Harvard Biz Survey Touts IT ‘Pioneers’
A new report by the august Harvard Business Review and its corporate sponsor Verizon sings the praises of early adoption of technologies like cloud computing as the quickest path to business success.
More than half (57 percent) of 672 business and technology leaders surveyed by HBR's Analytic Services unit said they viewed IT as an investment that drives growth and innovation. Early adopters (54 percent) of technologies like cloud computing said they have seen "significant change to their business models."
The "first-mover advantage," a notion the author's highlight in the title of their "Digital Dividend" report, has frequently been seen as a high-risk, high-payoff business strategy. Fledgling semiconductor companies like Intel Corp. essentially built their brands on being first to market with high-volume commodity chips. The Harvard analysts argued the same could be true for early adopters of cloud computing and other IT technologies that promise to make businesses more agile and therefore more competitive.
But the study finds that the weight of legacy technologies continued to prevent businesses (34 percent of survey respondents) from exercising their first-mover advantage. "Change can be disruptive—and hard. It requires an increased level of collaboration between IT and marketing, operations, engineering," the report stresses.
"The main reason given for not adopting new technologies was cultural resistance to change within the respondent’s organization. While legacy technology is an inhibitor for many established companies, entrenched ideas about how the organization works—legacy culture—can be just as limiting," the authors added.
Hence, 35 percent of respondents identified themselves as "followers" who "watch and invest once the benefits are proven." The remaining 31 percent of respondents were either "cautious" preferring instead to wait for technologies to mature, or had no opinion.
Waiting for the stable, next generation version of a product is of course the counterargument to the "first mover advantage." Given the pace of technological change, this approach still makes sense to many business management experts.
"For every academic study proving that first-mover advantages exist, there is a study proving they do not," observed two academics, Fernando Suarez and Gianvito Lanzolla. "We have found that the differences in outcome are not random – that first-mover status can confer advantages, but it does not do so categorically. Much depends on the circumstances in which it is sought."
The authors' skepticism – their article was titled, "The Half-Truth of First-Mover Advantage" – is particularly noteworthy given the fact that it was published in none other than the Harvard Business Review.
The current study instead focuses on the glass-half-full side of the equation. Asked what new technologies they were adopting, most cited mobile technologies that are driving report sponsor Verizon's stunning profits. Down the list after social media and advanced data analytics is cloud computing; 27 percent of respondents said they are rapidly adopting cloud computing while 46 percent categorized their cloud adoption rate as "moderate." Another 22 percent said they prefer look before taking the cloud leap.
"Cultural resistance to change" was cited most frequently as a reason for not adopting cloud technology followed by an aversion to risk.
The widespread perception that sensitive data – or racy photos – are exposed in the ether of the cloud, a perception that was only strengthened recently when celebrity accounts on Apple's iCloud were hacked, continues to fuel misgivings about cloud adoption.
They Harvard survey results indicate that many enterprises continue to take a wait-and-see posture until they are convinced that cloud security has been buttoned down.
"Even those who are using cloud are concerned about data security, with over half (53 percent) believing it weakens security," the report notes. Manufacturing (63 percent) and the public sectors (60 percent) expressed the most concern. Not surprisingly, IT administrators were least concerned about cloud security.
Early adopters of cloud technology "are as likely to be concerned about security as other businesses, but they don’t let that stop them," the report concludes. "Pioneers balance the risks and rewards and move forward anyway, factoring security in as part of their implementation."