Technological change: Definition, purpose & examples

In this era of ongoing technological progress, businesses must remain constantly evolving and readily embrace the seamless integration of technological advancements.

Whether incorporating state-of-the-art software, adopting business process automation (BPA), or deploying cutting-edge digital platforms, technology is the propelling force shaping today’s corporate arena.

Yet, the intricate challenge of effectively executing technological change lies beneath the surface of technological innovation.

Achieving success in technological change isn’t solely a matter of choosing the right tools; it primarily revolves around the aptitude to steer and navigate your organization through the sometimes turbulent seas of transformation.

This article will explore the purpose and definition of technological change, its various phases, strategies for implementation within organizations, the pros and cons, and successful case studies.

What is technological change?

Technological change refers to developing and applying novel or enhanced technologies, tools, systems, and procedures that result in noteworthy advancements or breakthroughs across diverse fields, sectors, or organizations. 

For example, the evolution of machine learning algorithms, particularly deep learning, has ushered in substantial enhancements within the sectors of image recognition, natural language processing, and data analysis.

Furthermore, 3D printing, a disruptive additive manufacturing innovation, has revolutionized manufacturing and prototyping methods. 

This technology facilitates the creation of intricate, tailored objects through a layer-by-layer construction process using various materials, delivering versatility, cost-effectiveness, and expanded design possibilities.

What is the purpose of technological change?

Technological change aims to strategically harness technology to improve operational efficiency, foster innovation, and deliver outstanding customer experiences.

While there is a notable surge of interest in technological change, with transformative potential across diverse industries and tech ecosystems, it’s important to emphasize that it doesn’t entail adopting every emerging technology for an organization.

What are the phases of technological change?

The process of technological change unfolds through three primary stages:

Invention

Invention denotes the initial discovery of an idea or a groundbreaking concept, often the result of extensive research efforts. These discoveries are typically integrated into the product development process. Traditionally, inventors secure patents for their creations, which must adhere to the criteria of being lawful, feasible, and valuable.

Innovation

‘Innovation’ can sometimes be used interchangeably with “invention” or refer to exploring novel ways to utilize or apply existing technology. Everett Rogers states innovation is a new idea, behavior, or product that appears fresh to potential adopters.

Five key attributes are associated with innovative technology: relative advantage, compatibility, complexity, trialability, and observability.

• Relative Advantage: Relative advantage pertains to how adopters perceive the innovation compared to available alternatives. It signifies whether the product or behavior is considered superior in some aspect by those embracing the innovation. This superiority can manifest in various forms, such as time-saving devices or safety enhancements like seat belts.
• Compatibility: Compatibility assesses how well the innovation aligns with the adopter’s lifestyle or practices.
• Complexity: Complexity evaluates the ease of understanding and using the innovation; simpler innovations tend to have higher adoption rates.
• Trialability: Trialability involves testing the innovation’s effectiveness or functionality before technology adoption.
• Observability: Observability focuses on the visibility of the product or behavior in action, demonstrating its utility and use. Observability can influence potential adopters by showcasing the product’s practicality and benefits.

Diffusion

Diffusion refers to the widespread acceptance and integration of technology within a society or industry. It represents how a new idea, product, or behavior gains acceptance in the market. Technology diffusion signifies expanding the usage or application of new technology from its initial users to a broader audience.

Five key attributes are associated with diffusion technology: relative advantage, compatibility, complexity, trialability, and observability.

• Relative Advantage: In diffusion, comparative advantage remains pivotal. It involves how potential adopters perceive the innovation compared to existing alternatives. Clear advantages increase the likelihood of widespread adoption.
• Compatibility: Compatibility in diffusion refers to how well the innovation fits into the target audience’s existing social, cultural, and economic context. Higher compatibility with values and practices enhances adoption.
• Complexity: Similar to innovation, complexity plays a crucial role in diffusion. The ease of understanding and using the innovation can significantly impact its adoption rate. Simplicity facilitates rapid diffusion.
• Trialability: Trialability in diffusion involves allowing potential adopters to test the innovation before committing to full adoption. This reduces uncertainty and encourages adoption through pilot programs or free trials.
• Observability: Observability in diffusion focuses on making the innovation visible to others. The more easily observable the benefits and usage of the innovation are, the more likely it is to attract attention and influence potential adopters. Public demonstrations enhance observability.

How to implement technological change

Technological change can revolutionize various business operations, from communication to internal processes. As technology continues its relentless evolution, it becomes a driving force for transformation and advancement in today’s business landscape.

To effectively navigate this landscape and implement technological change within your organization, consider the following best practices:

Align technological change goals with business strategy

Ensure your technological change initiatives align with your organization’s overarching digital business strategy and objectives. Technology endeavors should actively contribute to the organization’s goals, whether boosting revenue, enhancing operational efficiency, improving customer experiences, or exploring new markets.

To effectively steer through technological change, embrace an agile and adaptive approach within your organization. This entails fostering a growth mindset, empowering employees to embrace change, and nurturing cross-functional collaboration. By dismantling silos and fostering a culture of cross-functional collaboration, you can create an environment where fresh ideas flourish and collective intelligence drives progress.

Moreover, agile structures encourage employees to take ownership of their work, cultivating an environment conducive to continuous learning.

Stay informed to innovate

Keep up with emerging technologies, industry trends, and market dynamics relevant to your organization. Research the technological landscape regularly to identify potentially disruptive technologies that could offer opportunities for innovation. 

Set clear objectives for the change

Define precise objectives for your technological change initiatives. Identify the specific outcomes you aim to accomplish, including developing new products, optimizing processes, or venturing into new markets. 

Develop measurable goals and key performance indicators (KPIs) to keep on track with your implementation’s progress.

True transformation begins with visionary change leadership that dares to challenge conventional thinking and inspires teams to break free from the status quo. It’s about empowering employees at all levels, from the C-suite, to experiment, take calculated risks, and learn from setbacks.

Remember that innovation should not be confined to research and development teams; it should permeate the entire organization. This mindset shift fosters the exploration of modern technologies, processes, and business models, paving the way for disruptive breakthroughs and digital transformation.

Stay aware of the ethical considerations of technological change

Recognize that businesses must go beyond technological advancement and be vigilant about the ethical implications of the technologies they adopt. 

Stringent privacy standards and robust data governance should be central to your decision-making strategies. By prioritizing these principles, you safeguard your customers’ interests and establish a bedrock of trust and credibility in the digital era.

Give employees advance notice of the change

Providing advance notice of technological changes facilitates a smooth transition to new methods. It allows individuals to plan and consider alternative job arrangements or layoffs. Companies adopting new digital tools often communicate the innovation’s objectives and potential impact on the workforce.

In addition, you can also reassure affected employees that they will retain a position within the company, albeit not necessarily their previous role. Offering advance notice reduces anxiety and resistance to change, fostering a cooperative labor-management approach to job security.

Promote continuous learning and training

Technological change necessitates increasing investment in training. With the advent of computer equipment, training has become more formal, continuous, and resource-intensive. Nonetheless, it is essential to keep the workforce up-to-date and adaptable.

Offering employee training opportunities can minimize resistance to change and expedite the adoption of new technology with minimal disruption. By investing in continuous learning, businesses can adapt to technological changes, drive innovation, and achieve sustainable IT solutions.

Have a system to measure and analyze technological change results

Create mechanisms to evaluate the impact of technology innovation initiatives. Define relevant metrics and performance indicators to monitor progress and assess project success. Regularly review and analyze results, use an employee feedback loop, and adopt the insights gained to polish strategies, prioritize investments, and make informed, data-driven decisions.

Practical examples of technological change

In addition to the above guidelines for implementing technological change, here are some real-life examples to help you see what a successful implementation could look like:

PayPal

Since it was born in 1998, PayPal has undergone a remarkable journey of growth and adaptation, closely aligning itself with the ever-evolving landscape of technology. Today, it is a household name in digital payment systems, boasting a vast network and widespread consumer use. 

From a technological perspective, PayPal’s strategic engine is finely tuned, focusing on five key investment areas that drive its continued success.

• Security: At the forefront of PayPal’s priorities is ensuring the utmost protection for its users. In an era of increasing security breaches, offering a trusted and secure platform is essential. Users rely on PayPal to safeguard their financial transactions and sensitive information, making security paramount.
• Stability: With over 35 million merchants worldwide trusting PayPal as a means of payment in their businesses, maintaining high service quality, reliability, and uninterrupted availability is paramount. Ensuring stability is essential for both merchants and customers alike.
• Speed and Innovation: PayPal recognizes the need keep abreast of technological innovation and maintain a pace of innovation that surpasses industry standards. Significant investments are made in platforms, tools, and product development processes to facilitate innovation and eliminate barriers that may impede progress.
• Scalability: PayPal’s remarkable growth, from processing $354 billion in payments in 2016 to $1.36 trillion in 2022, necessitates a robust technological architecture capable of expanding its capacity without requiring extensive engineering overhauls. Scalability is crucial to accommodate such exponential growth.
• Efficiency: To ensure cost-effectiveness and operational excellence across all technological areas, PayPal closely monitors efficiency and expenditure. Striving for the lowest cost per transaction while maintaining exceptional operational performance is an ongoing endeavor.

PayPal has assembled a highly qualified technology team to address these formidable challenges. The company’s global investment in technology and development exceeded $3.2 billion in the past year alone.

Organized into four primary layers, PayPal’s technology ecosystem is structured for seamless operation:

• Infrastructure: PayPal’s technology stack comprises databases, data lakes, in-house servers, and public cloud infrastructure. This layer houses critical user data, including profiles, behavioral patterns, transaction records, and risk-related information.
• Foundational Technologies: The second layer consists of core technologies that underpin all PayPal products and services. These encompass various functionalities, including internal tools for developers and engineers and services like caching, messaging, password management, and cryptography.
• Common Platforms: This layer encompasses the technological components that drive PayPal’s products and services, including identity verification, payment processing, risk assessment, compliance with legal obligations, privacy protection, taxation, financial transactions, and treasury management.
• Merchant, Consumer, and Developer Experience: At the top layer lies the user-facing interface, comprising web interfaces, mobile applications, and APIs. These elements empower customers to interact with PayPal’s services interactively and programmatically, forming the heart of the user experience.

As a company serving over 431 million active accounts, PayPal recognizes the immense potential of artificial intelligence (AI) in shaping the future of payments and commerce. Harnessing data to unlock value for consumers and businesses is a core focus.

For instance, between 2019 and 2022, PayPal witnessed a nearly 50% reduction in its loss rate, mainly attributable to algorithms and AI technology advancements. Deep learning models are deployed and refined swiftly, adapting to evolving fraud patterns to protect customers effectively.

Furthermore, PayPal is shaping the next generation of digital currencies and the corresponding financial infrastructure. The company has made substantial investments in blockchain technology, acquired specialized talent, and filed patents related to cryptocurrencies, underscoring its commitment to innovation in the financial sector.

CVS

CVS underwent a transformative shift following its merger with insurance provider Aetna in 2017. It pivoted from its initial focus on insurance sales to a concerted technology-based effort to draw more individuals into its stores and offer various products and services.

At the core of this innovative approach are HealthHUBs, which extend an inviting proposition to insured customers. These individuals can consult in-store with dedicated coaches who guide them through healthcare experiences. The value proposition inherent in this approach is twofold.

Firstly, by orchestrating the entirety of the healthcare journey, a company gains the capacity to manage an individual’s overall health proactively. This, in turn, leads to the potential for reduced medical costs through the delivery of enhanced value.

Secondly, the elevated and improved customer experience engenders loyalty and cultivates a stronger bond. Individuals with a positive HealthHUB experience are more inclined to fill their prescriptions at CVS stores and continue patronizing CVS for their healthcare needs. Furthermore, many of these services are covered under Aetna insurance, fostering an even deeper connection between the customer and the company.

To achieve this type of technological change, CVS used artificial intelligence (AI) and advanced analytics to direct consumers to the most appropriate destinations within its pharmacy, retail, and health insurance divisions, offering a seamless and comprehensive healthcare solution.

Colorado DMV

Colorado’s Department of Motor Vehicles (DMV) has set an example of how simple technological enhancements can significantly enhance the customer experience, proving that not all technological solutions need to be flashy or complex.

In 2017, the Colorado DMV introduced a kiosk system called the Colorado MV Express to provide residents with a convenient and efficient way to access frequently requested DMV services. 

These standalone kiosks were strategically placed at 57 locations across 33 counties, including local grocery stores and DMV offices.

Since the inception of this program, more than 1.8 million Colorado residents have benefited from this service. Within minutes, they can complete tasks such as motor vehicle renewals, obtaining duplicate tags, checking the status of vehicle registrations, or acquiring a state-wide park pass. 

The most significant advantage is that these convenient kiosk systems allow residents to skip the traditionally long lines at DMV offices.

Moreover, in response to these issues posed by the COVID-19 pandemic, the DMV introduced a new appointment system in 2021. This system allows Coloradans to check in for their DMV services remotely using text messages or QR codes. 

Customers receive a text notification when it’s time to enter the driver’s license office, streamlining the process and reducing wait times.

As a result of these innovations, the average customer experience has been notably enhanced. Service times average 19 minutes, down from 25 minutes pre-pandemic. This translates to nearly 6,400 customers being efficiently served daily, demonstrating the successful fusion of technology and customer service at the Colorado DMV.

The pros and cons of technological change

When contemplating technological change within your business, it’s imperative to first look at its advantages:

Enables remote or hybrid workforces

Technological change can revolutionize how businesses operate, creating a larger remote or hybrid workforce. This transformation has enhanced flexibility and accessibility for employees, enabling them to work from various locations.

Adopting wireless internet access and cloud storage has been pivotal in this shift. Mobile employees can now access company resources and information virtually anywhere, whether at home, on the road, or at a satellite office.

This level of accessibility and efficiency has led to increased productivity among mobile workers, as they no longer need to be tied to a specific physical location to perform their tasks effectively.

Enhances communication and utilizes automation for mediocre tasks

Technology has transformed how employees work and how they communicate. Clients and colleagues can now connect swiftly through email, instant messaging, and video conferencing tools.

Additionally, the adoption of e-signature technology has revolutionized document processing. This innovation allows for the quick and secure signing of contracts and agreements, eliminating the need for physical paperwork and significantly reducing administrative overhead.

Allows the globalization of business operations

Technological change has played a vital role in globalizing business operations. People can now work and conduct business virtually anywhere, transcending geographical boundaries.

The growing availability of high-speed internet and the proliferation of collaboration tools and platforms allowed companies to tap into a worldwide talent pool and expand their reach across international markets.

Optimizes resources and cost-effective planning

Introducing remote work and technological solutions has allowed companies to optimize their resources on a large scale. This optimization extends to real estate, as fewer physical office spaces are required when employees work remotely.

As a result, companies can plan their business activities more cost-effectively, as they no longer need to invest heavily in maintaining and expanding office spaces. 

Improves a company’s competitive edge

Technological change enhances competitiveness and allows businesses to differentiate themselves by offering unique value propositions to their customers.

Technologies like AI and machine learning (ML) allow personalized customer experiences and the ability to forecast future trends, providing a competitive edge in today’s dynamic business landscape.

On the other hand, organizations also need to be aware of the cons of technological change, which are:

IT risks related to cybersecurity and data breaches

In today’s digital age, privacy has emerged as a paramount concern. Personal data is easily accessible and shareable but is at risk of misuse, raising worries about surveillance and cybercrime.

Increased reliance on technology carries the risk of cybersecurity breaches, resulting in data loss, identity theft, and other security hazards.

Businesses are susceptible to potential data loss even with robust safeguards like firewalls and appropriate software. Regular IT risk assessments of all technology are crucial to mitigate these risks.

Improperly balancing the adoption of technology and employee needs

Often, there’s a greater focus on pushing technological advancements than on how they can empower employees to perform better. Inadequate training plans and assessments can hinder technological change from yielding meaningful results within an organization.

Risk of change fatigue

The simultaneous adoption of too much technology without an incremental approach can lead to employee change fatigue. Employees need time to adapt to new tools, and a rushed implementation may hinder their adoption and proficiency.

All these disadvantages underscore the critical importance of effectively implementing technological change within an organization.

Final steps on technological change

The ever-evolving nature of technological change necessitates a proactive stance. Relying on external forces to chart our course is a luxury we cannot afford.

Instead, organizations must harness technology to cultivate a culture of experimentation, continuous training, and innovation. This approach empowers us to confront uncertainty head-on, enabling our businesses to soar to new heights. Technological change is imperative for business growth in the modern era.

It can enhance operational efficiency, boost productivity, elevate customer experiences, refine data management and analysis, and secure a competitive edge. 

By establishing nimble, learning-focused organizations and staying abreast of the latest technological advancements, businesses can attain enduring success and flourish in today’s fast-paced digital terrain.