Crafting IT innovation strategies for real-world value

Another DC Water innovation is an event management system that integrates in a single dashboard SCADA data, inbound calls, work orders, USGS data, rain-level gauge, and other IoT inputs from sensors tracking water pressure, flow, and level. The system also tracks personnel and vehicles via GPS to dispatch repair staff to the highest priority trouble spots quickly.

“The dispatch system integrates IT and OT in a single dashboard. Now we can manage emergencies more effectively. In the past, if we got 20 calls about one problem, there might be 20 work orders. Now those calls are consolidated into one work order,” he says.  

The art of selection

Ty Tastepe, senior vice president and CIO of Cedar Fair Entertainment Company, an operator of 13 amusement parks and resorts in the US and Canada, says his company tends to be in the “fast-follower” category, a space that’s generally recognized to sit somewhere between early-adopter and early-majority groupings.

“We look at technology implementations not only in our own industry but also in adjacent industries like retail and food services,” Tastepe says. He adds, “If there were no proven technology, we would entertain being an early adopter or try to pilot something new to address a business challenge.”  

“The good ideas are plentiful — the challenge is to identify the must dos, and whether a project fits within budget and resource constraints,” says the CIO. Because Cedar Fair is a public company, Tastepe thinks in terms of delivering results. He says new technologies must answer yes to at least one of three questions: Does it generate revenue? Does it improve efficiency? Does it satisfy compliance requirements?

“There will always be budgeting constraints; that’s why due diligence up front is important. We do a discovery process. Once the business sponsor puts together a charter for an initiative that can be enabled by a technology implementation, we discuss the merits of the initiative at the portfolio management committee,” he says. The next step is to flesh out the business model and the costs, sometimes with the assistance of a partner. “If we decide to move forward with the project, we might do a proof of concept before we deploy at scale,” he adds.

Gartner’s Burke agrees with Tastepe that winnowing down the field of technologies to a few plausible candidates is essential. “When you’re scouting new technologies it’s a bit of an art as well as a science,” says the analyst. Typically, organizations scan several hundred technologies, a number that must be reduced to a couple dozen for serious study, Burke says.

Knowing when to pull the plug

One company that is widely recognized to be in the innovator category is Amazon.com,

which willingly invests in technology-heavy concepts such as Amazon Go, a convenience story with no checkout. Although Amazon has built a couple dozen such stores, the giant retailer recently announced the closure of several. In addition to reining in Go stores, Amazon.com has reportedly curtailed its drone delivery initiative. While such explorations and reversals are more than most companies can risk, they underscore the importance of continually evaluating pilots to ensure there is enough warranted value in going forward with the concept.

“In Amazon’s case, they are very good at testing technology and then abandoning it if it doesn’t work,” says Ananda Chakravarty, vice president of research for retail merchandising and marketing at IDC. One reason for the Go retrenchment, according to the analyst, is that the cost of cameras dropped significantly, making them a better technology choice than the sensors that Go implemented to track inventory on shelves.

Even so, according to Chakravarty, behemoths like Amazon and Walmart, which has also experimented with Scan-and-Go checkouts and delivery drones, can afford the luxury of trying — and learning from — things that others cannot.

“There’s some real value-added to a test-and-learn approach,” says the analyst. For example, he explains, Amazon.com initially planned to sell Go technology to other retailers, and when that didn’t pan out, the company decided to target Go to niche markets such as airports, stadiums, and transportation venues, where consumers place the highest value on the convenience of a frictionless experience.

Checks and balances

Rajiv Garg, associate professor of information systems and operations management at Emory University, says putting together a diverse team to evaluate new technologies is an essential step. The group should encompass multiple corporate departments and a variety of demographics. “You might need a millennial on your team to ask how your organization is impacting the environment and society,” he suggests. Once the team is complete, he advises, turn them loose to explore.

“Send them to conferences, buy them VR headsets. If the team doesn’t like one technology, that’s fine because they might find something else they like,” says the professor. Generative AI has reached a point at which it demands to be evaluated, according to Garg. “ChatGPT and DALL-E are going to be embedded in our work somehow. You need to engage employees and use them in your workplace,” he says.

Too often, says Gartner’s Burke, the excitement of working with new technologies causes organizations to jump the gun, failing to perform due diligence ahead of time.

“Companies that have assessed a tech opportunity before they launch a proof of concept are a small minority of companies. In contrast, most organizations identify a nifty technology and then rush into a pilot without having done the easier thing — to determine whether it will actually help them in some way,” says Burke.

Even if most organizations could benefit from more careful up-front analysis, gaining an edge in the market ultimately depends on the willingness to give new technologies a try.

“We like taking a lot of swings. The more swings you take, the higher the probability that one of them will hit something translating into competitive advantage,” says Dirks.