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Technology Adoption

Whitepaper 1.0: High-Tech Adoption

Adoption of B2B technology is highly complex and it varies greatly between industries. For example, financial services boasts the highest adoption of IT automation with 43%, whereas the education sector has the highest adoption rate for 3D printers (37%). However, government organisations are very resistant to change and have low adoption rates for most emerging technologies. The State of IT report 2019 investigated the emerging tech trends being adopted by organisations. From this research they were able to show the top technologies being adopted by region and company size. The following diagram demonstrates the adoption rate of European medium-sized organisations.

From the information provided, the highest rate of adoption is IT automation and Gigabit Wifi. The research also concluded that smaller businesses are slower to adopt emerging tech compared to their larger counterparts.

Key Theorist in Adoption Trends

A number of models and frameworks have been developed to explain user adoption of new technologies. Each of these introducing new ideas and factors that could affect user acceptance and different strategies to increase user adoption. 

Crossing the Chasm

One of the most recognised theories on technology adoption is ‘Crossing the Chasm’. The technology adoption life cycle was first introduced by Geoffrey Moore. His theory suggests that the entire market can be represented by a bell curve like the one presented below. This market is broken down into sections based on how inclined these customers are to adopt new technology.

Early adopters are core to opening up any high-tech market segment as they act as an agent for change. They have the foresight to see the benefits of adopting new technology and are eager to test new innovations. Although integral to word of mouth and case studies, this target market is more likely to approach new technology companies on their own, so less resources need to be dedicated to attract them. Moore believed that the most difficult transition was between the early adopters and early majority which he refers to as ‘the chasm’. The aim of high-tech companies needs to be bridging the gap or ‘crossing the chasm’ in order to enter the mainstream market.  An early majority customer wants to buy a product that will improve productivity over their current operations. However, to appeal to the early majority a breakthrough technology is required that has compelling functionalities. Moore suggests that the fundamental principle for crossing the chasm is to target niche markets as a point of attack and focus all resources on achieving dominant leadership position in the chosen segment.

Moore also investigates the types of products and how they impact the market and breaks all products into 2 categories; continuous and discontinuous. Change sensitive products are classified as discontinuous as they are disruptive and require customers to change their behaviour in one way or another. Whereas continuous products are classed as an upgrade that doesn’t require any drastic change. High-tech industries tend to always be discontinuous as their innovations aim to disrupt the norm.

A high-tech B2B company needs to establish a target audience where they can provide substantial value to, alongside one where there is potential for growth.

The survey represented in the diagram shows that healthcare and transportation would be great entry markets as they have the lowest deficit between expected and actual investment. However, this is all dependent on trends and some industries are more likely to invest in a particular type of technology compared to others, depending on the applicability to their operations. For example, a transportation business is much more likely (2% surplus) than healthcare (10% deficit) to invest in IoT technology. A company needs to conduct market research to understand where their product has the most value and make this their target focus.

Status Quo Bias

Behavioural economist Daniel Kahneman came up with the concept of Status Quo Bias. The theory examines the buying behaviour that views change as risky. So, unless a business has a compelling or immediate need to change, they will just stick to the status quo. This is particularly relevant to the technology industry as unfamiliar systems and interfaces are a huge sticking point for those unwilling to change. Although it is good to demonstrate a value proposition to overcome this bias, a business needs to make customers realise how the status quo is unsafe and there are actually more costs and risks to inaction than they are in action.

Technology Acceptance Model (TAM)

Fred Davis repurposed the TRA model in 1989 to create TAM. In this theory, Davis notes that there are two primary factors influencing an individual’s intention to use new technology; perceived ease of use and perceived usefulness. If we apply this theory to the B2B technology market, a business would need to demonstrate the interoperability of their systems and its ease of application. Alongside this, they will have to provide information on its core benefits and case studies showcasing previous success.

Disruptive Innovation Mode

Another relevant theory that can be applied to the emerging technology sector is the Disruptive Innovation Model created by Clayton Christensen. He describes disruption as the process whereby a smaller company with fewer resources is able to successfully challenge an established incumbent business. Entrants that prove disruptive begin by successfully targeting those overlooked segments, gaining a foothold by delivering more-suitable functionality. All new emerging technology suppliers should aim to be disruptive; they should focus on B2B markets that are not being fully serviced by the large players and ones where they can provide a substantial difference to.

Base, Key and Pacer Technologies

Erikson et al. proposed that technology could be divided into 3 types: base, key and pacer technologies. Key technologies are ones which are critical because they provide sources of competitive advantage, whereas pacer technologies can be expected to evolve into the key technologies of the future.  All of the emerging technologies entering the B2B marketing should aim to become a key technology by presenting their USP and key differentials that will enable their customers to achieve a competitive advantage. Content marketing will allow B2B technology companies to explain key differentiators in detail and case studies to demonstrate key figures on the level of improvement their clients have seen by integrating their technology.

Each of these theories has its place but you need to apply to most applicable theory to your business plan and determine where you fit and how it will impact adoption. Consider the following; Are you targeting towards a niche audience? Is your technology compelling enough to evoke an immediate change?

03rd Jun 2020

Whitepaper 1.0: B2B Buyer Challenges

Adoption of B2B technology is highly complex and it varies greatly between industries. For example, financial services boasts the highest adoption of IT automation with 43%, whereas the education sector has the highest adoption rate for 3D printers (37%). However, government organisations are very resistant to change and have low adoption rates for most emerging […]

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