• Strategy
  • CFO IT

The Fine Art of NIT-picking

Technological innovations abound. Which ones are right for your company?

Twice in this issue, we mention Moore’s Law, the well-known dictum that computer chips will double in power and halve in price every 18 months. Not only does the law pithily capture the essence of the digital innovation that has shaped society for several decades, it is that rarest of things: a prediction about technology that has actually come true.

Despite the forward-looking nature of this special issue, we’ve largely eschewed specific predictions, influenced in part by some of the historic howlers compiled in the 1984 book The Experts Speak:

  • 1878: Erasmus Wilson of Oxford University predicts that the electric light, on display at the Paris Exhibition, will be forgotten as soon as the exhibition closes.
  • 1943: IBM’s Thomas Watson says he believes there is a global market for perhaps five computers.
  • 1977: Digital Equipment Corp. founder Ken Olsen states categorically that “there is no reason for any individual to have a computer in their home.”

Predictions of limitless free energy and atomic-powered cars have also missed the mark by considerable margins. More recently, any newspaper or magazine published circa 1999 was certain to contain a glowing profile of an Internet company that today no longer exists, pledging to dominate a market that never existed.

And yet corporate success hinges on correctly anticipating the future. Why else is there no escape from the word proactive? While it’s not easy to place bets on new technologies, to wait too long is to risk losing substantial ground to more-astute competitors.

Writing in the summer issue of the Sloan Management Review,,] three European experts—consultants Angela Andal-Ancion and Phillip A. Cartwright and professor George S. Yip of the London Business School—offer a potentially useful framework for evaluating new information technology (NIT). They suggest that by evaluating 10 key drivers of a given NIT (ranging from “information intensity” to customizability) and assessing their usefulness to one of three potential “mediation strategies” (cutting out middlemen, or “disintermediation”; forging closer ties with business partners, or “remediation”; and creating a more sophisticated web of opportunities between customers and vendors, dubbed “network-based mediation”), companies can pick their NITs more accurately, because they understand the purposes to which new technologies will be put.

The authors are quick to say that even a well-informed choice is just the beginning; implementing one of the three mediation strategies they describe almost always entails substantial change and restructuring. But with so many new technologies marketed as applicable to any number of business problems, evaluating the latest alleged cure-all with a mediation strategy—or any strategy, for that matter—in mind can help companies decide which NITs are for naught.

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