Read the news today and there is likely to be an article on how generative artificial intelligence (GenAI) is going to change the world. One story will praise the transformative potential of GenAI, the next will shout doom and gloom. Neither is 100% right and neither is 100% wrong.
The mixed perceived potential of GenAI can be seen in responses to the “2023 Gartner Supply Chain Technology User Wants and Needs Survey.” We asked respondents to rate how important they currently saw certain emerging technologies like GenAI and how transformative they felt these technologies were going to be over the next decade. GenAI was an interesting case study. Respondents saw it as one of the most potentially transformative emerging technologies over the long term. But, at this time, it was rated as one of the least currently important technologies.
At this point, many organizations are struggling to prove and realize value from their GenAI investments and pilot projects. Accordingly, Gartner research predicts that at least 30% of GenAI projects will be abandoned after proof of concept by the end of 2025.
The survey findings highlight that before they invest heavily in a technology, companies must honestly assess who they are and what their risk tolerance is. Different supply chain organizations view the value and importance of technology differently, and they should align their investment strategies with their unique identity. Every supply chain and logistics organization has its own culture, and this culture has a significant influence on how leaders must approach and manage their technology investment decisions.
What’s your tech adoption profile?
Distribution of supply chain technology adoption profiles
"2023 Gartner Supply Chain Technology User Wants and Needs Survey"
As part of gaining an understanding of what types of technology they should invest in, supply chain leaders must honestly and candidly assess their organization's risk tolerance. This is because risk tolerance has a notable impact on which technology investments are right for an organization, at what time, and for what reasons.
Gartner research has identified five adoption profiles:
- Cautious: These organizations wait until technologies are fully mature and several iterations of the technology have been released.
- Conservative: These organizations adopt mainstream technologies once they are proven and lower risk solutions are available.
- Adventurer: These organizations prefer to adopt adolescent but maturing technologies with manageable risk.
- Pioneer: These organizations may adopt emerging technologies in the early stages of commercialization when there are successful deployments by industry leaders.
- Maverick: These organizations favor adopting embryonic, emerging, and often unproven technologies that are relatively new and riskier.
The figure above shows the distribution of adoption profiles among respondents to the “Wants and Needs” survey. As can be seen in the chart, there is a notable disparity among companies in how they approach purchasing and adopting technology.
If buying decisions are not aligned with the organization’s adoption behavior, then investments may be made at the wrong time or for the wrong reasons—or both—and organizations will fail to meet their intended goals and objectives. For example, risk-intolerant companies, like cautious or conservative adopters, should be very cautious of investing in technologies like GenAI today, while risk-exploiting companies (those that are willing to put capital at risk for big payoffs) should take the plunge.
Taking a closer look
In addition to their application profile, there are three other dimensions that supply chain leaders should take into account when deciding what technology they should invest in and when and how these technologies should be implemented: planning, control, and pace of change.
Planning identifies the organization’s approach to creating and adhering to a strategic technology plan. There are three general profile attributes:
- Strict—The majority of technology decisions will be driven by and to fit to the plan.
- Accommodating—The strategic plan is typically adjusted only under certain situations, such as changes in the business climate or the urgency of responding to new, unanticipated events.
- Flexible—The plan is less of a definitive driver for technology decisions, and users have more autonomy to pursue other opportunities where they make business sense.
Control identifies the locus of power for driving the technology agenda, with the following profile attributes:
- IT-led—The IT organization and a strong chief information officer drive the technology agenda.
- Collaborative—Business and IT work together to determine the technology path.
- Business-led—Leaders from the business largely guide the agenda.
- Measured—The enterprise prefers to observe the impact of events and new technology before acting.
- Responsive—The enterprise looks for technology to help it react and respond to external events.
- Dynamic—The enterprise aggressively pursues new technologies and reacts quickly to external events in pursuit of competitive advantage.
These categories are more indicative of an organization’s buying propensity in terms of when, who, and how they make technology decisions than traditional factors such as company size, geography, or even industry.
These considerations also go a step beyond traditional technology maturity models. Maturity models are a good first step for gaining an understanding of “who are you,” “what you do,” and “how you perform” compared to other companies. However, the three dimensions above help you unlock another level of insight—the “why you do what you do” and the way you do it. This provides leaders with a deeper level of understanding of organizational behavioral traits, much like psychographic targeting in consumer marketing.
These insights can help leaders gain perspective on how cultural differences influence an organization’s supply chain technology adoption behaviors. Thus, they can use the information to determine which technology strategies and investment plans will be most effective with their organization’s unique temperament.
