With technology changing rapidly, businesses face the need for technology transformation. But, the type of tech transformation that works superbly for one company, might not work well and could even be disastrous to another. This can be true even if both companies are in the same industry. It also applies to high tech companies, since despite their strong technological capabilities, they must still make strategic choices about which new technologies to sell and specialize in.
Thus, regardless of the industry, companies need to think through what they will do regarding their technology transformation. Most businesses benefit from adopting the more basic newer technologies such as virtual communications using Zoom or something similar, especially during the pandemic. But when investing in major technology transformation, businesses need to think through which new technologies are right for them to pursue and why. Merely following a trend is not the answer if it is not right for a particular company. And even huge, prestigious, high tech companies can make mistakes.
A recent example in the news is IBM’s experience with Watson Health, which was IBM’s new venture into health analytics and AI (Artificial Intelligence). In its earlier days, IBM’s Watson technology was publicized by having it compete with humans playing the popular TV show game Jeopardy. Of course, Watson won since it used volumes of information that a powerful computer with sophisticated algorithms can easily access. But, despite the publicity victory, Watson Health did not end up working out all that well from a business perspective for IBM.
The Wall Street Journal’s January 22-23, 2022 issue ran the article “IBM Sells Its Watson Health Assets to Investment Firm as It Refocuses” by Matt Grossman. The article said, ”The deal is the latest step by IBM to refocus its business around the cloud.” According to the article, “IBM had big aspirations for its Watson artificial intelligence to help in medical research and improve patient outcomes, but the technology’s impact has fallen short of early hopes.” As the article explains, “IBM has been reshaping itself around an emphasis on cloud platforms that can serve companies across industries.”
As someone who has been researching business success and failure patterns for 25+ years, my view is that the cloud is a far better fit for IBM than Watson Health. For IBM, a cloud emphasis builds on its strengths, while a specialized application like Watson Heath does not. However, IBM is a latecomer to cloud emphasis. And, unlike IBM’s cases of late entry years ago, this time the competition is other huge high tech companies with vast resources. This not a case of the huge IBM coming late to compete with smaller companies that lack the tremendous resources IBM can bring. So, unlike its late entries years ago, IBM doesn’t have the advantage of being a much larger competitor with the cloud. Nonetheless, the cloud is a better fit for IBM’s historical strengths than is Watson Health.
So, in conclusion, high tech transformations need to be right for the company. Whether a business is high tech or low, it’s important to think through what kind of technology transformation is a good match for the company. Not every new technology should be pursued the same way by all businesses. Successful technology transformation requires wise strategic choices.
