Disruptive technologies can be catalysts for positive change. It takes project managers to set the right course.
BY STEVE HENDERSHOT
So when project managers hear about breakthrough tech—advanced robotics, autonomous vehicles, cloud computing, 3-D printing, mobile-facilitated modes of communication or new energy-storage devices—their gears start turning. They evaluate each technology not only in terms of its potential impact, but also for the difficulty and cost of implementation, and the effect on processes already in place.
“The pace of change in today’s market is accelerating” thanks to technological innovation, says Rick Bell, PMP, founding director of the Melbourne, Australia-based mobile consultancy Worklife Mobile. There’s no question this change will impact organizations and their portfolios: A May 2013 McKinsey report identified the top 12 disruptive technologies and estimated their combined economic impact as high as US$33 trillion by 2025.
“Like all things that are new, the key questions to be answered are at what point do you jump in, and to what level?” Mr. Bell says. “Do you go in early with all guns blazing, or sit on the sidelines and let the pioneers take the early hits?”
For organizations, there are merits to both approaches. Early adopters benefit from new technology by being first to market. They get a reputational boost from being associated with cutting-edge tech. And if the technology becomes an industry standard, they have the momentum to stay ahead of the competition.
A classic example is Apple Inc.’s 2007 project to develop the iPhone, estimated to cost US$150 million over 30 months. By incorporating robust Internet connectivity and the ability to measure movement and multi-touch gestures, the elegant and user-friendly design of the iPhone set the standard for mobile computing. Though competitors have since adopted identical features, it took years to eclipse the early innovator.
On the flip side, organizations that adopt a wait-and-see approach can benefit from early adopters’ mistakes, watching and learning from their struggles and letting the kinks get worked out. If a promising innovation turns out to be a dud, they’ll have saved time and money by not buying in up front.
So what is the best path for portfolio success? It’s not a choice between betting on new technology and sticking to existing strategies and processes, says Mr. Bell—rather, it’s doing both at once.
He advises organizations to continue to defend and extend existing offerings, while also operating a makeshift research-and-development lab that focuses on pilot projects and uses developing technologies. “That will allow companies to evaluate the technology’s potential to create new options for future growth,” he says. This strategy lets organizations continue to grow through traditional means but also “have an early stake in the game should the new technology prove its importance as a new competitive differentiating factor.”
ON THE FENCE
When it comes to disruptive technologies, project managers sometimes face indifference from their sponsors. The very same client that wants a new technology may not be able to provide a coherent, tightly defined set of project specifications. This presents a daunting but not insurmountable problem.
“Sometimes our clients don’t know what they want,” says Parminder Sohal, PMP, managing director of mobility and cloud solutions for Global Executive Council member HP in Winnipeg, Manitoba, Canada. “They say, ‘I want something like this,’ but they can’t articulate it or define it because the technology is such a new thing.”
HIGHEST ESTIMATED IMPACT
In May, the McKinsey Global Institute identified the 12 disruptive technologies most likely to transform business and the global economy. Here, a project snapshot.
MOBILE INTERNET: As incomes rise and smartphone costs decrease in developing nations, mobile applications and digital penetration are expected to skyrocket. In Bangladesh, when Dutch Bangla Bank Limited’s mobile-payment project launched, it garnered more than 1 million subscribers in less than 10 months.
AUTOMATION OF KNOWLEDGE WORK: In a man-versus-machine showdown, machines scanned more than half a million documents at Clearwell Systems, which analyzes legal documents for pretrial discovery. During the three-day project, the machines were able to pinpoint 0.5 percent of documents relevant for an upcoming trial—a task that would have taken the company’s lawyers several weeks.
INTERNET OF THINGS: Pervasive computing is only expected to get more, well, pervasive, as networking costs fall and sensors become more sophisticated. FedEx’s SenseAware program allows customers to place into any package a smartphone-size device loaded with a global positioning system and monitors for temperature, light and humidity. The data-rich tracker opens new frontiers for those customers shipping sensitive electronics and biological products, and could revolutionize how companies manage complex supply chains.
CLOUD: Automaker Mercedes has launched a project to develop a cloud-computing platform to offer in-car entertainment services. The project is slated to finish in 2015.
ADVANCED ROBOTICS: As part of the Defense Advanced Research Projects Agency’s Virtual Robotics Challenge, defense contractors in July unveiled one of the most advanced humanoid robots ever: It’s able to climb stairs, navigate an obstacle course and stay upright when slammed with weights.
AUTONOMOUS VEHICLES: Google’s driverless-car project has logged more than 500,000 miles (804,672 kilometers) so far with only one accident—caused by human intervention.
The solution: rapid prototyping. His teams work quickly to outline possible solutions, then share them with clients. If clients think they’re on the right track, the teams keep going. Otherwise, they head back to the drawing board, continuing to prototype until the client signs off on an idea. Then they develop a more traditional, tightly defined set of project requirements.
Part of the project manager’s job is to sell the vision to wary stakeholders. “When everyone is enthusiastic, they’re better able to cope with the learning curve,” says Martin Castellan, PMP, who runs Toulouse, France-based Sud Media.
Even when disruptive technology isn’t the focus of a project plan, he recommends deploying it behind the scenes to save a project time and money, while keeping team members in the know. Advanced mobile computing and cloud-based solutions, for instance, let teams with far-flung members work closely together.
“The project manager who’s managing disruptive technologies has to understand how a global agile framework works,” Mr. Sohal says. “You have to have the communication infrastructure in place so that, even in a virtual environment, the team is working quickly but everyone understands what’s going on.”
REINING IN RISK
When organizations decide to incorporate new technology, the task for project managers is to help them determine how. Project managers love specifics. They thrive on requirements and measurables and deliverables because those are variables they can control. Emerging technologies often defy these traditional measurements and processes.
“If you have a new development project, there’s a lot more risk involved,” says Erik Jensen, PMP, a project manager for Northbrook, Illinois, USA-based insurance company Allstate. “If there’s a new technology you’ve never worked with before, you have to account for added risk into your timeline.”
New technologies are unpredictable. And project managers are valued in part for their ability to accurately predict how well and how quickly they complete projects. They understand the degree of chaos a new technology can introduce to a project’s scope and timeline, complicating a coherent, tightly defined set of project specifications.
To minimize the friction, Mr. Jensen recommends employing three-point estimating, asking team members for three types of time estimates for each task on a new-tech project: optimistic, pessimistic and realistic. He then takes an average of the three responses and uses that number in his projections.
“You just have to account for increased risk,” Mr. Jensen says. “You can’t be reliant on your estimates as you would normally.”
Mr. Sohal handles sponsors who want to incorporate disruptive technologies by knowing their needs before they do. At HP, he deals with many large clients that tend to move slowly on decisions to implement new technology. However, once they determine a particular technology is worthy of investment, they expect the project to move very quickly. To avoid project management whiplash, Mr. Sohal begins R&D work with new technologies before they’re requested.
“We’re going to go to our client first and say, ‘This is where you are today,’” he says. “This is what the competition is doing. And to stay ahead, this is where you need to go.’”
The client’s competitive position in the market, not the promise of a cutting-edge technology, should be the determining factor, he cautions. “We used to make something in our shop and say to our client, ‘Here it is. Buy it because it is the best.’” Now HP consultants determine what a given client will need to stand out in five years; that plan is compelled by business strategy, not raw technical possibility. “The drivers now are from the business side,” Mr. Sohal says.
There’s no cut-and-dried formula for whether to incorporate emerging technologies. Developing a smart strategy for evaluating and implementing them can help both organizations and project managers respond effectively to market innovation. PM
LOWEST ESTIMATED IMPACT
NEXT-GENERATION GENOMICS: Interpret-Omics recently developed a platform used by experts to aggregate and structure genomics and biomedical data. That analysis is driving projects as diverse as boosting the immune system of fungus-vulnerable crops to quantifying the pathways used to treat cancer.
ENERGY STORAGE: In May, Pacific Gas and Electric Company, San Jose, California, USA, kicked off a battery energy-storage system pilot project that will automatically balance the energy grid’s needs by using a utility-scale sodium-sulfur battery. The battery will charge when demand is low and send reserved power to the grid when demand grows.
3-D PRINTING: Researchers at the Fraunhofer Institute for Manufacturing, Engineering and Automation in Stuttgart, Germany recently launched a project to build a propulsion system that mimics the movement of an octopus fleeing its attacker underwater. To construct the propulsion system, researchers used fused deposition modeling with a 3-D printer.
ADVANCED MATERIALS: From self-cleaning ceramics to metals that can revert to their original shape to nanoparticles with enormous strength, advanced materials are driving projects from solar cells to pharmaceuticals. The artificial production of graphene—a nanomaterial with incredible strength and conductivity—has spurred projects like IBM’s creation of the first graphene-based integrated circuit.
ADVANCED OIL AND GAS EXPLORATION AND DISCOVERY: North American oil production could jump 100 percent to 200 percent by 2025, according to the McKinsey report, driven by advances in hydraulic fracturing and horizontal drilling. Pioneer Natural Resource’s project to switch from a vertical well to one drilled horizontally allowed the Irving, Texas, USA-based company to pull forward 140,000 barrels of oil equivalent in six months—rather than the standard 35 years.
RENEWABLE ENERGY: Over the past 20 years, the cost of power produced by solar cells has dropped to one-tenth its price of nearly US$8 per watt of capacity, according to McKinsey. That radically reduced cost is helping projects like the Bangkok, Thailand-based Institute of Technology Ladkrabang’s five-year initiative to launch solar cells in rural regions.
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