THE HIGH-TECH RISK

The challenge for people and companies as such, is how to prevent getting in deep with technology without completely neglecting it.

LAMIKA ZUBERI, Writer is an IT consultant
June 26 - July 02, 2006

In the corporate arena and also in or daily lives falling behind in technology is quite a bad idea. But getting out in front is also a bit risky and not so smart either.

A German company called Vitaphone recently brought out a new cell phone with only three buttons, each intended to allow an elderly user to speed-dial an emergency contact. It's a clever idea with a potentially big market. But what I like about the phone is that its main appeal is that it has less, not more, functionality than everything else on the market. The three-button cell phone also had people wondering: Is it a high-tech product?

The answer, of course, is something along the lines of may be. But you do not hear much about sort of high-tech stuff. Instead, most things are pigeonholed as either high-tech or low-tech--a false duality that ignores the fact that to thrive, nearly all businesses need to reside in a zone best characterized as medium-tech.

We all know that companies that resist new technologies risk giving their competitors the edge in creating better, more efficient products and services. No one wants to be left behind because of a dumb or shortsighted tech decision. Unfortunately, many entrepreneurs overcompensate for these fears and wind up underestimating the risks that are part and parcel of technology or assuming that technology is a business solution in its own right. Take for example, Mercedes that in 2002 proudly led the auto industry into the brave new world of computerized brake systems. These brakes would take over the drivers duty in case of an emergency. No one ever thought of something like this and no one ever asked Mercedes for this feature. This system did not work so well for Mercedes, in terms of increasing its sales.

The challenge for people and companies as such, is how to prevent getting in deep with technology without completely neglecting it. Even putting up new softwares, like installing a computerized billing system, can be very complicated, and the multifaceted efforts can fall apart into really expensive nightmares. Any effort to implement new technology becomes high-tech if you have not done it before. The brighter way of doing things here, is to manage the technology risk the same way loan officers and mutual fund managers manage financial risk-by spreading it around. It is intelligent to assume that your technology decisions are quite like a stock portfolio. You should want to think that your technology decision is risky in some areas but not all areas. There is no such a thing as a new technology with no risks involved

A lot of the times, you have no choice but to be innovative. But if it is not high-impact, and you can buy the technology somewhere else, that is the way to go. To do so, one company went to the trouble of acquiring a software developer that was already working on similar technology somewhere else. A year later, that company had a software program 5% the size of others, which was simple and user friendly with less complexity. That company is enjoying continuous revenue growth and is now making profits.

Some companies start investing a lot of money in building high end softwares without looking at the market scenario or analyzing the market trends. The need therefore, before building any software is to focus on the market trend: are factories buying ERP solutions, have they started relying on process automation and are they in a stage where they can take to change management. Some companies are not wise enough to research enough and begin to build a very expensive and high end software like an ERP for which the market is rather dry. There are very few companies in Pakistan that would trust a locally built expensive solution without trying it out free of cost first.

A good way to stay safely medium-tech is to do what Vitaphone did and focus on less feature-rich versions of high-tech products. But that is no simple task. A clever enough marketing twirl, as with the emergency cell phone, may also do the trick, but more often getting customers to buy a less advanced product requires a sharply lower price and lowering the cost of a high-tech product can be a technology feat. For that matter, Vitaphone is not placing all of its bets on a three-button cell phone. It is also throwing some high tech into the mix, producing phones that integrate a GPS chip so that emergency response crews can pinpoint a caller's location, and even a built-in heart monitor for a fast reading in the case of a cardiac event.

Manufacturers and tech-developers in Pakistan should look towards simple solution building that have an appeal in the market. Lets take for example of the Desert Cooler which uses water and a fan, used in Punjab a lot. It is built as a substitute for a regular AC for cooling, it gets the job done, it uses simple technology and it sells good.

So if you want to build soft wares look for the clients first, and built according to their needs. An off the shelf product in Pakistan can never be successful unless it is very focused, e.g. an accounting software, a shipping software, or a retail software. This is due to the fact that the average size of the Pakistani business is small. There are small owners that need specific solutions and there is no one catering to their needs because most of the software development companies are sitting with high-end expensive software products and working hard towards making a sale.

It is as such always wise to keep in the middle order to reduce the risk factor. The ideal thing to do is to bring out a simpler version of an already complex solution and to have a lower price on it. This will also give you a good marketing pitch.