Success Factors in New Technology Implementation Pat Holahan Kai Wang Howe School of technology Management Stevens Institute of Technology HSATM Roundtable April 24, 2012 Hosted by Horizon Blue Cross Blue Shield

Introduction – An Unpleasant Truth Technological change initiatives continue to experience a failure rate approaching 70%... (Standish 2009, IBM 2008, Raps 2004, Beer 2003, HBR 2000) Research has shown that the top 10 reasons why technology projects fail have nothing to do with the technology itself; it has to do with the people and implementation processes. “Good idea…failed implementation”

Introduction- What We Know Technology Acceptance Model (TAM) (Davis, 1989) Perceived Usefulness (PU) Perceived Ease of Use (PEOU) Attitude Toward Technology Usage Intention to Use Technology Behavior Technology Use

Construct Definitions Perceived usefulness – extent to which the technology is perceived to be better than prior practice (e.g. 4S iPhone). Perceived ease of use – extent to which the technology is perceived as easy to master and use.

TAM explains about 40% of the variance on individuals’ intention to use/use of a new technology (Agarwal & Karahanna, 2000; Venkatesh et al., 2003; Venkatesh & Bala, 2008) TAM explains voluntary adoption best, i.e., when the individual is autonomous in deciding to adopt/use a new technology. Researchers most often measure intention to use vs. actual use. When use is measured, most often “duration or frequency of use” is measured. Introduction- So What’s Not To Like?

How is technology typically introduced in the workplace? What are the limitations of the TAM model given the above? Introduction- So What’s Not To Like?

Technology Acceptance in Organizations Two stages 1 st Stage - Adoption by organization 2 nd Stage – Adoption/Actual usage by targeted users Contingent authority adoption decision (CAAD). Under CAAD users may not see the technology as useful or easy to use. TAM is not sufficient Developed for voluntary adoption Limited practical advice for managers Managers are concerned with both quality and consistency of use.

Introduction – Our Research Goals Develop and test a generic and parsimonious technology acceptance model that focuses on determinants of perceived usefulness and ease and which relate to actions managers/technology developers can take to increase technology acceptance in the workplace. Operationalize technology acceptance as both consistency and quality of technology use. Understand how determinants of technology acceptance differentially relate to consistency and quality of use.

Example photo layout TAM3 Determinants for perceived usefulness and perceived ease of use ( Venkatesh & Davis, 2000; Venkatesh, 2000; Venkatesh & Bala, 2008) Many determinants individual difference factors Many determinants specific to computer technology (Venkatesh, Bala,2008) 9

Example photo layout Compatibility w/ User’s Workplace Values Individual Attributes Implementation climate Organizational Attributes Perceived Usefulness Perceived Ease of Use Consistency of use Quality of use Technology Acceptance Task-Technology Attributes Compatibility w/ Existing Work Processes H1 H2 H4 H3 Research Model - Hypotheses 1-4 H2, H3 *All predicted relationships are positive H4

Construct Definitions Compatibility w/ User’s Workplace Values – extent to which the user perceives that technology use will foster the fulfillment of important workplace values. Implementation Climate – extent to which the user perceives technology use is: -- expected, -- supported, -- rewarded.

Construct Definitions Compatibility w/ Existing Work Processes – extent to which the technology is perceived as consistent with current workflow processes or practices. Or, extent to which current work processes will remain unchanged.

Example photo layout Compatibility w/ User’s Workplace Values Individual Attributes Implementation climate Organizational Attributes Perceived Usefulness Perceived Ease of Use Consistency of use Quality of use Technology Acceptance Task-Technology Attributes Compatibility w/ Existing Work Processes H1 H2 H4 H3 Research Model - Hypotheses 1-4 H2, H3 *All predicted relationships are positive H4

Hypotheses H1: Perceived usefulness will fully mediate the effect of values compatibility on technology acceptance. – Values compatibility is a determinant of technology adoption (Karahanna et al., 2006; Rogers, 2005) – Values compatibility is positively related to perceived usefulness (Karahanna et al., 2006) – Effect of values on technology acceptance has been shown to be mediated by perceived usefulness (Akour et al., 2006) H2: Perceived usefulness will partially mediate the effect of implementation climate on technology acceptance. – When technology use is seen as expected, supported and rewarded targeted users perceptions of its usefulness should be enhanced. – Climate has a direct effect on implementation effectiveness (Klein et al., 2001; Holahan et al., 2004) 14

Hypotheses H3: Perceived ease of use will partially mediate the effect of implementation climate on technology acceptance. – When technology use is seen as expected, supported and rewarded targeted users perceptions of its ease of use should be enhanced. – Climate has a direct effect on implementation effectiveness (Klein et al., 2001; Holahan et al., 2004) H4: Perceived ease of use will partially mediate the effect of compatibility with work processes on technology acceptance. – work process compatibility is positively related to ease of use Less change, transfer of learning effect Easier to learn (Karahanna et al. 2006). – partial mediation: a new technology can be highly compatible with existing work practices but still be highly complex and difficult to use

Hypotheses H5: When the implementation climate is strong, but the technology is not perceived to be congruent with the user’s workplace values, consistency of technology use will be high, but quality of technology use will be low. H6: When the implementation climate is strong and the technology is perceived to be congruent with the user’s workplace values, consistency and quality of technology use will be high. – Compliance vs. commitment (O’Reilly & Chatman, 1986; Sussman & Vecchio, 1991) – Climate is related to compliance. – Values compatibility is related to commitment. 16

Research Hypotheses 5-6 H5. When Climate is strong but Values Compat is low: Consis of Use will be high/ Quality of Use will be low H6. When Climate is strong and Values Compat is high: Consis of Use will be high/ Quality of Use will be high Failed Implementation ??? Climate Weak Strong Value Compatibility High Low

Research Results H1 supported H2 supported H3 supported H4 partially supported: found full vs. partial mediation H5 and H6: supported

Results – Summary Supported determinants of TAM variables (PU, PEOU) Compatibility with workplace values Compatibility with work processes Climate Technology Acceptance operationalized along two dimensions: – Consistency of use – Quality of use Supported differential effects of values compatibility and climate on consistency and quality of use 19

Discussion – Practical Implications Given the results, what are some of the pre- implementation implications for: --Technology developers? --Technology implementers? -- Change management?

Discussion – Practical Implications H1: The effect of values compatibility on technology use was fully mediated by perceived usefulness. Users’ workplace values exert a strong influence on how useful a technology is perceived to be. Understand workplace values from the employees’ (users’) perspective. Useful input to technology developers. Address “fit” or “lack of fit” of the technology with user’s workplace values when introducing a new technology (e.g. VPS kiosks improving quality of healthcare vs. decreasing patient service)

Discussion – Practical Implications H2 and H3: Climate influenced perceptions of usefulness and ease of use. Climate also had a direct effect on technology use. Create strong implementation climates to promote technology acceptance. How one creates a strong climate is equifinal. Climate construct is a perceptual variable. Seek feedback on strength of climate.

Discussion – Practical Implications H4: The effect of work process compatibility on technology use was fully mediated by perceived ease of use. The technology’s compatibility with work processes exerts a strong influence on perceptions of how easy a new technology is to use. New technologies that involve only incremental change in work processes are more readily accepted. Consider modular development and/or phased implementation. Strong implementation climates can have an impact on perceived ease of use. When the new technology will involve significant change in work processes additional efforts to build a strong implementation climate will be needed.

Discussion – Practical Implications H5 and H6: Differential effects of workplace values compatibility and climate on technology use. Many times organizations do not realize a ROI from new technology deployments. How the technology is being used i.e., quality of use is an important consideration. Need to measure. Quality of use is a function of climate and values compatibility. Both are needed. – A strong climate predicted consistency of use, but not quality of use. Critical that technology developers/implementers understand users’ workplace values.

Some Important Takeaways Understand and take into account workplace values from the employees’ perspective. Stress the technology’s compatibility with workplace values when appropriate. Create strong implementation climates – Climate construct is a perceptual variable – Seek feedback on strength of climate New technologies that involve only incremental change in work processes are more readily accepted – Consider phased or modular implementation if possible. – Strong implementation climates can have an impact on perceived ease of use.