The best tech investment I never made: Four CIOs' tales

Sometimes not adopting a hot new technology is the wisest business decision you can make

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The Vendor Is Unproven

Many of today's most innovative new products are created by small, entrepreneurial companies. That's great news for the American spirit of innovation, but working with startups can make an enterprise CIO nervous. "In one case, we were going to be funding 100% of a company's payroll," Weeks recalls. "We had to wonder, 'Will they have other companies that use it, or are they going to go out of business as soon as we stop writing checks?'"

If that happened, the company might have been left with a great product, but no support or continued development. "There are ways around that. For instance, we could have said that as part of our agreement we could take over the source code if that happened," Weeks says. "But having developers work on someone else's code is very painful."

Weeks and his team decided to pass on the new product, and when they did, he recalls, "I remember the [vendor's] CEO saying, 'I'm going to call you once a week until you buy our product,' He only called for about three weeks." Sure enough, about a year and a half later, the vendor went out of business. "It was a company that wasn't solid from a financial perspective, even though they had a great product," Weeks says.

And even if the vendor offering a new product is on solid footing, switching away from a vendor you have a long-term relationship with can be risky. "You have to look at your partnerships," Weeks says. "Bringing in a new vendor will have a benefit in the short term. If you're looking at other products, your long-established vendors will be on their toes -- they won't want you going to that product. But if you do it, will they be upset? If you were a high-profile client for them, you might not be as high-profile anymore. You might get less attention, less focus and less expertise. I'm not suggesting you should base your decision solely on that, but it's something to consider."

We're Not Ready

Sometimes, both a product and its vendor have proven track records. It might be clear that this would be a solid investment -- but your organization might be unprepared to take advantage of it. Recently, Jason Cohen, CIO at New York-based Diversified Agency Services (DAS), considered a move to the public cloud. But he eventually decided that DAS -- a holding company for more than 190 of the world's largest advertising agencies and communications firms -- wasn't ready.

"Our companies all have different IT footprints and different processes and procedures, so we determined there was a significant risk in moving to the public cloud," Cohen notes. "We realized we aren't mature enough for the move, whether for storage or email. Instead, our determination was, 'Let's build the best technology we know how and aggregate our IT approach. And then we may be ready later on.'"

Before adopting a new technology, Meilen says, it's important to determine whether your IT organization can take on all the tasks that an implementation would require. "If it's a small or young [vendor], do I have the skills in my organization to engage with them?" he says. "There are capabilities a large, well-established tech company would bring that a smaller startup won't. I'll have to supplement those. I'll be teaching a young company how to come to market in the enterprise space."

We Can't Handle It

Even if a technology is perfectly ready and could be perfectly useful for an organization, it may simply be something that IT can't take on. "I've been a CIO for 13 years, but in the recent past, it's become like the I Love Lucy episode in the candy factory," Roberts says. "There was a time when new technologies and new ways of doing things came along at an acceptable pace. I could take the time to make a thoughtful decision whether to invest in them. Now things are at such a rapid pace, I find myself making decisions not to invest in this, or to stop doing that."

Getting these calculations wrong can have dire consequences. "One company decided to make a $10 million investment in SAP over three years," Weeks recalls, of a former employer. "They were going to take it out of the operating budget, rather than finance it. The company was in a cyclical industry and the second year, it hit a recession. It wasn't going to make any money that year. They fired the CIO, saying, 'It was a bad decision to start this project when you did.'"

This happened not with an unproven newfangled idea, but with a solid technology that would unquestionably have created benefits. "If they'd been more conservative in their approach, perhaps implementing it in stages, that project would have been a lot more successful," Weeks says.

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