There are some truly amazing emerging technologies out there. AI and chatbots. Blockchain. Cryptocurrencies. Augmented reality, virtual reality… we’re all in a new kind of reality.
Enterprise companies don’t want to leave these technologies in the hands of the startups that will disrupt them. But is is a huge challenge even for experienced CIOs to get a handle on how to bring these technologies in-house, integrate them with legacy systems and beat the competition.
Why startups have the edge with implementing edgy technology
Tech startups with a team of 10 or 20 can work in an agile way to rapidly disrupt entire industries. Let’s say they need to adopt a new software tool into their processes. They want to use a messaging app like Slack. It’s really no problem for them to change things up from Friday to Monday. “Here’s where you click the link” is all the direction an IT overlord needs to give for this kind of rapid adoption.
But let’s take the example of a bank with 10,000 employees. At that scale, you need to make sure that literally all employees are on the same page. They need to have training so they’re working with the same toolset.
Otherwise you’ll wind up with silos where some personnel are using one tool and others another, with different departments unable to talk to one another. You need to set aside money, time and resources to make that happen.
How can enterprises integrate emerging technologies? First, roll up your sleeves…
It’s going to require a lot of research and planning for implementation. How much is “a lot?” Look at how many billions of dollars IBM spent to integrate Watson AI. This is an impressive bit of technology, that is supposed to be able to answer any questions you have. It is leading edge technology with an army of people behind it. Despite that, it is still difficult to deploy, even for a company like IBM.
Some enterprises trying to work with emerging technologies will go for a hybrid system. Think of the banks who are spending billions upgrading their legacy IT systems. They’re also spending billions to maintain technology well beyond its “best before” date.
But they’re buying up fintech startups, so they can be agile in their product offering (Think of the AI-powered chatbots Finn.ai builds for banks). ihook up AI-driven chatbot. In this way, they can go to market with an innovative product.
The biggest factor for enterprises integrating new technologies: risk management
In my experience working with enterprises and integrating technologies to move the business forward, technical capabilities are not really the biggest hurdle. If you need sophisticated hardware, you can buy it. If you need smart people to build it, no problem. They’re out there. And for enterprises, they have the resources to invest in it.
Risk management is much more important. Because if you don’t manage the risks, the losses can be catastrophic.
Imagine a small startup, again. A small company deploys a new technology without knowing whether customers will want it. They’ll need revenue somewhere in the millions, or tens of millions of dollars to justify the cost of development. Losing millions on a bad bet would be bad — and possibly lethal to the startup, but would not necessarily be a catastrophe for the wider world.
If an enterprise deploys new technology, they may need to spend billions of dollars to justify the outlay of resources. That scale makes a big difference. If it fails, sure, heads will roll… but not just an executive or two. We could be talking about major layoffs, hundreds or thousands of people out of work, damage to the brand reputation… You get the idea.
How a CIO can be successful with emerging technologies
Enterprise companies didn’t become major players by ignoring technology or avoiding risks. But as a company scales up, risk management just becomes more important. A good CIO needs to be able to ‘speak business’, helping the leadership team understand the actual business need for the new technology. They have to explain the risks as well as the rewards — and have a plan in place for if something goes wrong, so they can make it right.
Vaclav Vincalek is the Founder & CEO of PCIS. This article originally appeared on LinkedIn Pulse.