IS3320 Developing and Using Management Information SystemsLecture 11: Introducing Innovations in MIS Design Rob Gleasure

R.Gleasure@ucc.iewww.robgleasure.com

IS3320

Today’s lecture The technology adoption lifecycle Crossing the chasm

The Technology Adoption Lifecycle In 1963 Everett Rogers divided consumers of new grain types into

five groups according to their risk aversion

1. Innovators Highly risk-tolerant, hence the first to adopt new innovations Tend to be young and from wealthy backgrounds Often very social and usually maintain close relationships with

sources of invention2. Early Adopters

Adopt innovations as soon as they are convinced they will eventually be useful

Tend to be young, educated and well thought of amongst others

The Technology Adoption Lifecycle3. Early Majority

Adopt innovation once convinced it is immediately useful Some limited contact with Early Adopters Tend to be reasonably well thought of, although not influential

4. Late Majority Only adopt an innovation once it has become the norm Not usually wealthy or at all socially influential Very little contact with Innovators

5. Laggards Will only adopt innovations once they have to Tend to be older and possess opinions perceived to be of limited

value Little contact with any other group

The Technology Adoption Lifecycle

The product life cycle

The distribution of consumers

Adopting Technological Innovations Geoffrey Moore brought these ideas forward for innovations in high-

tech Industries

Innovators: Technology Enthusiasts Early Adopters: Visionaries Early Majority: Pragmatists Late Majority: Conservatives Laggards: Sceptics

Adopting Technological Innovations Technology Enthusiasts

Gadget-loving ‘techies’ Don’t have a lot of money themselves, but what they do have is a

lot of weight of opinion as regards future infrastructure investments in organizations

Techies are the first people targeted to open up new markets

Visionaries Seeking the benefits, not the technology necessarily, i.e. no

‘gadgets for gadgets sake’ Love the idea of a ‘shake up’ Tend to have the money/access to money to make things happen Take stock of recommendations made by techies

Adopting Technological Innovations Pragmatists:

No real interest in technology, just want to ‘keep up’ Look for results-based proof of the effectiveness of technologies,

hence will usually buy from most established sellers Often manage business functions in which failure is devastating

Conservatives Will only buy when the price has fallen enough to make

investment almost impossible to backfire Looking for simple systems that work

Sceptics Hyper critical non-consumers in the current market conditions

The ‘Chasm’ Techies and visionaries tend to be in frequent contact Recommendations between them are reasonably effective

Pragmatists need references more than anyone to become convinced but don’t really value the opinions of techies and visionaries

Introducing New Innovations

The Early Market

Techies are generally won over by new technological capabilities The more a concept is differentiated, the more exciting it becomes They enjoy figuring the new tech out, hence transparency and

support are key

Visionaries are generally won over by new business capabilities The potential implications of the concept are what excites this

group Visionaries like to feel like they have an ability to shape the

coming industry

For both groups, being insiders/on the cutting edge is important

Crossing the Chasm

So how do we get the pragmatists to start consuming our innovation? They won’t buy from you until you are established, yet you can’t

get established until one of them buys from you

Pragmatists want a complete, reliable solution to a problem Most cutting-edge companies are not set up to make this happen

Crossing the Chasm

Moore argues that to ‘cross the chasm’, companies must go to the ‘bowling alley’

Instead of trying to move the whole herd at once, try to move smaller herds

Identify a vertical (niche) market where a broken ‘mission-critical’ business process is a serious concern to management

Get the product to this customer segment as quickly as possible, rapidly ironing out any problems that emerge so that a whole solution is provided, not just the technological innovation

Crossing the Chasm

Dominate that niche! Become the obvious number 1 and saturate that community until the problem is completely solved

Once this community is satisfied, use them as a reference to expand into neighbouring or related pragmatic markets

Crossing the Chasm

After the bowling alley comes the ‘tornado’, when the mass-market become the target

This is where growth explodes and competition expands

This is still driven by pragmatists but now they are no longer pragmatists with whom you are closely tied

Here it is about simplifying the product and lowering costs to allow you to compete on price

The Lifecycle Post-Chasm

Image from http://www.chasminstitute.com

Exercise You have decided to go ahead with the idea for a Blackboard competitor

What strategy could you apply to get it up and running?

Whom could you consider as partners in this strategy?

What problem of theirs could you solve?

Want to read more? Everett, R.M. 2003. Diffusion of innovations (5th ed), Free Press, NY.

Moore, G. 2002. Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers (Revised ed), HarperBusiness, NY.