ANALYSING THE FACTORS ON ADOPTION OF NEW TECHNOLOGIES IN A HIGHLY UNCERTAIN ENVIRONMENT Dr. Priya Ranjan Dash.

Department of Statistics, Utkal University, Vani Vihar, Bhubaneswar -751004. E Mail: prdashjsp@gmail.com Biswaranjan Rath. Asst. Prof. (IT) International School of Business Management, Gangapada, Bhubaneswar E- Mail : brrath@yahoo.com Abstract: The present study investigates the adoption process of a new technology in situations of high uncertainty, specifically uncertainty about external, internal, and technology factors surrounding the adoption of a new technology and provides a more detailed understanding of these factors and their impact on the technology adoption process. 1. INTRODUCTION In the present era of technological evolution, it is worth studying the possibilities of adopting a new technology and the obstacles that might be faced within the adoption of this new technology, and resolving the problems of lack of knowledge about dealing with an overload of knowledge and information in the bank. It is of common practice that, although the technology as such did not pose major challenges for the bank, the process of adopting this technology and the uncertainty factors surrounding the adoption process led to many difficulties in implementing it successfully. The process of technology adoption is particularly challenging (and poorly understood) in highly uncertain environments. The existing technology adoption literature only seems to be able to explain this in part. Clearly, there is a need for a better understanding of the technology adoption process in situations of high uncertainty. 2. PROCESS OF ADOPTING NEW TECHNOLOGIES Research on technology adoption processes is relatively rare (Woiceshyn, 2000). Earlier studies have mostly explained the process as one of political influence (cf. Dean, 1987). Several studies have focused on the role of technology supporters or advocates (Burgelman 1983; Howell and Higgins, 1990; Kanter, 1983). The most comprehensive of the process studies is one of technology adoption in small firms by Langley and Truax (1994). They go beyond the political models and provide detailed descriptions of adoption processes in five firms. They also describe the contextual elements imposing on these processes, but they do not address success of adoption. Another view focusing on the information-processing perspective identifies four processes of adopting a new technology with respect to organizational learning: knowledge acquisition, information distribution, information

interpretation, and storing and retrieving information to/from organizational memory (Huber, 1990; 1991). His discussion of knowledge acquisition includes the action element of learning; additionally he distinguishes experiential learning, vicarious learning and searching as types of knowledge acquisition (Huber, 1990; 1991). According to the OECD (2000) technology adoption processes are defined as processes that involve creating or reengineering products or services to meet new market demands by introducing new technologies to improve productivity, developing or applying new marketing techniques to expand sales opportunities, and incorporating new forms of management systems and techniques to improve operational efficiency (OECD, 2000; Porter and Stern, 2001). Stoneman (2001) integrated the idea that adopting a new technology is similar to or almost the same as any other kind of investment process under uncertainty and therefore can be analyzed and measured (Dixit and Pindyck, 1994). The investment decision of adopting a new technology is characterized by a) uncertainty regarding expected profits, b) irreversibility that creates at least some sunk costs, and c) the opportunity to delay. The primary implication of this way of looking at the adoption of any new technology problem is that there is an option value to waiting: that is, adoption should not take place the instant that benefits equal costs, but should be delayed until benefits are somewhat above costs (Hall and Khan, 2003). Therefore, an effective implementation of a new technology requires managing its adoption as a process (Konrad, 2002). 3. IMPACT ON BUSINESS PERFORMANCE Adoption of a new technology is often expensive for many reasons (Hall and Khan, 2003). The observable determinants of new technology adoption are the benefits gained by the user and the costs of adoption. These benefits are simply the difference in profits when an organization migrates from an older technology to a new one. In the case of customers, the benefits vary from decreased costs and increased productivity to better processes. However, these benefits may also include such non-economic factors as the satisfaction of being the first on the block to be converted from the older technology to the new one (Hall and Khan, 2003). Meanwhile, the potential risks (e.g., use, development and marketing of a new technology) related to the uncertainty about the benefits of such technology are one of the factors slowing down the pace of adoption (Bronwyn and Beethika, 2003). Therefore, organizations with a large market share are sometimes prepared to spread the potential risks associated with new projects given their ability to expand their technology choices and are in the position to try out a new technology in parallel to the operational old one in case of unexpected difficulties (Bronwyn and Beethika, 2003). Large organizations that have large market shares are more inclined to undertake adopting a new technology, both because they have a greater opportunity to gain profits from the adoption but also because the availability of funds to these organizations is greater (Bronwyn and Beethika, 2003). Use or adoption of a new technology process often involves huge upfront costs, e.g., investment in production, staff training, marketing, and research and development. Hence, any organization will only have an

inducement to invest in a new technology if it can later receive acceptable return on investment (ROI). Since profits diminish because of competition, only large organizations with adequate market power would find it profitable to adopt (Bronwyn and Beethika, 2003). Dorfman (1987) supported the same notion that larger and more profitable organizations are more likely to have the financial resources required for purchasing and adopting a new technology. In addition, they may be better able to attract the necessary human capital and other resources that are necessary (Bronwyn and Beethika, 2003). In their study of ATM adoption by banks, Garth and Shepard (1995) confirmed, that network effects significantly impact technology adoption since they affect the expected benefit from a new technology. By adopting ATM technology, banks are able to measure an increase in the benefit they are gaining; including customers ability to access their bank accounts from anywhere. To win new customers and retain existing customers, organizations may employ new technological solutions, such as Knowledge Discovery in Databases (KDD)1 and Customer Relationship Management (CRM)2, in order to analyze the customers behaviors and needs. As discussed in the preceding part, adoption is driven mainly by the expected changes in profitability. An organization which plans to adopt a new technology first evaluates the relative benefits and costs of this adoption and accordingly makes the decision to either adopt or not (Bronwyn and Beethika, 2003). Several factors influence the organizations evaluation of the returns and the business impact from the technology. The characteristics of the organization, its internal factors to effectively adopt the technology and its position in the market are crucial factors which go into the organizations evaluation of the returns from the adoption and use of the new technology. Similarly, an organizations links with external factors greatly enhances its knowledge pool as well as its ability to manipulate and handle these external factors by learning from others experiences (Bronwyn and Beethika, 2003). The possibilities of failures/successes are likely to be assessed in terms of their impact on safety, finances, marketing, legal compliance and quality assurance. Where possible, impact is expressed financially for purposes of comparison. For instance, organizations may spend much more time on marketing to rebuild customer confidence. Therefore, organizations attempt to improve their ability to handle ongoing changes, maximizing business impact, while minimizing risks and scope impact. 4. UNCERTAINTY FACTORS There are various uncertainty factors supporting or obstructing the adoption of a new technology. Authors investigated these factors in specific fields. However, most of these studies are generally resulting from inside and/or outside the organization. The effects of these uncertainty factors on the new technology adoption are multiple. Most studies agreed on the following classification of uncertainty factors: External uncertainty factors: Generally, these factors have effects on introduction of a new technology to an organization and the adoption process related to it. There is a list of external factors to be considered, if referred to existing models of adoption, coupled with additional uncertainty factors that are relevant to the technology adoption process in uncertain

environments; namely: customer satisfaction, governmental polices, competition, and cultural and educational environment . Internal uncertainty factors: Conventionally, these factors are classified into two common folds of factor categories; organizational factors, and personal attitudes or organizations employees attitudes (cf. Kamakura, Mittal, and Mazzon, 2002; Sasser, and Schlesinger, 1997;). Generally, literature approved that there is a positive relationship between the organization size and market share, and the technology adoption process (cf. Geroski, 2000). Organizations employees attitudes mostly refer to the positive affecting state resulting from the assessment of ones job or job experiences, and the employees reflection (positively or negatively) on the new technology adoption process (Reichheld, 1993). Technological uncertainty factors: The uncertainty technological factors that affect the technology adoption process, most often studied in relatively stable environments and linked to technology acceptance, are response time, flexibility, breakdowns or crashes, usability or ease of use, and usefulness. The last two factors have been the most thoroughly studied because they are both central to the Technology Acceptance Model (TAM) (Davis, 1993; Venkatesh, Speier, and Morris, 2002; Davis and Wiedenbeck, 2001;). The importance of choosing these factors and their folds is derived from various empirical studies that have investigated the effect of these factors on the adoption of a new technology. Most of these empirical studies approve that there are various effects of these factors on the adoption process of a new technology. Eventually, we can say that there are different uncertainty factors affecting the adoption process of a new technology. In the present research, the uncertainty factors are defined broadly as unpredictable and changeable variables/factors, the effects of which, on the adoption process, cannot exactly be estimated (positively or negatively). These factors can be grouped into three homogeneous categories: external, internal, and technology uncertainty factors. Despite the adoption process link to external, internal, and technology uncertainty factors that differ from country to country, technology adoption effort can fail through no fault of the technology (cf. Konrad, 2002). Therefore, it can be argued that there is a gap and that new insights about uncertain environment impact should be developed. 5. CONCLUSION The present study leads to a better understanding of the relationship between the technology adoption process and business value impact in a highly uncertain environment. This section discusses the expected contribution of the research from two different perspectives, academic and managerial. For academic contribution, the studys aim is exploratory, building towards understanding and subsequently towards constructive guidance for the adoption process of new technologies in, sometimes inhospitable, corporate environments. As wide as the possible applicability of the study is, the claim to managerial contribution should be just as modest.

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