Driving the Street Process f 174060 (1)

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This research note is restricted to the personal use of [email protected]


G00174060

Driving the STREET Process for Emerging

Technology and Innovation AdoptionPublished: 30 March 2010

Analyst(s): Jackie Fenn

The most successful innovators define and follow a process to ensure that

critical activities and best practices are addressed (e.g., prioritizing

technology options). This is an important way to counter the Hype Cycle

effect, where an organization is pulled into adopting a technology or

management trend because of market pressure and the sense that"everyone's doing it," rather than through strategic decisions based on

corporate strategy and goals. Establishing an emerging technology process

helps an organization to becomeselectively aggressive that is, to adopt

early only those technologies or other key innovations that will have a

significant business impact.

Key Findings Following a technology and innovation adoption process is a best practice in driving

appropriate investment decisions and avoiding hype-driven, reactive mistakes.

Gartner's STREET process for emerging technology and innovation adoption consists of six

stages scope, track, rank, evaluate, evangelize and transfer.

The STREET process is appropriate for formal use by an emerging technology group or other

innovation function, or as a checklist of key activities by business leaders, innovators or other

individuals involved in innovation adoption.

Recommendations Follow an emerging technology adoption process. The STREET process can be adopted, or

adapted as appropriate, to form an organization's own emerging technology adoption process.

Make emerging technology adoption someone's job. Defining a process is the first step, but

identifying who will follow that process is also key to success. In some cases, this involves

establishing a full-time group focused on emerging technologies. In others, emerging

technology may be a part-time responsibility of the architecture group, a committee, or a key


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individual such as the CTO or CIO, or it may be distributed to domain experts or business

leaders.

Network, network, network. The most critical success of any technology adoption process

hinges on its leader's ability to build bridges to the business units, end users and other parts of

the IS organization. Like any other essential activity, this requires dedicated time and planning,even for informal networking.

Tie technologies to business need. In presenting opportunities for technology to the business,

take the additional step of showing how the technology will impact the work people do and the

roles they have,as well as the company's products and services.

Make prioritization explicit. Using a visible and graphical prioritization process, such as a Hype

Cycle, radarscreen or priority matrix, provides an objective basis and justification for

investment decisions. The prioritization process helps decision makers inside and outside the

emerging technology group (ETG) avoid becoming overly enamored of a technology at the

expense of others that may be more worthwhile.

Plan the route to deployment. A common failure point is when an evaluation team recommends

proceeding with a technology, but nobody picks up on the recommendation. Before expending

significant effort on investigating and evaluating a technology, the evaluation team should

ensure that a business champion or other key management advocate will drive the project

forward on a positive recommendation.

Start transfer early. Projects "thrown over the fence" to a business unit or the IS organization

almost never find fertile ground. To promote the transfer of promising technologies, the

emerging technology process must involve relevant staff during evaluation activities and at key

decision points.

Table of Contents

Analysis..................................................................................................................................................4

1.0 The Role of Emerging Technology Planning................................................................................4

1.1 Why Plan for Emerging Technologies?..................................................................................4

1.2 Defining Emerging Technology..............................................................................................5

1.3 The Importance of Process...................................................................................................5

2.0 Overview of the STREET Technology Adoption Process.............................................................6

3.0 Scope: Establishing the Context for Technology Innovation........................................................ 9

3.1 Top Down: Strategic Direction............................................................................................ 10

3.2 Bottom Up: Business Issues...............................................................................................11

3.3 Out of the Box: Visioning and Scenarios............................................................................. 12

3.4 Enterprise Personality: Type A, B and C Characteristics......................................................13

4.0 Track: Collecting the Candidates.............................................................................................. 13

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4.1 Technology Scan................................................................................................................14

4.2 Technology Profiles............................................................................................................ 15

5.0 Rank: Make the Prioritization Explicit........................................................................................ 19

5.1 Factors for Ranking Technologies.......................................................................................19

5.2 Spider Charts..................................................................................................................... 20

5.3 Hype Cycles....................................................................................................................... 21

5.4 Radar Screens....................................................................................................................26

5.5 Priority Matrix......................................................................................................................27

5.6 Technology Scorecards......................................................................................................30

5.7 Balancing the Portfolio........................................................................................................32

5.8 Taking Action Based on Ranking Results............................................................................33

6.0 Evaluate: The Deliverable Is a Decision..................................................................................... 33

6.1 Planning the Evaluation Project...........................................................................................33

6.2 Whatto Evaluate: Benefits, Risks and Costs.......................................................................34

6.3 How to Evaluate: Prototypes, Pilots and Champion/Challenger...........................................37

6.4 Technology Evaluation Documents.....................................................................................40

6.5 Making the Decision........................................................................................................... 41

7.0 Evangelize: Spreading the Word...............................................................................................42

7.1 Marketing........................................................................................................................... 42

7.2 Education...........................................................................................................................43

7.3 Networking.........................................................................................................................43

7.4 Driving Change................................................................................................................... 44

8.0 Transfer: Making It Happen...................................................................................................... 45

8.1 Transferring Knowledge Through People............................................................................ 45

8.2 Consulting to Operational Development..............................................................................46

9.0 Seven Imperatives for Successful Emerging Technology and Innovation Adoption....................46

Recommended Reading.......................................................................................................................47

List of Tables

Table 1. TechnologyMaturity Levels.....................................................................................................16

Table 2. Example Benefits of a Technology Candidate......................................................................... 35

Table 3. Example Risks of a Technology Candidate..............................................................................36

Gartner, Inc. | G00174060 Page 3 of 49


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List of Figures

Figure 1. The STREET Process for Emerging Technology and Innovation Adoption................................ 8

Figure 2. Government TRL Meter......................................................................................................... 17

Figure 3. Spider Charts for a Candidate Technology.............................................................................20

Figure 4. The Hype Cycle..................................................................................................................... 22

Figure 5. Gartner Hype Cycle for Vehicle Information and Communications Technologies, 2007...........24

Figure 6. Two Key Questions for the Hype Cycle.................................................................................. 25

Figure 7. Radar Screen With Information Extracted From Gartner's Hype Cycle for Vehicle Information

and Communications Technologies, 2007............................................................................................26

Figure 8. Gartner's Priority Matrix for Vehicle Information and Communications Technologies, 2007.... 28

Figure 9. Priority Matrix Adoption Profiles............................................................................................. 29

Figure 10. Actions Resulting From a Priority Matrix Assessment........................................................... 30

Figure 11. Rating Scorecard.................................................................................................................31

Figure 12. Technology Transfer from ETG to IT or Business-Unit Staff..................................................40

Analysis

1.0 The Role of Emerging Technology Planning

1.1 Why Plan for Emerging Technologies?Early adoption of emerging technologies can create or maintain an organization's competitive edge

by spearheading growth and driving internal efficiencies. To ensure that the technologies are

selected based on organization value, rather than the latest trend hyped in the marketplace,

organizations are realizing that they need to formalize their emerging technology management

activities. Technology and other innovations such as management trends will eventually find

its way into the workplace, with or without planning but companies that fall back on a reactive,

"as needed" approach in their adoption of new technologies run the risk of making costly,

personality-driven choices, rather than strategic decisions that align with their larger corporate

strategy andgoals. The increasing invasion of technology into a business's processes, services,

products, channels and business models is making it more important than ever to manage the

adoption process well.

Benefits achieved by companies that take a deliberate and planned approach to adopting emerging

technologiesinclude:

Identifying strategic opportunities that combine technology "push" (that is, through technology

tracking) with business "pull" (that is, based on business context and goals).



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Prioritizing options, which ensures more intelligent selection of the technologies most likely to

have a major positive impact.

Coordinating and leveraging disparate activities related to emerging technology across the

company, enabling organizations to build on successes and avoid redundancies.

Educating staff to become skilled in the risk management associated with introducing new

technologies, including stopping investments if appropriate.

Note that we focus in this research on the adoption of technology, rather than the invention of new

products and services. While internal creativity is essential to an organization's well-being (see

"Managing Innovation: A Primer, 2009 Update" for a detailed examination of this topic), equal

attention should be given to the far more common and equally challenging issue of deciding which

externally generated innovations and most technologies fall into this category an organization

should adopt, and when.

1.2 Defining Emerging TechnologyGartner defines "emerging technologies" as those technologies that are not yet mature in the

marketplace and so entail higher-than-average risk. This typically means that the technologies are

at the earlier stages of their life cycles and have been adopted by less than 20% of their target

population. The level of risk decreases gradually as more and more organizations adopt, and the

body of experience and best practices grows, although the risk of not achieving anticipated

benefits, or of expending more resources than planned, is never completely eliminated.

For some organizations, emerging technology is defined as "anything our organization isn't using

yet." This definition is certainly defensible to the degree that the initial adoption of a technology

entails a higher risk than enhancements and upgrades, particularly for less aggressive companies

that are not prepared to manage risk well. In discussing emerging technologies, organizations needto be clear whether they are dealing with a technology that is just immature within their own

organization, which may involve a moderate amount of risk, or whether it is also immature in the

overall marketplace, which may entail a higher level of risk.

For the purposes of this research, we use a fairly expansive definition of emerging technology, but

pay particular attention to issues that arise when deciding which technologies are worth adopting

while they are still immature in the marketplace. The processes and best practices also apply to

other types of innovation (e.g., management trends), although we mostly refer to technology

innovation in this research.

1.3 The Importance of Process

Developing an effective approach to adopting emerging technologies requires two major elements:

1. Following a Process:The most successful innovators define and follow a process to ensure

that critical activities and best practices are addressed (e.g., prioritizing technology options).

This is an important way to counter the Hype Cycle effect, where an organization is pulled into

adopting a technology because of market pressure and the sense that "everyone's doing it"



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(see "Understanding Gartner's Hype Cycles, 2009"). Establishing an emerging technology

process helps an organization to becomeselectively aggressive that is, to adopt early only

those technologies that will have a significant business impact. It also allows it to capture and

analyze more innovations in a sustainable, repeatable way, potentially leading to greater

advantage to the enterprise than an ad hoc approach. It also raises the profile of IT as the

leader in this area, a role that will increase in strategic importance with the increasing role of

technology in a business's services, products and processes. However, it is important to note

that blindly following process can drive down the level of innovation rather than increase it, so a

careful balance of process and agility is needed.

In this research we describe a process for emerging technology adoption consisting of six key

activity stages scope, track, rank, evaluate, evangelize and transfer (STREET).

2. Making It Someone's Job:Without dedicated effort, emerging technologies can slip into the

realm of "I'll do it when I have time" in the face of more immediate deadlines, which can

undermine the potentially huge impact of appropriate emerging technology adoption. Defining a

process is the first step, but identifying who will follow that process is also key to success.

Most large companies have attempted to formalize the emerging technology adoption process in

some manner. In some cases, this involves establishing a full-time group focused on emerging

technologies. These groups typically have names such as "emerging technology group (ETG),"

"advanced technology group," "technology R&D" or "technology strategy and innovation." In

others, emerging technology may be the responsibility of the architecture group, a committee, or a

key individual such as the CTO or CIO, or it may be distributed to domain experts or business

leaders. This function is rarely outsourced, even in organizations that are heavy users of IT services,

because of the key role that emerging technology plays in competitive advantage and the

requirement for a deep understanding of the business context.

In this research, for simplicity, we refer primarily to ETGs and ETG staff when discussing activitiesand best practices associated with the emerging technology adoption process. However, the

recommended approaches apply equally to less structured emerging technology planning activities

and to business leaders and individuals who need to determine which technologies are most

relevant to their needs.

2.0 Overview of the STREET Technology Adoption Process

The goal of emerging technology planning is to manage the evaluation, introduction and

deployment of the emerging technologies that will most effectively further the company's strategic

objectives. While every company has its own particular approach to achieving this goal, Gartner has

identified a set of activities scope, track, rank, evaluate, evangelize and transfer (STREET) thatrepresent best practices in the planning and adoption process. STREET is suitable for an ETG to

use or adapt in defining its own internal process, or for business leaders, innovators or other

individuals involved in innovation adoption to use as a checklist of key activities:

Scope.The scope stage provides business focus and context for emerging technology

investments by identifying what organizational purposes should be served, such as supporting

corporate objectives and key initiatives or overcoming business process bottlenecks. Scope

also involves determining how aggressive the organization is and wants to be with respect to



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emerging technologies, including the acceptable level of risk. For business-unit- or team-level

adoption decisions, the scope will be focused on the needs and objectives of the unit. Activities

include competitive analysis, visioning and scenario building, and identifying business problems

and opportunities.

Track.The track stage involves seeking out relevant technologies those that match theorganization's defined scope for innovation through emerging technology from a broad range

of sources. Tracking activities include understanding the position of a technology is in its

maturity cycle and identifying potential business applications and champions for the

technology. The ETG should capture the results in a way that can be communicated to others in

the organization and that lends itself to further decision making. The track stage drives

organizations to be proactive about finding worthwhile emerging technologies.

Rank.In this stage, the ETG considers alternative candidates by ranking the technologies and

selecting those worthy of immediate attention. The aim is to identify those technologies that

look most likely to bring significant benefit to the organization within acceptable levels of risk.

This involves asking probing questions about the potential of each technology and, wherepossible, comparing the value of multiple technologies against each other. A virtue of ranking

multiple technologies at the same time is that it highlights the trade-offs that need to be made in

terms of resource allocation that is, if one person's pet technology is pursued, those

resources (people and money) are not being spent on some other, perhaps more worthy,

technology. Ranking is a key, but often overlooked, step in emerging technology adoption.

Evaluate.In the evaluate stage, ETGs investigate each of the top-ranked emerging technology

candidates where a lack of knowledge or understanding still prevents them from deciding

whether to move forward. Activities include paper and hands-on investigations, as well as

prototyping and piloting, to understand each technology's value, and eliminate or at least

identify remaining risks and uncertainties. The evaluation stage builds in regular evaluation and

decision points, and the end-result stage is a decision whether or not to move forward.

Evangelize. In many cases, the people who identify the value of a new technology do not have

the direct authority to tell others that they must adopt it. For each technology an ETG

recommends pursuing, it therefore needs to inspire, educate and involve other people to obtain

the cooperation and support of all those who will influence the successful adoption of the

technology by the business. Marketing, educating, networking and engaging others take place

throughout the adoption process, but their importance is most apparent after the evaluation

phase. The ETG must overcome organizational resistance by inspiring key decision makers to

appreciate the technology's business impact.

Transfer.In its role of driving technology innovation, the ETG at some point needs to transferresponsibility for a new technology to another department or project that will take the

technology to full-scale deployment, so that the ETG can move on to new territory. This requires

more than transferring knowledge (for example, teaching people how to use a development

tool). In most cases, the only way technology transfer succeeds is by transferring people that

is, having knowledgeable staff work alongside those who must learn the skills required to

deploy the technology. For successful transfer, the players ultimately responsible for driving the



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technology forward must be involved in earlier stages of the STREET process in particular,

the evaluation activities.

Technology planning and adoption are not a strictly sequential, linear process, so STREET reflects

the continuous activities and multidirectional feeds among the various stages. Figure 1 shows the

principal flows and interactions within the STREET process.

Figure 1. The STREET Process for Emerging Technology and Innovation Adoption

TransferEvaluateTrack

Scope EvangelizeInnovation

Candidates

Rank

Source: Gartner (March 2010)

Understanding the scope and context for innovation is an essential prerequisite for any emerging

technology activity. The scope activities drive knowledge of what types of technologies to track.

Track is often the most active and resource-intensive of the first three stages. It is a continuous

activity, although many organizations conduct a periodic, usually annual, technology scan. Incontrast, an organization's scope its mission, strategy plans, etc. is likely to be relatively

stable over the course of a year or longer, with changes triggered by major new business initiatives,

external forces such as regulations or competitive actions, or an annual strategic planning exercise.

On occasion, a particularly disruptive technology that could change the current scope of the

organization (for example, a technology that enables a new business model) will come to light

during the track stage. Because a company's scope should itself be subject to innovation over time,

this type of technology a "game changer" also needs to be accommodated by the process. If

the game changer is determined to have merit after appropriate evaluation and consideration,

typically by the most senior executives in the organization, it may cause a permanent change or

expansion in the organization's scope, as shown in Figure 1 by the arrow from the transfer back to

the scope stage.

The technology candidates identified by the track stage feed into the rank stage, where the scope is

used to assess and prioritize the potential of each candidate. Ranking can occur for each

technology candidate one by one or by periodically comparing a set of candidates with each other.

Assuming that the right kind of information is collected during tracking, rank is an essential but

typically brief activity. At the end of the rank stage, one candidate or a set of prioritized candidates

will have been judged worthy of further action.



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The right side of Figure 1 shows the flow of the final three stages evaluate, evangelize and

transfer that apply to each technology candidate that is selected during the rank stage. The four

arrows extending from the evaluate stage show four possible decision outcomes: proceed to

evangelize and transfer, re-evaluate, return to track or drop. In general, the activity flow is from

evaluate to evangelize to transfer, but we have shown a direct link between evaluate and transfer to

highlight that these two stages often do (or should) overlap considerably. As noted, evangelize and

transfer activities actually need to begin earlier in the process, at the latest toward the end of the

evaluate activities.

STREET ends at the point where a technology innovation becomes a part of the mainstream project

development or management process. It does not cover the later stages of full deployment and

rollout. That does not imply that there are not still significant challenges to be overcome during

rollout (see "Toolkit Tactical Guideline: Adopting New Technology Within an Enterprise Technical

Architecture" for a discussion of potential issues in adopting new technology). Moreover, rolling out

the technology is only one stream of multiple activities that must take place for an organization to

realize the benefit of the new technology. Other activities might include changing incentive

structures (for example, to reward people for collaborating when a collaboration tool is introduced),

changing management structures or changing procedures and process officially, any of which may

involve working with other areas of the business such as HR or marketing.

The STREET process is described further, along with many case studies and best practice

examples, in the book "Mastering the Hype Cycle: How to Choose the Right Innovation at the Right

Time" by Jackie Fenn and Mark Raskino (Harvard Business Press, 2008).

Like most management methods, the STREET process works best when adapted to the specific

culture and context of each adopting organization. The rest of this research highlights approaches

and best practices that ETGs can apply to each of the STREET stages.

3.0 Scope: Establishing the Context for Technology Innovation

The main purpose of the scope stage of the emerging technology adoption process is to provide

focus for technology investments. Novice emerging technology planners commonly begin with

tracking activities, without a clear idea of the business objectives and priorities the technology will

support. Alignment is a two-way flow: Technologists must understand and prioritize according to

the business objectives, but also must expect to influence the direction of the company by helping

business planners understand how technology will shape business models and processes.

Understanding the business priorities is particularly critical in the high-risk environment of emerging

technology adoption. To make the additional risk inherent in adopting an immature technologyworthwhile, the potential benefits of a successful deployment must be correspondingly high.

Focusing on high-impact and strategic business issues may be counterintuitive for some

technology planners, who may be tempted to keep a low profile by selecting a simple or noncritical

function until the technology is proven. However, the risk inherent in new technologies can only be

mitigated if the company applies them to meaningful business processes.

The scope can be defined from four major perspectives:



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A top-down perspective looking at the organization's strategic direction

A bottom-up perspective driven by specific business issues

An "out of the box" perspective imagining new ways of doing business

Consideration of the organization's enterprise personality with respect to risk that is, howmuch risk is the organization willing to embrace to achieve its goals.

3.1 Top Down: Strategic Direction

The top-down perspective involves identifying the high-level corporate goals and strategic planning

initiatives of the company, including any specific, near-term objectives (such as improved customer

service or faster product development). It also incorporates an understanding of broader industry

directions and market dynamics that will have an impact on future business and process models.

The way in which strategic planning is discussed and conveyed varies significantly between

companies and over time. It is a dynamic management discipline, with new ideas hitting themanagement literature every year, from classics such as C.K. Prahalad and Gary Hamel's core

competencies introduced around 1990, to more recent approaches such as value curve analysis, as

described by S. Chan Kim and Renee Mauborgne in their book "Blue Ocean Strategy."

Even companies that lack a formal strategic plan usually have a mission, set of goals or statement

of core competencies that act as a focus for investment of resources. Successful ETG managers

seek out these goals and objectives, frequently through informal "corridor" dialogues with the

company's strategic planners and executive management.

Two particularly useful ways to tap into strategic perspectives to help focus emerging technology

innovation are value disciplines and persistent business needs: Value disciplines were identified by Michael Treacy and Fred Wiersema in "The Discipline of

Market Leaders." Treacy and Wiersema contend that there are three approaches or values an

organization can use to differentiate itself in the market product leadership, such as Apple

and Nike; operational excellence, such as Ryanair and Costco; and customer intimacy such as

Neiman Marcus and GE Healthcare (which offers hospitals a full range of training and

management programs for its medical devices). Value disciplines are a particularly useful

concept because even if an organization's executives haven't explicitly stated their value

discipline, most managers can discuss and agree on what their company's value discipline is.

They also highlight the fact that creating an innovative product is not the only pathway to

success, but that innovating in service delivery or process efficiency can also drive industry

leadership.

"Persistent business needs" is a term coined by Mark MacDonald in Gartner's Executive

Program report, "Linking Needs, Technology and Innovation" from 2004. These are activities

that an organization is always striving to improve, such as "shorten product development

cycles" for a product company, or "leverage assets to a new channel" for a media company.

Some persistent business needs, including growing revenue, cutting costs or improving safety

are universal across industries. When a persistent business need is elevated in importance



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because it matches an organization's current strategy or ongoing value discipline, it becomes a

useful way to focus emerging technology activities. For example, an organization with a value

discipline of customer intimacy may pay particular attention to the persistent business need of

increasing the number of touchpoints per month per customer. As with value disciplines, most

people inside an organization or department can agree on what their persistent business needs

are.

In some organizations, the ETG explicitly reiterates these goals and priorities in documents or

presentations to lay out the assumptions against which it will pursue its emerging technology

planning agenda. This enables misunderstandings to be addressed early in the life cycle (and, in

some cases, acts as the only written resource for such information). In using strategic planning as a

way to focus its efforts, the ETG will often end up leading or inspiring the organization with respect

to the potential value of emerging technologies.

Where possible, emerging technology planners should be formally involved at key points of

strategic business planning through their participation in relevant committees or planning meetings.

This is a highly effective way to identify the common objectives of the company and to help decisionmakers understand the potential impact of technology. For particularly large or geographically

dispersed enterprises, this role may need to be delegated among multiple members of the emerging

technology team, with different staff members responsible for different business units.

3.2 Bottom Up: Business Issues

The bottom-up perspective highlights business problems or process bottlenecks that may be

alleviated through IT solutions. Representatives from the business units are often in the best

position to identify where this type of opportunity occurs.

Although the business-unit-led approach to focusing emerging technologies is somewhat morereactive in its nature than strategy-led, an ETG should seek out business-unit executives for regular

or periodic brainstorming activities to facilitate the flow of information. Cross-functional high-level

committees should be included where appropriate (for example, by having emerging technologies

become a regular agenda item). Visits to remote business units are important for gaining a firsthand

perspective of the problems. If a specific area of the business is likely to be experiencing rapid

change or opportunity in the near future, it may be worth the ETG applying particular attention and

resources to that area. For example, one head of an ETG for a bank spent six months in its payment

department to understand this complex area to determine the opportunities and impact of

electronic payments and micropayments.

Bottom-up opportunities for innovation may be triggered by specific events (e.g., a physical move)by a public relations or financial crisis, by regulatory pressures, or by a ripple-down effect of

strategy or persistent business needs that result in specific business-led initiatives. For example,

the move of many companies and industries into emerging markets, where local needs are specific

and different from established markets, is a growing opportunity for innovation and the application

of emerging technologies.



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In some cases, the best way to address a business issue or bottleneck may not be through an

emerging technology, or even through IT at all. ETG staff may, at times, need to dive into "common

sense" solutions to help business units make progress. The ETG staff often brings the appropriate

problem-solving approach and outside perspective. Even though this is not the primary function of

the ETG, it can be worth spending time on such problems to enhance the group's credibility and

value.

Business units, managers and executives may also make specific project requests to the ETG, often

to evaluate specific products (such as mobile devices). While these may not be particularly strategic

or high-impact opportunities, it is again important to acknowledge these requests and support them

to the extent possible to maintain good relationships and credibility.

3.3 Out of the Box: Visioning and Scenarios

The "out of the box" perspective encourages creative thinking and deliberately expands the space

of future opportunities for the company. Approaches include scenario planning, as pioneered by

Global Business Network (see "The Art of the Long View," by Peter Schwarz; "Three EconomicFutures and What They Mean for IT") and future "day in the life" storytelling (see "A Day in Your Life,

2028"). Another approach is to identify accepted industry constraints and examine how they might

be overcome. For example, in 2007 UPS introduced a delivery intercept service, destroying the

decades-old constraint in mail delivery that a package, once mailed, could not be retrieved until it

arrived at its destination.

Since a strategic perspective can be difficult to attain amid day-to-day pressures and priorities, a

session dedicated to strategic brainstorming or scenario planning can be an effective way to

facilitate longer-term thinking. Such sessions are typically a one- to two-day off-site event, often

featuring an invited speaker with an industry or technology perspective. The audience is drawn from

a cross-section of business and IS functions to attain a diverse set of perspectives. A professionalfacilitator is frequently invited to maintain a cooperative and nonjudgmental atmosphere that

encourages full participation. The agenda includes understanding and brainstorming possible

industry directions, technology candidates and internal applications, and prioritizing potential

application or technology initiatives. Because these off-site sessions can be costly, they are usually

performed infrequently (for example, every one or two years) at the launch of a major initiative to re-

evaluate technology positioning and priorities. Smaller-scale versions may be performed internally

much more frequently some ETGs have weekly brainstorming sessions within the group.

The output from visioning sessions can feed into annual planning activities, or can become a rallying

point for a specific initiative. The ETG in one insurance company created a video showing an

integrated contact center from the perspective of the agent and the customer, based on the resultsof a "future vision" activity. The video was picked up by senior management and used in executive

meetings to create a common vision and direction for the company.

One of the challenges of working with speculative activities such as visioning, scenarios and

constraint-busting is to keep them alive and in people's minds after the scenario planning or

visioning activity is over. Scenario planners often define "indicators" to track, which show whether a

scenario is becoming more or less likely as events unfold. But the planners still need to remember

to check the indicators periodically an ETG can be a catalyst in keeping this activity alive. In most



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cases, the value of these out-of-the-box activities is to generate a burst of creative thinking that

may turn into a more tangible initiative or focus for innovation and emerging technologies.

3.4 Enterprise Personality: Type A, B and C Characteristics

In planning and managing emerging technology adoption, it is important for an organization to

understand its own tolerance for risk with respect to innovation that is, its enterprise personality

type. Gartner distinguishes three enterprise personality types with respect to technology adoption:

Type A(aggressive) organizations are pioneers that consciously and aggressively adopt high-

risk strategies to gain potentially high rewards and competitive advantage. To handle higher

risk, Type A organizations have developed the values, culture, processes, practices, and

management skills needed to take risks intelligently and handle inevitable failures

constructively. A 2008 survey showed that 20% of organizations consider themselves Type A.

Type A organizations are more likely than others to have a formal, full-time ETG.

Type B(mainstream) organizations are willing to support moderate risk taking in the adoption ofinnovation and have the corporate skills and culture to support such initiatives. Approximately

54% of organizations are Type B.

Type C(conservative) organizations are cautious adopters of anything new. They are neither

willing nor prepared to handle high levels of risk. Approximately 26% of organizations self-

identify as Type C.

Pockets of Type A, B and C behavior can occur in various parts of the same organization; however,

most employees can identify one dominant category that drives their corporate IT behavior. This

behavior is not necessarily the result of a conscious corporate decision, but rather a consequence

of how much importance the organization's executive management assigns to technology in

achieving the company's business goals. Some industries have a higher-than-average proportion ofType A organizations (such as financial services and telecommunications) compared to other, less-

aggressive industries (such as retail or insurance). Understanding the organization's enterprise

personality is a key element of the scope stage trying to deliver Type A technology initiatives into

a Type C organization is rarely successful. Organizations can move toward a more aggressive

personality, but this needs to be driven from the highest levels in the organization. Expect to push

forward only one style at a time (for example, from a Type C to a Type B), because most

organizations cannot absorb too much change at one time.

4.0 Track: Collecting the Candidates

Most ETGs, and many other IT leaders, view technology tracking as their core function andenthusiastically seek out new technologies. However, not all are as effective as they could be at

assessing the technologies in terms of their relevance to the strategic business initiatives,

processes and bottlenecks identified in the scope stage. They can get seduced by the technology

itself, rather than by the customer or business need. Another challenge is capturing the information

in a form that can be shared with others in the organization and that lends itself to further decision

making.



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Information sources (for example, vendor labs, colleagues in other business units and

geographies)

Application areas (for example, CRM, security, application development, business intelligence)

Technology areas (for example, unified messaging, cloud computing, collaboration, humancomputer interaction)

One way to draw deliberately on a broad population of contributors is through an "innovation

challenge," which has become a popular way for companies to find innovative solutions from

across, or even beyond, their corporate boundaries. Unlike the suggestion boxes of an earlier

management era, which collected discrete individual contributions, in-house innovation challenges

aim to provide an environment where employees collaborate and build on each other's ideas. Those

originating or contributing to a successful idea often receive the option to work on the resulting

project, which can significantly enhance their visibility in the company. External innovation

challenges open up participation to customers and partners, or to communities of experts and

contributors around the globe. For example, in Procter & Gamble's (P&G's) "Connect + Develop"

model, the company publishes its top 10 needs (its scope) and asks for solutions using an open

innovation model.

4.2 Technology Profiles

For each potentially interesting technology identified during a technology scan, the ETG should

develop a technology profile to document the investigation. The initial profile may be very brief

just a note of the technology, its definition and potential areas of relevance within the business. As

the investigation progresses, more information about the technology, and its status, risks, benefits

and applications can be added to the profile.

One challenge in creating a useful profile is in determining what level of granularity to track. In somecases, technology candidates may present themselves as very specific new products and services.

While these are often the easiest innovations to spot, because they are so tangible, it is also

important to think about the deeper capability or trend. When faced with an innovative product,

particularly a highly hyped one, it is important to remember that early entrants into a market are

often not the ones that dominate in the longer term. In general, the capability level (e.g., virtual

worlds or microblogging), rather than a specific product (e.g., Second Life or Twitter), is a more

appropriate level of technology to consider in moving through the STREET process.

In addition to the individual profiles, some organizations create and document higher-level

categories for a set of related innovations. For example, the topics of radio frequency identification

(RFID), geographic information systems, Google Earth and location-based services could becollected under a theme of "location intelligence."

A key part of the technology profile is the assessment of the technology's current maturity. Table 1

shows an example set of maturity stages, in this case the ones that Gartner uses in creating

technology profiles for Hype Cycle entries (see for example the entries in "Hype Cycle for Emerging

Technologies, 2009"). In practice, the stages of mature mainstream, legacy and obsolete are not

included in tracking activities focused on new technology adoption. They may, however, be valuable



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in discussing which technologies should be retired or replaced (see "Introducing the IT Market

Clock").

Table 1. Technology Maturity Levels

Maturity Level Status Products/Vendors

Embryonic In labs None

Emerging Commercialization by vendors

Pilots and deployments by industry leaders

First generation

High price

Much customization

Adolescent Maturing technology capabilities and processunderstanding

Uptake beyond early adopters

Second generation

Less customization

Early mainstream Proven technologyVendors, technology and adoption rapidly evolving

Third generationMore out of box

Methodologies

Mature

mainstream

Robust technology

Not much evolution in vendors or technology

Several dominant vendors

Legacy Not appropriate for new developments

Cost of migration constrains replacement

Maintenance revenue focus

Obsolete Rarely used Used/resale market only


Another example is the technology readiness levels (TRLs) used by many different areas of the

government as a common way to categorize a technology innovation's maturity. There are nine

levels, with Level 1 being the least mature and Level 9 being fully proven technology (see Figure 2).

A key feature of TRLs is that technologies are formally designated as having progressed from one

level to the next.



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Figure 2. Government TRL Meter

System Test, Launchand Operations

System/SubsystemDevelopment

Basic TechnologyResearch

Research to ProveFeasibility

TechnologyDevelopment

TechnologyDemonstration

TRL 9

TRL 8

TRL 7

TRL 6

TRL 5

TRL 4

TRL 3

TRL 2

TRL 1


Some organizations document the maturity of the technology within the organization rather than

more generally in the marketplace for example, with stages such as "tracking," "investigating,"

"piloting" and "deploying."

Technologies with multiple distinct applications within the company such as speech recognition

for the call center versus speech recognition for dictation in the legal department should have a

profile for each application because costs, benefits, suppliers and other aspects may differ

significantly.

A typical technology profile includes:

Name and definition of technology

Business application Where would this be used within the organization?

Benefit to organization What are the anticipated business returns for the application (for

example, reduced costs, increased revenue or profits) and impact (positive, from successful

exploitation, or negative, from late or missed implementation)? Will the technology change

business processes (incrementally or drastically), affect problem types (enable previously



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intractable functions to be performed), or upset the competitive dynamics of an industry? Will

the impact be confined to one business unit, or can it be leveraged across the company? (See

Section 6.2.1 of this research for a detailed list of potential benefits.)

Potential business champion Is there an enthusiastic and influential champion for selected

business applications?

Activity inside organization Is there already investigation or adoption of this technology that

can be leveraged? What is the current status: tracking, proof of concept, pilot?

Competitors' adoption Is the company losing a competitive advantage by not adopting the

technology?

Level of maturity What is the level of robustness and stability of the technology, and how fast

is it progressing? This may include an assignment to one level of a scale (e.g., TRLs). The

determination of maturity incorporates such factors as the existence of accepted standards, the

stability and legitimacy of vendors in the market, and academic and research initiatives in the

area.

Level of risk What factors would inhibit the adoption of this technology? Risk factors to

consider include not only technology issues (for example, frequent crashes, low accuracy, slow

performance), but also disruption of the IT architecture and organizational processes, and the

risk of nonadoption or resistance by users, any of which would mean that the organization

might fail to meet its ROI objectives (see Section 6.2.2 of this research for a list of common risk

factors).

Approximate costs What level of investment is required to bring this technology into

production in the application? Factors to be considered include costs of acquisition,

development, integration, maintenance, staff and subsequent process and architecture changes

(such as performance upgrades required). The cost may be presented as a range for the bestand worst cases, depending on how the technology progresses.

Leading vendors Which firms are shipping products with this capability? Is the technology

available from established vendors?

Graphics and images Some companies have found that the simple act of adding images to a

technology profile for example, supplier logos or a screen shot makes the profile much

more likely to be read, particularly in printed form.

Some organizations publish the active emerging technology profiles on the company intranet so

that all parts of the organization can see the status of, and even contribute to, technology tracking

activities. Ideally, the profiles areliving documents that are added to and updated as the ETGidentifies new candidates or uncovers new potential uses. In reality, most companies focus on

consolidating the candidates in an annual or semiannual update as part of the IT and business

planning cycle. This also helps the process of synthesizing multiple threads into coherent, relevant

opportunities.



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5.0 Rank: Make the Prioritization Explicit

The objective of the rank stage is to select the subset of technologies, initiatives and project ideas

that look most likely to bring significant benefit to the company. Ranking candidates need not take

significant amounts of an ETG's time, but it is a critical activity in avoiding the personality-driven or

hype-driven technology investment decisions that an emerging technology planning process seeksto avoid.

Ranking can assess a single candidate in absolute terms against a predetermined set of objectives

or goals, or can compare candidates in a group against each other.

The individual ranking approach is useful when selection decisions are distributed throughout the

organization. It also tends to be used in autonomous and well-funded ETGs that have the time,

capacity, and independence to pursue a number of candidates before justifying their choices

externally. Individual ranking involves answering a set of questions about a technology to see

whether it passes relevant thresholds of value and likelihood of success. If the questions are

thoughtfully addressed, they provide a sanity check against hype effects and pet projects.

The group ranking approach is the stronger way to counter Hype Cycle influences, because looking

at the relative value of candidates helps prevent being swept away by a single candidate. It is a

particularly useful approach when an individual leader, team, or committee must recommend which

candidates to pursue and needs to justify its decision. Graphical ranking on a single visual

representation is a particularly useful way to draw out assumptions about the relative merits of a set

of candidates, as shown in Sections 5.2 through 5.5 of this research.

5.1 Factors for Ranking Technologies

Relevant factors for ranking and prioritizing technologies are numeric or scale versions of theinformation collected in the technology profile, such as:

Scale of benefit. How does the technology contribute to the objectives identified in the scope

stage? Will the benefits be transformational, high, moderate or low? The higher the better.

Scope. Will the technology be adopted companywide, at a local or regional level or within a

specific function or department? The broader the better.

Current maturity. What is the current level of robustness and stability of the technology? The

farther along the maturity scale, the better, although some ETGs deliberately scan for early

stage opportunities.

Time to value/maturity. How long will the technology take to reach mainstream adoption? Notethat this is different from current maturity two technologies may both be currently

"emerging," but one will mature in five years and the other will still be "emerging" for the next 10

years. The faster a candidate is progressing toward maturity and predictable value, the more

urgently it should be examined.



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Risks. Are there major risk factors associated with performance, integration, penetration, or

payback? For example, for large-scale changes what is the expected level of resistance that

might affect user penetration? The lower the risk, the better.

Costs. What are the estimated costs for development, integration, adoption and rollout? Higher

costs are less desirable. For an otherwise attractive candidate, they make detailed evaluationeven more crucial, to ensure that the value justifies the high cost.

Sponsors/champions. Are there enthusiastic and influential people associated with a

candidate? If so, it is more likely to succeed.

Current activity inside the company. Is there already investigation or adoption of a similar or

related technology that can be leveraged? If experience and skills are already available, the

technology is more likely to be adopted smoothly.

5.2 Spider Charts

A spider chart provides a simple graphic view of how well an emerging technology candidatesatisfies objectives. It can help teams or individuals quickly analyze a candidate against six to 10

key factors.

The chart has several spokes or radials, and each radial represents a factor expressed as an

objective (e.g., high benefit, broad scope, low risk). Low satisfaction of an objective is plotted closer

to the center of the chart. High satisfaction is plotted near the end of the radial, the outside of the

diagram. Figure 3 shows a hypothetical technology candidate mapped against the eight factors

listed in Section 5.1.

Figure 3. Spider Charts for a Candidate Technology

Benefit

Scope

Low Risks

Current

Maturity

Low Time

to Value

Low Costs

Sponsors/

Champions

Current

Activity

Candidate

Innovation

Benefit

Scope

Low Risks

Current

Maturity

Low Time

to Value

Low Costs

Sponsors/

Champions

Current

Activity

Candidate

Innovation

Cutoff

Threshold




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Groups of candidates can be compared visually by preparing a spider chart for each one and

setting them side by side. The most promising will stand out visually as a larger colored or shaded

area.

Some organizations define thresholds below which a technology candidate will not be selected for

evaluation one that is too immature, too costly for current budgets or below a desired level ofbenefit. The spider chart makes the relationship between a technology and the thresholds easy to

visualize. The right-hand spider chart in Figure 3 shows how a hypothetical technology fails to

achieve the objectives for costs and current activity, indicating that financial and resourcing needs

are likely to be a challenge for this candidate.

5.3 Hype Cycles

In performing the prioritization process, it is also important to identify, and thus avoid, the

commonly occurring wrongreasons for which companies adopt technology. The high level of hype

surrounding technology in the marketplace is one of the factors that frequently drives companies to

a poorly timed adoption of technology (typically too early).

The role that hype plays in the early stages of a technology's life cycle can be represented by the

Hype Cycle model of emerging technologies, introduced by Gartner in 1995 and developed further

in "Mastering the Hype Cycle: How to Choose the Right Innovation at the Right Time," by Jackie

Fenn and Mark Raskino (Harvard Business Press, 2008) and in "Understanding Gartner's Hype

Cycles, 2009." The Hype Cycle characterizes the typical progression of a technology, from

overenthusiasm through a period of disillusionment (because of the inevitable failures that arise

from inappropriate application and timing), to an eventual understanding of the technology's

relevance and role (see Figure 4).



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Figure 4. The Hype Cycle

Startup companies,

first round of venture

capital funding

time

Slope of EnlightenmentTrough of

Disillusionment

Peak ofInflated

Expectations

InnovationTrigger

Plateau ofProductivity

R&D

First-generation

products, high price,

lots of customization

needed

Early adopters

investigate

Mass media

hype begins

Negative press begins

Supplier consolidation

and failures

Second/third

rounds of

venture capital

funding

Methodologies and best

practices developing

Supplier

proliferation

Activity beyond

early adopters

Less than 5% of the

potential audience hasadopted fully

Second-generation

products, some services

Third-generation products,out of the box, product

suites

High-growth adoption

phase starts: 20% to

30% of the potential

audience has adopted

the innovation

expectations


The Hype Cycle has five phases:

Technology Trigger:The Hype Cycle starts when a breakthrough, public demonstration,

product launch or some other event generates press and industry interest in a technology

innovation.

Peak of Inflated Expectations:Companies that like to be ahead of the curve seek out the

technology and jump on it before their competitors. The suppliers of the technology boast

about their early prestigious customers, and other companies want to join in so they are not leftbehind. A bandwagon effect kicks in, and the technology is pushed to its limits as companies

try it out in a range of settings. Stories in the press capture the excitement around the

technology and reinforce the need to become a part of it or be left behind.

Trough of Disillusionment:Impatience for results begins to replace the original excitement

about potential value. Problems with performance, slower-than-expected adoption, or a failure

to deliver financial returns in the time anticipated all lead to missed expectations. Many of these



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Figure 5. Gartner Hype Cycle for Vehicle Information and Communications Technologies, 2007

TechnologyTrigger

Peak ofInflated

Expectations

Trough ofDisillusionment

Slope of EnlightenmentPlateau of

Productivity

time

visibility

Years to mainstream adoption:

less than 2 years 2 to 5 years 5 to 10 years more than 10 yearsobsoletebefore plateau

As of June 2007

Commercial Telematics

Satellite Navigation Systems

Bluetooth in Automobiles

Consumer Telematics

X-by-Wire Technologies

Remote-Diagnostic TelematicsConsumer DRM

Satellite Digital Radio

Fleet Tracking Systems

Collision-Avoidance Systems

Use-Based Vehicle Insurance

Terrestrial Digital Radio(HD Radio)

In-Car, Hands-FreeInput Technologies

Eye Tracking

eCall

Wi-Fi in Automobiles

Head-Up Displays

Traffic Data Services

Ultrawideband/Wireless USB

Public Telematics

Dual-View Displays

Car-to-Car Communication

Car-to-InfrastructureCommunication Haptics

WiMAX in Automobiles

Mood Recognition

Vehicle Information Hub

Natural LanguageSpeech Recognition




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Hype Cycles are a useful starting point for discussion and prioritization of technology candidates,

because their relative positioning and their "years to mainstream adoption" ratings contain implicit

assumptions that decision makers need to lay on the table. Some ETGs use Hype Cycles as a way

to structure a discussion about their innovation candidates with their executives. For example, one

ETG draws on the annual Gartner Hype Cycle report (which creates dozens of populated Hype

Cycles across information technology topics, applications, and industries) to create its own portfolio

of several hundred innovation candidates. It plots the most relevant on a snapshot Hype Cycle (see

"Toolkit: My Hype Cycle, 2009" for a tool to select and filter from 1,600 Hype Cycle technologies,

and create your own Hype Cycle). It then divides the chart into two parts: pre-Trough of

Disillusionment and post-trough (see Figure 6). For pretrough technologies, the team asks itself, "Is

there anything here we could be using for competitive advantage?" that is, where is it worthwhile

for the organization to move out of its comfort zone and adopt aggressively? For technologies

positioned after the trough, the team asks, "Is there anything here that we are not using? If so, was

that a deliberate decision (in which case it is OK), or are we missing something?" The insight from

these discussions informs the ETG's ranking and prioritization decisions.

Figure 6. Two Key Questions for the Hype Cycle

Expectations

Time

What's here that we're

not using? Was that a

deliberate decision?

What's here that we

could be using?


The Hype Cycle is also useful in explaining why the recommendations from ETGs may be different

from what companies are hearing or reading in the media. At the Peak of Inflated Expectations,

technology planners will caution: "Don't get caught up in the hype. Let's adopt it only if it is

strategically important to us. Otherwise, let's wait for others to learn the hard lessons." In the



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Trough of Disillusionment, technology planners will recommend: "Let's start looking at the

technology now because there are some solid products emerging and real-world experience about

how to use the technology." The key message of the Hype Cycle is that companies should not

invest in a technology just because it is being hyped, nor should they ignore a technology just

because it is not living up to early overexpectations.

5.4 Radar Screens

A radar screen focuses primarily on the timing of a technology's impact that is, it answers the

question "How long before I need to pay attention to this technology?" It uses the metaphor of a

pilot's radar screen, with the measure of distance replaced by time. Figure 7 shows a radar screen

that plots some of the technologies from the vehicle Hype Cycle in Figure 5. Some organizations

segment the sections of the radar screen to group different classes of innovation together for

example, by business/process/technology or by technology domain. The size and color of the items

on the radar screen can be used to convey additional information, such as the level of potential

benefit of each innovation or which candidates are recommended for follow-up.

Figure 7. Radar Screen With Information Extracted From Gartner's Hype Cycle for Vehicle Information and

Communications Technologies, 2007

Time to

Mainstream

Less Than

2 years to

Mainstream

2 to 5 Years

5 to 10 Years

More Than

10 Years

Mood RecognitionCar-to-Infrastructure

Communication

Use-Based

Vehicle Insurance

Head Up Displays

Collision-Avoidance

Systems

Car-to-Car

CommunicationEye Tracking

Traffic Data

Services

Satellite Navigation

Systems

Satellite Digital

Radio

Terrestrial

Digital Radio


Color can be used to highlight additional information, such as level of interest among various

business units. For example, by using various colors to show the number of groups that have

potential applications for an innovation or that have expressed interest in it (e.g., red for high

interest, green for low interest), the radar screen can act as a "heat map." High color intensity



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indicates a higher potential relevance and value for the candidate. A similar heat map approach can

be used with other graphical models as well as the radar screen.

Another factor that could be included to good effect on a radar screen would be the level of internal

disruption (to people, technology or processes) that the technology would bring. Highly disruptive

technologies need a longer lead time to evaluate and deploy, so adding this factor would highlight asituation where, even though a technology is further out in terms of target deployment, the lead time

is such that planning needs to begin soon.

5.5 Priority Matrix

A priority matrix is a version of a risk/benefit graph that highlights where to focus investment

resources. The vertical axis shows the expected benefitof the technology, while the horizontal axis

shows some measure of the technology'srisk. Candidates are placed in cells according to their risk

and benefit profiles.

Categories for the benefit rating are:

Transformational. Enables new ways of doing business across industries that will result in major

shifts in industry dynamics. It changes the game in some fundamental way.

High. Enables new ways of performing business processes that will result in significant revenue

growth or cost savings.

Moderate. Provides incremental improvements in established processes that will result in

increased revenue or cost savings for an enterprise.

Low. Leads to minor improvements that are difficult to translate into revenue growth or cost

savings.The risk rating can be made in several ways, ranging from a simple measure of the innovation

candidate's maturity (with low maturity indicating high risk) to a complex analysis of its multiple risk

factors.

In its annual Hype Cycle special report, Gartner creates a companion priority matrix for each Hype

Cycle, with the "years to mainstream adoption" value as the horizontal axis (where "less than two

years" to mainstream would indicate a lower level of risk than "Two to five years to mainstream").

Figure 8 shows the priority matrix for the vehicle information and communications technologies

Hype Cycle shown in Figure 5.



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Figure 8. Gartner's Priority Matrix for Vehicle Information and Communications Technologies, 2007


Figure 9 shows how to interpret a priority matrix. Candidates in the top left of the matrix deserve

high-priority investment. These technologies are likely to have high impact and reach a reasonable

level of maturity soon. Conservative (Type C) companies will probably limit their focus to this area.

More-aggressive (Type A and some Type B) companies are probably already using technologies

that will mature in less than two years. So they will be more likely to evaluate technologies farther to

the right or lower on the priority matrix, technologies that will not be widely used for at least five

years but that may provide a competitive edge in the interim.

Note that the potential benefit of a technology varies significantly from industry to industry and even

from company to company in the same industry, according to the business models or the goals and

plans of each. There may also be some intercompany and interindustry variation on the horizontal

risk axis, but usually less than on the benefit axis.



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Figure 10. Actions Resulting From a Priority Matrix Assessment

low

years to mainstream adoptionbenefit

moderate

high

transformational

more than 10 years5 to 10 years2 to 5 yearsless than 2 years

low

years to mainstream adoptionbenefit

moderate

high

transformational

more than 10 years5 to 10 years2 to 5 yearsless than 2 years

Evangelize

Pilot

Implement

Track

Evaluate

Leverage Ignore


The recommended action for each quadrant is:

Low-risk/high-benefit candidates should receive the most aggressive attention. These are the

"low-hanging fruit" that all parties can agree are worthwhile.

High-risk/high-benefit candidates should be evaluated to understand better their risks, benefits

and timing. This type of candidate can present major opportunities once the risks are

understood. It is also the type of innovation typically ignored unless there is a group specifically

dedicated to evaluating and eliminating the risks.

Low-risk/low-benefit candidates are generally left until there is a distinct need or request for theinnovation, or until continued nonadoption starts to increase the risk of being left behind.

High-risk/low-benefit innovation candidates are the lowest priority and are generally passed

over in favor of other opportunities.

5.6 Technology Scorecards

A technology scorecard offers a more detailed approach to prioritization. The scorecard provides a

format for assessing the relative value of the technology when weighed against the costs and risks.



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This technique is particularly suitable for prioritization of fully developed project candidates that

have already undergone some level of evaluation to determine more-detailed information regarding

benefits, costs and risks.

To create a scorecard (see Figure 11), the factors contributing to the potential benefit/impact of the

technology are enumerated and assigned a number (for example, one to 10, where higher benefitsreceive a higher number). Likewise, the factors contributing to cost and risk are enumerated and

assigned a number (where higher risks or costs receive alowernumber). The factors are then added

up, and the technologies can be ordered by rank. An even more rigorous scorecard would assign

different levels of importance to various factors, so that the score for highly important factors

counts more toward the final score than those factors that are deemed less important. However,

avoid overly complex weightings and algorithms because they can become opaque to stakeholders

(leading to loss of trust), lead to overconfidence in the level of accuracy and induce management

"gaming."

Figure 11. Rating Scorecard

Idea #1 Idea #2 Idea #XIdea #3

Business Objectives 8 7 88

Financial Objectives 5 9 53

Risk Factors 6 8 25

Score 27 27 2119

8 3 63Business Support

Select? Y N N N


Note that some risks may be so important that they overrule all other considerations. For example,

even a highly compelling innovation candidate with demonstrable business value can flounderbecause a single but crucial user opposes it, as shown in Figure 11 under the factor "business

support." (Note that this is the same principle as the cutoff threshold in a spider chart.) In such

cases, it is important to remove or negate the risk, for example by delaying adoption until another

test location with a strong champion can be found. Identify such risks on the scorecard, and note

the score below which they trump other factors.



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5.7 Balancing the Portfolio

Before making the final selection of which technology candidates to pursue further, some ETGs add

a step to ensure that their portfolio of successful candidates is balanced. It may turn out, for

example, that most of the candidates are focused in one area of the business. Progressing with all

those candidates might overload that area's capacity for change and also upset people in otherareas that feel neglected. Or the candidates might all tend toward high risk or low risk, toward long

term or short term, toward one geographic region, or toward some other distortion.

One way to achieve a balance is to divide the portfolio into distinct categories and allocate each

category a percentage of the overall portfolio. For example, with respect to benefit, the categories

ofrun the business,grow the businessand transform the business can be used as follows:

Run the business applies to technologies that help things run smoothly. They are usually (but

not always) relatively mundane, low-risk technologies with a fast but low-value return. Typically

around 20% to 30% of new technology projects fall into this category, although the percentage

can be significantly higher among companies with a less aggressive enterprise personality, orwhen operating in an economic downturn when transformational innovation may be viewed by

executives as less desirable.

Grow-the-business technologies are those with clear and substantial potential to help the

organization improve its performance. They involve moderate risk, and pay back well within the

framework of how the business traditionally operates and makes investments. These are usually

the backbone of the emerging technology portfolio and should make up around 40% to 60% of

all candidates.

Transform-the-business technologies break the mold. They force reassessment of how the

industry works, or challenge some aspect of the current business operating model. They might

make up 10% to 40% of all candidates, depending on how eagerly the organization pursuesradical change.

A benefit of segmenting the candidates in this manner is that it is easier to compare like with like. By

setting aside a portion of the budget for technologies that may transform the business, for example,

it is no longer necessary to compare a high-risk, high-return undertaking with one that is a sure but

small win.

Another aspect of managing the ETG portfolio lies in balancing the reactive response to the "pull" of

business requests for help against the proactive, "push" activities of understanding technology

innovation ahead of business needs (see "Combine Push and Pull Innovation to Achieve IT

Innovation Success"). Depending on the culture and enterprise personality of the organization, and

on the mission and goals of the emerging technology activities, the portfolio may be a relativelyequal mix of the two sources of candidates, or may be strongly biased toward one source. In either

case, it is essential that both are represented to some degree. Without dedicated effort, the high-

risk/high-benefit candidates in the top right of the priority matrix will not be "pushed," and

opportunities will be missed. Without being responsive to the needs of the business, an ETG will be

viewed as too "ivory tower" and most likely disbanded.



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Technology requests from the business units and executive management (i.e., the "pull") often

involve a less formal ranking than those that are initiated by the ETG. Projects are typically

prioritized by considering a combination of the status of the requester, the amount of time required

to fulfill the request, and the extent to which the topic aligns with the ETG's strategic tracking

activities. For example, a short project for the CEO would inevitably receive high priority; a business

unit looking for time-consuming su

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