Rates of Change

Rates of Change

To illustrate how scenario planning can be applied to IT issues, veteran technologist Steve Andriole and scenario planning expert Paul Schoemaker sketched out some quick scenarios. Schoemaker is research director of the the Wharton School's Emerging Technology Program. Andriole is the former CTO at CIGNA Corp., and the founder and CTO of Bryn Mawr, Pa.-based TechVestCo.

Approach: We put ourselves in the position of a CIO of a large, established firm—involved in anything from insurance to healthcare to server manufacturing—where technology is critical to the business. Then we asked, "How can we get a handle on future investments based on the environment in which we expect to compete in the next two to four years?"

Key Trends: We asked, "What are some of the long-term trends affecting the company and its consumers?"

Pervasive computing. This involves everybody having devices connected to the Net and to each other. The main uncertainty is how fast this will develop.

Privacy concerns. Pervasive computing raises concerns about who gets access to data about consumers, and that will increase the pressure for regulation.

Greater importance of security. To match the growing computing pervasiveness and privacy worries, IT professionals will need to invest in and worry more about the integrity of financial transactions, medical data and other security issues.

Such trends specific to an industry or company should be present in any scenario. What sets the scenarios apart is the way in which these trends play out.

Key Uncertainties: Next we took a look at the key uncertainties that could effectively alter the rate of change or the direction of the key trends.

Consumer acceptance of the technology invasion. To what degree will people embrace new technologies at home, work and play, and give over their lives to it?

Adoption of common technology standards. Will XML, Wi-Fi and similar technologies become the common standard? Will the world move toward open or proprietary platforms?

New killer applications. What's next after ERP and CRM? A new generation of business tools could facilitate more seamless and responsive technologies that help companies better serve consumers and clients.

Health of global economy. This is one example of the macro uncertainties that should be considered in a scenario process.

Create Scenarios: The most common technique for building scenarios is to compare the most important trend with the most important uncertainty. But when we stepped away from this problem a bit, we decided to consider the uncertainties as a cluster. The first three are fundamentally about adoption of technology by consumers and businesses. That seemed a reasonable basis against which to analyze the trends. Once the scenarios are roughed out, we can layer in macro factors, such as the last, and ask: "What is the economy likely to look like in each scenario?"

Three Futures for the Business of Technology(see figure)

New Business Model
Consumer behavior is changing rapidly and so is technology,opening up new opportunities for business. This is what the world might have looked like if wireless has taken the world by storm with a common standard across all platforms.

Seamless Communication
Consumers eagerly snap up new devices and communication technology in part because of better integration between devices. Expect continued technological advances, but these will be evolutionary, not revolutionary.

More of the Same
You could also call this scenario "gradual change." Consumer acceptance and technology evolve at their current pace. Would the economy boom in an environment like this? Probably not.

This article was originally published on 06-01-2001
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