Why Technology Matters

Technology is always changing, offering new opportunities and risks for business every single day. Netflix captured huge opportunity through utilizing online streaming services and redefining the TV and movie industry (many organizations went out of business as a result, encountering the risks of technology). This type of technological opportunity is often referred to as a disruptive innovation.

Disruptive Innovation

Disruptive innovations rapidly improve the overall performance (fulfillment of the user's needs) in a fraction of the time normally required to improve organically through efficiency. Netflix disrupted the movie and TV market through rapidly improving the experience in a short amount of time.

Disruptive innovation is illustrated in this image as a chart, with time being on the x-axis and performance on the y-axis. While most progress is slow, slightly improving performance over time, disruptive innovation rapidly increases performance in a fraction of the time. This is a great opportunity for business, as well as a great threat.

As a result, business are constantly monitoring current and emerging technologies to capture opportunities and avoid enormous risk to keep pace with the demands of the modern economy. 

How Technology Impacts Business

By looking at how business IT strategies are structured, we can identify why technology matters through considering the state of technology from various perspectives. Without diving into too much detail, here are some key building blocks to integrating the state of technology into an organization's strategy:

Internal Capabilities

Technology is the great enabler. Nowadays, integrating technological tools to execute complex tasks is the norm. These integrations impact every facet of the organization. On the manufacturing floor, smarter machines can reduce production time, increase efficiency, and lower costs. In marketing, online tools can enable rapid iterative testing of creative assets and utilization of social networks. Keeping pace with the latest technology for organizational efficiency is key to competitive success.

External Forces

Technology changes the expectations of consumers and as a result businesses must keep up to remain relevant. Having a presence on Facebook, for example, is an external technological force that companies have had to integrate into their process. Another example is the auto industry, where both consumers and governments expect (and sometime requires) businesses to adopt new, expensive technology to reduce carbon footprints.

Opportunities

Identifying technologies that could cut costs, improve productivity, capture new markets, or fulfill new needs for consumers is a constant focal point for technology specialists. Identifying opportunities before they become competitive risks is a key to survival in the modern business world.  

Threats

Closely related to the opportunities above, there is always the threat of falling behind the current state of technology (such was the case with streaming media). Another threat in the modern digital age is security. Target was recently hacked, incurring a massive leak of customer data. This can be costly both from a legal perspective and from a branding perspective. 

Conclusion

All and all, the current state of technology is always evolving. What's most important to keep in mind is the general perspective a business owner or manager must take when considering technology. Technology can be an enormous source of competitive advantage, both for your organization and your competitors.