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The Advantages of Working Dangerously (Page 4)Keep an Eye on Risk"The number you have dialed has been disconnected or is no longer in service." The ultimate nightmare scenario for any early adopter is a vendor that goes belly-up. And given that most startup businesses fail, it is a real risk. But properly prepared mitigation efforts can help companies avoid or recover from a bevy of unfortunate incidents, even the complete collapse of the vendor. TECH EVALUATIONThe first step toward mitigating the potentially debilitating effects of early adoption is to establish a sound process for identifying new technologies worth using. In some cases, that involves a full-blown advanced-tech unit charged with testing new technologies in an R&D setting. But such setups can cost big bucks-and thus few companies even want to consider the option. But there are ways to keep track of technological advancements without adding a new wing to your IT department. Bill McCreary, vice president, CIO and operating excellence for Pilkington North America, says the company uses a three-stage process to monitor technologies it may one day adopt. All IT employees are encouraged to keep an eye out for new technology opportunities as part of their jobs. Once a new technology matures a bit (meaning it hasn't "just shown up in the newspapers," says McCreary), it can go on the radar screen, which is stage one. Then someone will be charged with tracking its progress and developing a working understanding. Technology can stay in this stage indefinitely if Pilkington's technology evaluation committee feels it is still interesting but not ready for prime time. (RFID fits squarely in this category right now, McCreary says.) If the technology continues to look promising and has matured sufficiently, it will move to stage two, the on-deck circle, where a business case can be built and possible alternatives identified. If it survives that process, Pilkington is ready to begin the third stage, some form of implementation. Cox's Cotner has an even simpler process-test, test and test again. And he notes that success with one version of your early adopted technology shouldn't necessarily mean jumping enthusiastically to the next iteration. "We made that mistake with mySQL 4.0.xx when we tried it right away," Cotner says. "We had some issues as a result" (including a small table-corruption problem that was later resolved in a minor version upgrade). That experience has made him much more cautious about subsequent upgrades. VET THE VENDORThe drive to keep up with the Joneses-and then pass them in a blur on the right-has led more than one early adopter to a crash. But many such problems can be avoided with proper vetting of your new vendor. Epsilon's Coakley may have the most nightmare-inducing story. Almost 15 years ago, the company decided to build a large part of its marketing program's management platform on the then-new Thinking Machines massively parallel processing platform, making Epsilon (at the time owned by American Express) the first company to put commercial applications on cooler-than-thou Thinking Machines hardware. It looked like the perfect mating of Epsilon's software needs with hardware horsepower, until Thinking Machines went up in a flaming ball of mismanagement in 1995. "We had to replatform [the entire application]," Coakley recalls. "Thinking Machines was so new, we had to write everything for that damn machine." It took months for Epsilon to make the switch. But the experience taught Coakley to be very careful when working with new vendors. When Epsilon decided to investigate Netezza, for instance, Coakley brought in people from groups outside IT-including the CFO's office-to cast a cautious eye on the deal. "Folks like me, as much as we're supposed to be skeptical, we get excited about this stuff," Coakley says. "Sometimes you need somebody else to ask the tough questions." Epsilon's financial people delved into Netezza's fiscal footing, while the sales team made sure the company had a solid idea of how to turn Netezza's technology into a salable product. INTERNAL PREPARATIONAssuming that your vetting process results in a business deal, you should still prepare your staff for the possibility of failure. Doreen Griffith, CIO and senior vice president at securities-broker service provider Securities America (SA), recalls when a software vendor (she won't name names) made a shift away from the company's industry space, potentially leaving Griffith with an orphaned product that is part of a core offering to more than 1,500 representatives. But, she says, her company's entrepreneurial culture saved the day: SA bought the source code and continued development on its own. That same philosophy applies to several open-source products that SA uses as well (including a clustering platform from Emic Networks, the MySQL database and open-source voice-over-IP technology from Asterisk). Once the product comes in-house, SA developers learn it inside out, in case they need to support it on their own sometime down the road. Midsize companies such as SA aren't the only ones that can benefit from this "once you have it, you own it" approach. PPG Industries, a 30,000-plus-employee global manufacturer of glass and related chemicals, followed the same philosophy when it sought a tool to track idea generation across the company. PPG was ready to build its own Web-based idea generation and tracking system to replace its manual process. But as the company was about to get started developing the system on its own, a call from a startup vendor, MindMatters Technologies, led to the installation of a prebuilt system that delivered what they needed without the hassle and expense of going through a large development effort. And, says Jim Johnston, PPG's IT director of enterprise architecture and advanced technology, the fact that his company was prepared to build the software itself meant that MindMatters' going under wouldn't be as big a problem as it might have been. Part of the contract puts MindMatters' code in escrow, and PPG would pick up the development effort itself should the unthinkable happen. LIMIT THE SCOPENarrowing the scope of a new technology can also help, even if the tech will be running some critical part of your business. "Would we have put our entire Western Hemisphere network on something that looked like a JRG? No," says Pilkington's McCreary. Instead, JRG's hosted service let the company more closely manage operations at a single plant, allowing for faster switchover to different products and helping maintain the near-real-time manufacturing environment the auto industry requires. If things hadn't panned out with JRG, McCreary was certain that it wouldn't cripple the company. "Had this failed, we'd be back on spreadsheets," he says. "We'd be working Saturdays and Sundays and have higher costs, but the customer wouldn't have seen anything." And purchase contracts with JRG arranged by plant manager Wait helped guarantee minimal financial losses if things didn't pan out. "We set up the business structure to minimize risk, Wait says. "There wasn't a lot of money up front." And the fact that JRG was a hosted service only loosely coupled to the company's data meant the plant could disconnect quickly and stop paying for it at the same time-a far cry from tightly integrated ERP systems with long-term support contracts. DON'T GIVE AID TO THE ENEMYThere's one other risk that might not occur to some companies until well after the implementation: Your efforts may ultimately help your competitors. Epsilon's Coakley, for instance, expects some of the labor that his company put in to ensure that Netezza's data-mining box works well for Epsilon will now benefit Epsilon's big competitor, Acxiom, which bought Netezza products last summer. Coakley notes that early adopters might be able to arrange exclusivity agreements with their vendors. But those agreements will cost money. "If you don't make that decision to go exclusive, then you know ultimately it's going to open up to your competitors," he says. The key, he cautions, is determining if you'll still be able to take good advantage of the product, even when you're no longer the only user. And even if Netezza's products no longer provide the leapfrog advantage they used to, Coakley says, he feels Epsilon can still take good advantage of the products to add value to its offerings. And if he'd never gone with Netezza, he reasons, he never would have gotten his initial jump. The reward was simply worth the danger. "You never want to be in the position where you're going, 'Me too.' You always want to be viewed as a leader," Coakley says. PPG's Johnston reiterates the mentality that drives companies to risk early adoption. Taking a cue from PPG's own drive to constantly create new products, Johnston says, "If you're first to the market, you capture that market. You can always follow other companies and take their breadcrumbs. But I'd rather be out there." « previous page | 1 | 2 | 3 | 4
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