The Technology Spike
This is a whitepaper I wrote back in 2008, and updated periodically since then.
Information Technology is doubling every 1 year to 18 months, everything that it touches is pulled into this cycle … so what does this mean for your personal life, business life and your career?
This means that every 30 years we become 1 billion times more advanced than we were at the start of that 30-year period.
So if we graph this progression at a 30 year view we get a graph like this
From 2 to 1.073 billion in 30 years
And your perception of the “growth” over this time … All of a sudden, we are so far ahead – all the growth seems to be in the last few years.
From this in 1982
To this in 2012
However perception is not reality
If we look at any smaller point along this graph (say any 4-year period):
The relative change (your perception of the change) and shape of the graph is actually exactly the same – a factor of 8 times growth in any 4-year period.
This means that the person observing the changes doesn’t see a massive jump at the end. They only see a relatively minor increase over any 4-year period and can easily fool themselves into thinking “We don’t need the latest and greatest thing.”
Indeed, if you look at any single year, there isn’t much movement at all. In fact, it is only a mere doubling.
If you’re not watching for it, you could certainly dismiss it as not necessary.
Growth Factor = 16 / 2 = 8 times
Growth Factor = 1.073 Billion / 67 Million = 8 times
The trap
The trap is in the ”long range effect” creates for business leaders and anyone looking to plan their lives and careers over the next 10 years.
If we look at a 10-year block, there is a dramatic increase. If you are unaware of it, it can take you by surprise and overtake your business and your job very quickly.
This is a 1024-fold increase! In a world of increasing competitiveness, this can be a defining factor, not just in levels of profit – but in sustainability within a rapidly moving market – with expectations changing along with the graph.
The huge spike at the end is not, in fact, as it first appears. This big spike is a direct result of much smaller and less-easy-to-discern movements over shorter periods of time.
So the trap, is listening to the short term feeling of being up to date, looking back 1-2 years and forward 1-2 years you don’t notice the rapid change. Too long means more drastic and costly action to keep up and stay current.
What does this mean to you?
What it means is something that developers are very familiar with and that most other people generally don’t want to hear.
It means that there are a range of issues that businesses need to face in the light of this growth. Primarily, your business plans, goals, budgets and thinking need to take into account the mid-term reality of change, not just the perception that it is wise to employ short-term conservation.
For the individual it means the job you did yesterday will change in the way you do it and potentially the role you play, this if you are active in learning is a huge advantage.
Continually Evolve
The traditional manufacturing model was to invest in Research & Development (R&D) early on and then develop a manufacturing base to turn out units for years on end. The spike breaks this model.
Most businesses want to see a return on investment for at least 7 to 10 years but with information technology, that is not a viable solution. A technology solution does not improve on its own, so as you stop investing in it, it degrades – it degrades in its usefulness and in data that is no longer fit-for-purpose.
Incremental improvements
This graph shows the climb of surrounding technologies after a system is implemented in the first year and how each version falls behind, quickly creating a wider and wider gulf.
Stepping up new versions, evolving as we describe, keeps you within sight for several more years BUT there comes a point (usually around the 6 to 8-year mark) where updates to the same base technology cannot keep you on track for much longer.
It is BEFORE this point that you need to decide to start again with something to hold you for the next 6 to 8 years.
Stagnating on a single point will see you left behind, far too quickly, as you try to make up for the ground lost through all the previous steps. What tends to happen, though, and all too frequently is the classic statement or thought, “It is too expensive to make those changes now,” and, as a result, the technology dies with that statement.
Don’t Listen to Accountants for Long-term Stability
Gone are the days of 30 years spent doing the same thing and hoping you are on the right track.
Business operators, politicians and “the holder of the purse strings” look at the world from year to year (or maybe a few years ahead of the game).
They are driven by a “minimum budget” goal because that, in the short term, means higher profits today.
But, as you see from the previous graphs, this means that they are blinded to the growth potential, and more over, the extreme threat posed by stagnating in the face of that growth curve.
They will try and cut back on investing in new technologies and cut back in investing in evolving existing technologies, and in any 1 to 2 year period, it becomes obvious (in the graph) to see why. There isn’t much obvious change, but then what happens?
The curve starts to move and you’re stuck back in a timeframe 3 to 6 years before and you need to jump all those years at once just to keep up, let alone get ahead.
Watch for Key Jumps - the inflection points
Throughout these 7 to 10-year cycles, there are points where key technology vendors like Microsoft, Apple, etc., release key new technology jumps rather than just the incremental improvements.
Being able to discover, recognise and evaluate the appropriateness of these key jumps is a critical part of being able to keep up in the longer term.
Avoid locking in best practice
By the time these technologies are main stream, there has been traditionally a 3 to 6 year lag, which (as we have seen in the graphs) is a little too late to be fixing and adapting a near-obsolete technology into something suitable.
As you rely more on IT for your business, these points will become more and more critical to know, absorb and adapt to.
Following these key jumps within the first few years represents a massive competitive advantage right now but, in years to come, as everyone gets used to the curve, it will simply be “the norm”.
Avoid Big One Hit Wonder Projects
These take years to build before a benefit is seen and should generally be avoided. It is far better to develop many small blocks and start seeing value as early as you can before you get left behind.
It is also, generally, easier to upgrade and maintain the smaller blocks if they are developed cohesively but without being tightly bound together and dependant on each other in order to upgrade.
Let it go
If you have a dinosaur technology, then continuing to invest in it or use it will just drag you further behind, and it will do so faster and faster.
Bite the bullet and find or build the next thing.
Invest in the “move away” strategy before it comes time, not when it is critical or already too late.
This applies even more to your business model, methods of operating, and your interactions with your clients and suppliers. All of this is a changing environment with changed expectations and the leanest and most effective wins.
Information technologies are still just tools to support and enable all these things to occur, but it is still up to you, your team, and advisors to extend your relationships with those around you and continually seek to improve on the way you do business today.
The good part is that once you start to adopt the new models and start looking for the opportunities, there is so much made available and that will open up as a result.
Isn’t Just Technology’s Problem Anymore
As information technology starts to integrate and influence other sectors like finance, medicine, education, wholesale, retail (you name it, it is everywhere now).
All industries will be drawn into this doubling effect, and will be forced to either adapt or die out.
This could mean industries being replaced by a newer breed which can handle the growth and who not just invest in it but live it and, ideally, whose business models are defined by this effect existing.
Newspapers have seen this, and we have been in the middle of it all – 7 to 10 years ago, everyone could “kind of” see it but thought there was still time. It didn’t look like such a cliff edge then and they were stuck in their ways. They were stuck in their traditional ways, thinking, “We don’t need to invest yet”.
We were told, “We have to do it this way because we have always done it this way”. Now the rules have obviously changed because the business models are changing. The ones who want to survive are thrashing around trying to work out how they can jump the ever-widening gulf that has opened up, step by step, over the last 10 years.
Your current information systems need to constantly evolve, because while it might not feel as if there is much change in any one year, there is enough (as you can see) that SHOULD get your attention.
If not, “catch-up” will be very costly and may be the turning point for your future existence.
The underlying technology base you are using should be replaced within 7 to 10 years or you will be building on foundations that are 128 to 512 times slower, weaker and less capable than your competitors and not, as most business people see, “only a few years old”.
If you wait longer, you get exponentially less capable of competing.