Business Success or Failure in Technology
Most people are in consent that improved business productivity or performances can be facilitated by an organization’s ability in successfully executing their overall strategy. Technology application in organizations helps in maximizing business productivity and builds a platform for an organization to realize their real business success. Technology enables business organizations to have tools essential for countering possible challenges in the execution of business strategies while also prospering the business especially in today’s volatile economic environment (Mohan-Neill, 2009). Technology usage in organizations, therefore, enhances their productivity levels leading to successful businesses. Technology use in business organizations helps in boosting their competitiveness. Nevertheless, successful technology applications in organizations are based on a variety of factors, without which a company may not attain business excellence as intended (Jasra et al, 2011). Understanding the organizational strategy is a must in the development of an effective technology strategy, which aligns with the overall firm’s business vision. Successful technology usage in organizations can generate a variety of benefits through improving the company’s strengths and efficiencies. However, technology implementation in an organization can present extraordinary challenges to organizational management and the technology experts. Lacking the ability of curbing such limitations can result to technological failures that can extremely drain the company’s funds, people and vitality. This paper, thus, will examine how companies can gain business success or suffer failure especially in technology. The paper will focus on two specific cases of sport businesses comprising of Nike and Under Armour. The analysis will determine how firms can use technology effectively to succeed in their businesses.
Successful Technology Application in Organizations
Organizations that have managed to incorporate technology into their business strategy successfully have generated substantial business returns. Moreover, technology has become a significant business strategies enabler in diverse areas including competitive differentiation, quality improvements, process improvement/automation and mass customization. Organizational managers that have aligned technology with their business strategies claim that such integration was vital in ensuring business survival and success. Technology has enabled many organizations to gain effectiveness and efficiency in their businesses. Weiss and Anderson (2004) noted that trends have shown positive relationships among technologies, competitive strategy and organizational performance.
Therefore, developing a strategic technology plan starts with acquiring full support from the senior management or organizational executives. A team should be appointed to create the technology plan hand-in-hand with appropriation of resources required to facilitate the development of the plan. Such a plan assures the company that all factors have been keenly considered within the planning process. Further, the plan strengthens the technology professionals’ ability in gaining cooperation from all the organizational members and the different organizational departments during this early stage. Considering that technology use, awareness and expectations are found in different degrees across the organization, such a team should incorporate representatives from all the functional departments of a company. Their engagement and participation within the planning process will ensures the technology plan aligns with the company’s goals and mission while also capitalizing on all resources available in the whole organization (Vaughan, 2007).
In this case, attaining successful businesses in organizations is not merely a matter of technology. Other factors are critical in order to make the technology strategy successful in a company.
Interaction between technology and the organization/Company: Technology influences how organizational members interact with each other in the accomplishment of routine tasks. For this reason, technology implementers must be mindful of the cultural connotations of the technology efforts to the company. Cultural and institutional separation between designers and users can easily lead to a huge gap between the two (designers and users). Nonetheless, companies can manage this through seeking functional representatives that have a wider understanding of the possible technology applications in the business. Moreover, imposing a technological solution can exacerbate, instead of resolving a problem. Therefore, it is important for technologist to know that imposing technological solutions could worsen instead of resolving the problem (Waheed et al, 2010). Organizations should examine, understand and document the contextual interactions of processes prior to concluding that a new technology can resolve any problem within the processes. A company can attain an effective technological solution, which complements a company’s culture through having an open mind towards the situation they are facing. Nurturing a cross cultural understanding of business practices and technology across all organizational levels will position the company and the technology department strategically for the execution of the technology-based initiatives.
The involvement and participation of the users: Employee participation is the most dominant management practice that correlates with success in an organization. Companies, therefore, should structure employee engagement or participation in a manner that ensures successful results on the part of employees, organization and the technology project. Organizations should communicate to users effectively while also linking the communication to the users’ experiences. The technology implementation activities should be supportive to users through enabling them to cope with the changes, surprises and contrasts to facilitate a successful technology initiative. Companies can engage users through allowing discussions among coworkers as well as between the technology users and implementers. According to Waheed et al (2010), whenever employees are provided with opportunities to contribute towards a specific technology under implementation, they are more likely to adapt easily to the subsequent changes and readily accept the technology. Organizational members, thus, should be involved in making important decisions when considering and implementing new technologies. The individuals should be allowed to assume measures of responsibility to a certain level when designing and executing the technology to facilitate a shared ownership and acceptance of a technology project. User participation involves engaging employees in the activities, behaviors and assignments throughout the technological implementation process. The participation is critical for successful results because it allows users to consider the considered technology essential and individually relevant. Consequently, this creates a positive attitude towards the new technology.
Resistance and skeptics: Resistance to a specific technology in an organization can face resistance in an organization for various reasons. Resistance may result due to individual or group reasons. An organization that aspires to develop and implement a successful technology strategy must eliminate this form of resistant through training or education of organizational members, changing the personnel involved in the technology execution, persuading the resisting people, coercing the resisting employees via company policies or promoting user participation to secure their commitment towards the technology project. Nevertheless, the most effective strategies in this case are training/education and user participation. Similarly, resistance may result from internal factors related with the technology under consideration. For example, people tend to resist technically insufficient technologies/systems, technologies with poor designs, and technologies that are not user-friendly. Nonetheless, organizations can minimize such form of resistance through rectifying the problems linked to the technology. Companies can also reduce technology-based resistance through employing skilled designers, modifying the technology to align with the company’s procedures/policies, being keen on the ergonomic features and engaging users in the designing stage (Waheed et al, 2010).
Commitment: Successful technology development depends on the commitment the organizations and their members have towards the project. Commitment engages the human psyche, time element and the external forces. This concept incorporates psychological forces binding a person to certain actions plus the structural conditions, which make behaviors difficult to change or irrevocable. Similarly, commitment influences behavior persistence. In this case, commitment towards a technology project in an organization involves doing the crucial things throughout the process of technology development, technology installation and utilization to provide a solution to an organizational problem. Commitment also incorporates change such that a company must show a willingness to institute changes to procedures, behaviors, structures plus any other factor, essential for the technology to work. Commitment must be present across the organization including the senior management, which is arguably the most critical factor in the planning and implementation of a new technology. According to Waheed et al (2010), lack of commitment can be detrimental to the success of a technology and its successful application in an organization because it paves way for resistance and indifference. Organizational leadership and management should ensure the success of a technology project through building an organizational culture that promotes commitment of all their members towards technological projects. They should stress on the efforts of the project, respond to the projected-based crises in a way that reflects the project’s importance as a vital component of the company, ensure sufficient availability of resources, training organizational members in preparation for the technology execution and reward all efforts directed towards the project. Indeed, commitment must generate from all organizational levels and persist throughout the life cycle of the technology project for success to be achieved.
Planning: Every organizational project should always start with a clearly defined vision. Strong leadership that has well written vision acceptable across the organization acts as a great source of intrinsic motivation, allowing organizational members to support the efforts of one another to achieve a common goal, which consequently leads to a successful technology implementation. The plan of the project needs to be focused on relevant detail, clear and concrete. Further, the plan should incorporate keen specifications on the roles of team members plus an assessment of the company’s needs, a communication plan, critical project’s success factors, project schedule and risk analysis, among several others. Such a comprehensive plan will establish accurate expectations while also defining user participation and minimizing individual anxiety on unknown issues (Waheed et al, 2010).
Risks: Lack or poor management of technology-based risks can lead to huge cost overruns during implementation. Imperative to note, every technology project comprises of some risks due to the organizational effects of the technology. Project managers, however, can contain such risks through knowing and understanding the correlation between the dimensions of a technology success and risk factors involved. Some of the risks may comprise of project size, organizational changes, users unwillingness, lack of expertise among the team members, lack of support from organizational executives, conflicts between technology developers and users, unrealistic budgets and unrealistic schedules, among others (Waheed et al, 2010). Nevertheless, factors that can ensure the success of a technology project include senior management support, clearly defined goals, adequate resources, sufficient communication, effective decision making, user information satisfaction, cost/benefit productivity and clear project scope, amidst others.
Nike’s Technology Success
Nike operates within the athletic footwear industry, an exceedingly competitive environment. Although this industry has few entry barriers, the success of small sports-wear firms is always shaky. Nike, therefore, has demonstrated great success in this industry, having taken the market lead followed by Adidas and Reebok. Nike’s business involves designing, making and marketing athletic apparel, footwear, accessories and equipment (Igbal, 2011). Nike Corporation has been running under a very effective management within an attractive industry, with a very strong brand image. The business success or excellence that this business has been enjoying is primarily based on technology, in efforts to remain ahead of competition through producing sports products while also producing the machines that make shoes. For this reason, one of the factors that have facilitated the success of Nike’s business relates to their manufacturing efficiency. As a shoe manufacturer, Nike must balance costs of raw materials, labor, import tariffs, technological developments and shipping. Footwear firms must keenly choose their channels of distribution in order to ensure availability of their products efficiently while also retaining their business goals and brand image (Igbal, 2011).
In today’s business environment, technological development is becoming increasingly dominant within the footwear industry where Nike operates. Technologies such as computer aided design (CAD) have enabled such companies to shorten design-distribution cycle in a short period successfully. Further, new technologies like the electronic data interchange (EDI) have allowed accessibility to new quick response programs, linking retailers to manufacturers to allow for proper inventory to retailers when need arises (Vaughan, 2007). Under such technologies, the electronic point-of-sale scanners are able to read data associated with the sale including the size, price and product immediately following a sale. Similarly, the technology allows the manufacturers to accurately adjust product to suit consumer demand. Among the dominant strategies that have made Nike’s business successful relates to their working hand-in-hand with the suppliers that enable the company to manufacture their products at extremely low costs, and of superior quality facilitated by the application of the newest technologies. Such factors have made the company a market leader while their competitors continue striving for market survival.
Nike has further been very aggressive in incorporating technology in their marketing strategies, which have increasingly boosted their success in this industry. The most sustainable competitive advantage Nike has relates to their innovative product quality. The company engages in massive scientific and technological research like air sole to make footwear. Research and development (R&D) has been a constant activity in producing better products for Nike consumers. According to Igbal (2011), the competitive advantage has been valuable to both the consumers as well as the company. In spite of Nike’s competitors, Nike has retained their great competitiveness in relation to product technology, which has been impossible for other firms in the industry to imitate or substitute. Various factors have led to the successful development and implementation of such technologies at the company.
User participation is one key approach employed by Nike Corporation. The company engages employees in their technology-based decisions to provide insights on the same. Nike, therefore, is constantly involved in challenging their staffs on daily basis. Indeed, Nike’s human resources global strategy involves unleashing the potential of their human capital across all their business areas including technology to enable the individuals make valuable decisions that consequently result in Nike’s business growth. Nike’s employees have actively participated in shaping the innovation and sustainability journey of the company. In 2005, for example, all Nike’s employees participated in efforts of devising what the future held for the company in terms of sustainability. The company, thus, challenged their employees through brainstorming sessions and group exercises to define the company’s future plus the possible technology they could employ to get there. Employees’ contributions or insights during the exercise enabled the company to shape their business approach towards technologies that would promote business sustainability. Nike’s employees also are well equipped in managing change. Moreover, the customers’ needs keep changing such the staffs must also align their new decisions based on such needs. Therefore, Nike offers learning opportunities for their employees, which enables the individuals to constantly rethink the business needs (Nike Incorporation, 2010/2011).
The organization’s culture also support’s employee participation through openness and allowing creativity. The culture ignites and inspires innovation, which facilitates ideas for new technologies that increasingly boost the company’s business. Nike’s inclusion and diversity strategy facilitates this through three foundational priorities. One of them includes offering a resource center that has various exercises and tools to enable teams discover how inclusion and diversity can promote innovation and creativity. Nike also seeks empowering inclusive cultures such as ‘cultures as offense’ comprising of young employees. Thirdly, Nike inspires ideas with a purpose to ignite innovation (Nike Incorporation, 2010/2011). Through designing/developing new and creative engagement models, the company equips teams and leaders with tools that build a culture of innovation and openness where new ideas and perspectives are welcomes, heard and considered.
Under Armour Technology Disaster
Technology failures in business organizations result in negative impacts on time, resources and internal costs (Compuware, 2013). Similarly, such failures are related to lost productivity, decreased revenues and sales. Organizations that have faced such disasters also have been found to fail in meeting the service level agreements. External costs are incurred as such companies try to establish manual processes or temporary systems for correcting the failure. The direct impacts are normally absorbed by the products, operations, sales and marketing. The biggest cost to businesses after a technology disaster is usually experienced at the operational level of an organization. At the operations department, sales suffer the greatest heat as executives report lost sales or errors in order fulfillment. Similarly, company managers report that such failures affect products through causing substantial downtime. Nonetheless, the most expensive effect of a technology disaster relates to products recall. Besides the shorter effects on costs within a business organization due to technology performance failures, there are considerable long-term effects on a company’s financial health or position. Such an organization can suffer a loss or drop in market share plus a loss of brand equity due to such technology failures.
An organization should place the factors discussed above when introducing and implementing a new technology to ensure successful results. Moreover, a successful technology strategy plays a key role in a business productivity and performance. This is primarily because a new technology can help in increasing the speed within which manufacturing of products occur and ensures quick delivery of services or products to the end users. Other technologies also ensure production of high quality products, which are actually the primary issue driving investments into technology in modern firms. Occasional technology issues such as those that occur few times within a week or daily represent the greats risk or threat facing investments in technology (Compuware, 2013). In spite of proactive measures to address issues of technology failures, most executives state that failure frequencies have remained constant or at an increasing trend.
Companies that have suffered technology disasters in the past have, the majority of organizational managers confirm that technology failures demands for additional investments in efforts to resolve technology matters. Among the most frequent and immediate actions companies take in resolving the issue include buying or upgrading the new hardware or software, hiring an external consultation firm or increasing the IT staffing. In spite of such efforts in resolving technology matters when technology failure occurs, most companies consider it essential to inform or communicate the matter to their clients. Some companies that have suffered technology failure are forced to start the production process all over again while also revalidating the manufactured products especially because of regulatory requirements. According to Compuware (2013), this is an extremely expensive venture for companies that really shake their financial ability.
Under Armour’s technology failure has for long been blamed for the US speed skating team inability to deliver, in spite of the high expectations. Under Armour teamed up with Lockheed Martin to develop the ‘Mach 39’. The company promoted this new developed product as the fastest suit for speed skating in the whole history. Nevertheless, the technology used in developing this new suit has been associated with a US-based athletic team failure. ‘Mach 39’ has been considered a total failure by the end users, which has placed the company’s technological capabilities in question in relation to whether it can help improve the professional athletes’ performance (Moskowitz, 2014). Due to this failure, Under Armour has suffered greatly impacting negatively on their stock price, especially because the failures occurred on their playing field. End-users complained on the effectiveness of the newly developed product. Speedskaters complain that the newly developed skating suit was of poor quality because it was extremely tight making it difficult for the skaters to breathe. According to them, the vents placed at the back of this suit, which was designed for the purpose of releasing heat has been creating drag thereby preventing skaters from preserving the correct form (Moskowitz, 2014). Similarly, it was noted that the speed skating team did not test the new skating suit before using them in the Olympics. Further, the team had trained in Italy in a high elevation, on an ice different what was found where the Olympics took place, Sochi. The team coach also expressed some concerns relating to a similar suit developed three years previously, which was found ineffective since it slowed down skaters by creating drag.
According to Moskowitz (2014), Under Armour’s performance and stock has suffered greatly since the occurrence of this technology failure. Although this has been found to be a temporary occurrence that immensely hurt the firm’s stock price, it has provided an opportunity for the sideline investors to invest within a high-growth firm at a slightly discounted rate. Under Armour’s smaller size has made it susceptible to diverse economic setbacks while also incapacitating the company to provide dividends. For this reason, most investors have always preferred investing with Nike rather than Under Armour.
Sochi Games created a very negative/bad image concerning Under Armour’s technological ability, which has had bad implications on their business in terms of consumers trust and confidence on their products. This sports apparel company had spent countless hours developing the high-technology aerodynamic suits for racing for the purpose of improving the performance of the US-based speedskating team. Although the company intended the technology intended to enable the team-members become victorious in the skating game, none of the skaters has succeeded (Peters, 2014). The failure was blamed on the new skating suits developed by Under Armour because it interfered with the speed of skaters such that the players felt like they were struggling with the suit(fighting the suit) in order to maintain the right form. Under Armour had hoped to focus their attention on setting a record in the athletic field, but the failure came as extremely bad news since it nearly destroyed the company’s reputation as the worst athletic-product producer in history (Peters, 2014). Indeed, this was not what the company envisioned when signing to work with the skating team.
Sports serve as a big marketing tool for firms such as Under Armour. Such companies can generate substantial rewards from prominent associations with popular or successful athlete. When an organization has some strong affiliations with a successful athlete, consumers tend to associate the company’s product with the athlete’s success. For this reason, businesses can use Olympics as a strategy to demonstrate their great innovative capabilities to the world. In fact, companies do that with the aim of showing their technology cutting-edge (Peters, 2014). This was what Under Armour hoped to achieve through their ‘aerodynamic racing suit (Mach 39). The product had been tested within wind tunnels and its design was based on great contributions from Lockheed-Martin Engineers. The results, unfortunately, were on the contrary with the product becoming an object of derision and mockery, which made Under Armour appear inept rather than innovative. The company, therefore, is trying the best way possible to fix the problem of the substandard suits. According to Peters (2014), the company has tried without success to win back their public relations war.
Based on the above case, it is important to assess what led to the technology disaster experienced by Under Armour. To begin with, the new technology did not seem to interact well with the company’s culture (Waheed et al, 2010). Under Armour’s culture has always been based on excellence and quality of their products, but this was not the case with the skating suit. The product never met the standards that aligned with the company’s culture. Similarly, this failure could have been caused by the lack of involvement of the users, both employees and customers. Engaging the users would have prevented the great resistance to the new product since the users would also identify with the product and appreciate its capability. Moreover, probably they would have contributed ideas to improve the product or develop a better quality product. Users’ participation is extremely critical for any technology development and execution to be successful. Besides, embracing contributions from the users also helps in preventing resistance to the new product as it is in the case of the skating suit, Mach 39.
Commitment is similarly an essential element in ensuring successful technological projects (Waheed et al, 2010). Commitment must generate from all organizational members including the executive. Under Armour does not seem like it engaged total commitment in the development of the new technology. This is because commitment requires doing all the essential things in the entire process of developing, installing and using the technology to offer the required solution to an organizational problem. Under Armour anticipated to market their company’s offerings through developing a technology that would enable speedskaters have the best skating experience while also becoming successful. Such efforts would boost the company’s reputation as well as improve their public relations. Nonetheless, this was not achieved because the technology became a disaster to the company’s business making the company loose greatly in relation to PR and image. If all company members were fully committed to this project, they would have discovered any aspect that interfered with the quality of the product to rectify accordingly prior to releasing it to the market.
Under Armour needs to re-assess their planning processes for technology projects and make the necessary amendments to ensure every important bit of a strategy is addressed effectively for successful results (Vaughan, 2007). Planning must be within a vision, objective and goal that a company intends to achieve upon the execution of any strategy including technology. Based on the Under Armour’s case, it seems the technology disaster got them by surprise. The company had not anticipated such a failure would occur, but they were confident the newly developed technology would increasingly market their business even to other consumers. However, in every organizational project, it is critical to consider and reflect on the possible risks a certain undertaking may face. A risk analysis prior to starting a technological process enables an organization to plan ahead and incorporate some mitigation measures. Under Armour failed terribly in this respect and that is the reason their stock, stock price, image and PR were greatly hit. From the look of things, most consumers appear like they do not have trust or confidence with the company’s products anymore. In fact, the company has been very aggressive in trying to win back their company image but the results have not been very fruitful. For this reason, it is recommendable for any business organization intending to introduce or develop a new technology to take into consideration all the critical factors to prevent such technological disasters that can immensely threaten the survival of a business.
The above work has provided a detailed analysis of two different scenarios, involving cases for successful technology (Nike) and technological disaster (Under Armour). The discussion has demonstrated that successful technology initiatives must incorporate a number of factors for successful results including proper interactions between the technology and the company culture, commitment of all people in an organization (especially the senior management), developing measures of preventing resistance to technology, risk analysis, user participation and proper planning. Lack of such elements when introducing a new technology can lead to technological failures like in the case of Under Armour.
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