness rolling out a standard ERP system, Dow still favors the mainframe-based SAP R/2 rather than R/3. Likewise, Dow has been aggressive in rolling out Windows NT Server instead of Unix, but it still relies heavily on DMS for older applications. And for all its participation in Internet marketplaces, Dow still does more than 90 percent of its purchasing using EDI.
In an interview some time ago, Dow CIO David Kepler explained his philosophy to me: "We seldom sit in the middle of the deployment curve. We try to lag and squeeze the most out of legacy technology or apply the latest technology when we see great new value--and blend those two things together. So you'll see what looks like a paradox here."
But don't confuse that "paradox" with indecision. Once Dow commits to a new technology, "we have to roll it out rapidly across the company," Kepler said, "or we start to disenfranchise people who share information."
Outstanding companies become technology pioneers only after they've established superior business cultures and models, argues management consultant Jim Collins in a recent issue of Newsweek. That is, leading-edge technology enhances these advantages; it doesn't create them.
Fair enough. The likes of Wal-Mart and FedEx are known as technology first movers in wireless inventory management and online package tracking, but it's ludicrous to imagine they'd be where they are today if not for their unique cultures driving rock-solid business models. In the end, even the most judicious early adopters of information technology will go nowhere unless their business houses are in order.
-- Rob Preston, rpreston@cmp.com
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