Risk avoidance in strategic technology adoption

Abstract

Purpose Organizational technologies can be classified according to the roles they play as either commodity or strategic. Commodity technologies support common operations, while strategic technologies address perceived threats to competitiveness, often identified by strategic foresight. These must go through an adoption process before playing an effective role in strategy execution. The adoption process includes known activities, ranging from sourcing (itself from in-house development to turn-key acquisition) to operational integration. This paper aims to reveal strategic technology adoption risks that arise during strategy execution. Design/methodology/approach A gradually developed causal loop diagram model, supported by general literature, introduces three general classes of technology adoption risks: mismatched requirements, supplier dependence and unmanaged life cycles. Findings Rather than managed, these risks are incurred or avoided depending on decisions made during the adoption process. Research limitations/implications Despite the scarce literature coverage for the approach, examples revealing the presence of adoption risks are nevertheless available in the well-documented history of enterprise resource planning (ERP). Practical implications Although ERP is presented as a general-purpose strategic technology, the unique business features of maritime container terminals pose serious challenges to its adoption, which provides additional support to the discussion and reinforces the conclusions. Originality/value The approach to identifying risks in strategic technology adoption departs from the current risk paradigm in two significant ways. First, it emphasizes policy decision-making rather than external events. Second, it views risks as systemic rather than occurring independently.