Chapter 17. System Adoption

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1 Chapter 17 System Adoption Systems adoption is one of core IS issues that has been extensively investigated. Every new type of IS renews interest in this topic. In a brief timeline, investigations started with office automation systems, continued with TPS and MIS, switched to DSS, communication systems, GSS, KWS, and today are focused on e-commerce, supply chain, medical IS, and social media. Without successful adoption of IS, all the development money and effort are wasted. Worse yet, the organization will not be able to accomplish the planned goals. But what does determine the adoption of IS? Why can it fail? How can the adoption process be managed? The chapter will examine these important questions. What Systems Adoption Is System adoption, also called system acceptance, is a process of translating an IS into regular use. The focus is on IS users, especially primary users. Since they directly manipulate an IS, primary users experience most of the stress a new system brings. They have to learn how to use it, and to change the way they do their work. Adopting a new system runs in parallel with adopting new processes. This fact apparently complicates adoption. However, sometimes users are not fully aware that a new system is going to change the way they do their work. This change is quite significant in case of ERPS. That is why companies usually introduce ERPS gradually, covering business functions one by one. But exceptions have been noted. For example, one pharmaceutical company in the U.S. decided to implement a large ERPS footprint at once. It switched off its old systems around the end of a year, and switched on its new ERPS three weeks later. The transition and adoption were a success. In another case, a producer of electrical energy already had a larger ERPS footprint, when it added another one to support the HR function. However, mid-level managers resisted to adopt the system as primary users. The new system required a big change in the way they approved work hours and business expenses. They were supposed to do the work directly in the system instead of using a familiar combination of paper trail and generous clerical support as in the past. The difference between these two companies in accepting a new ERPS has to do with differences in organizational cultures of either company.

2 Factors of Systems Adoption System adoption can be understood from the perspective of factors of adoption and the adoption process. The work of Sociologist Everett Rogers is helpful on both counts. Adoption factors are characteristics of a system and of the adoption situation that influence the likelihood (success) of adoption. Figure 2 show five factors as follows (note the acronym CRACTV for easier memorizing): Complexity Relative Advantage Compatibility Trialability Visibility. Complexity is about the level of effort a new IS requires. This dimension has to do with characteristics of an IS as perceived by a potential adopter. Then, this person weighs how easy or difficult it is to use a new system. The larger the effort, the less likely the system adoption is. This inverse relationship is marked by a minus in Figure 1. Complexity is quite intuitive a dimension. Think about choices you make when facing two devices that are comparable in capabilities but one is more difficult to use than the other. As opting for the path of least resistance is a common human trait, most people would go for the easier to use device. Figure 1. System adoption factors Relative Advantage is about benefits that a new IS has over the old one. This dimension is assessed so that a person exposed to a new system weighs how useful it can be. The usefulness, of course, has to do with system characteristics. But the assessment is more than a reflection of the system s objective traits. Individual interest plays a role in the weighing potential benefits. For example, some people may wish to improve their professional work, and this motive could make them see more than others. Or a person may believe that adopting a system may be evaluated positively by the manager in charge. The larger the relative

3 advantage, the more likely the system adoption is. This direct relationship is marked by a plus in Figure 1. Compatibility is about similarities between the way of working with old and new IS. People learn faster and usually adjust better to new processes that have more in common with current ones than to largely unfamiliar processes. This again has to do with the learning effort but also with interest in maintaining a standard level of productivity and quality of work. For example, adopting the first file sharing system ever is challenging for a good number of users. But once the GSS is adopted and used, it is easier for the users to switch to a comparable Web-based GSS. Therefore, the larger the compatibility, the more likely adoption is. Trialability is about the magnitude of opportunities for exploring a new IS. Car dealers know that it may help sales if they allow potential customers to take a car for a test drive. Similarly, it has become a common practice among software producers to provide software on a trial basis. The expectation is that trialability will help users discover features they appreciate, which will prompt them to buy the software. This dimension is apparently dependent on management practices and not only on system characteristics. The bigger the trialability, the more likely the adoption is. Visibility is about the extent to which a new IS and its effects are visible within an organization. This dimension has to do with communication. It makes sense that communicating about a system prepared for adoption may help its adoption. But this is the case only if the word about the system is good. If the system does not enjoy good press, such visibility can reduce chances for its acceptance. In general, the greater the visibility, the greater the chances for communicating experiences with an innovation - both supportive and non-supportive. Management of adoption needs to take care of rumor mills that portray a new system in a bad light without a good reason. Adoption Process Rogers looks at adoption as a process of innovation diffusion, which involves a communication channel, time, and members of a social context, such as a company. There are five steps in adoption process as depicted in Figure 2. At the awareness step, an individual is exposed to a new IS but knows little about it. For example, managers announce a new system and allow access to it. This exposes the system to a potential user but the journey is just at the start. The individual may proceed to the interest step if he/she takes action to learn more about the system. This may include trying to perform some tasks with the system for test purposes. Also, one may try to get informed more about the system by consulting experts and the user documentation.

4 Figure 2. System adoption process based on Rogers s model The step of evaluating/deciding follows, at which the individual mentally applies the IS to his/her present and anticipated future situation. Cost/benefit weighing of the new and old system s characteristics is carried out. This weighing most likely strikes the ground between satisfycing and rational decision making. Based on this, the hopeful user decides whether or not to try the system for real at work. If the systems evaluation turns positive, the hopeful user proceeds to trial implementation. Although the system is used at work, there is another hurdle before the final adoption. The second decision point is based on the system s performance at work. If the user is satisfied,, he/she finally confirms the adoption. The probability of reversing the decision is small. However, if the system does not pass this test, it gets rejected for the time being. Pace of Innovation Adoption Technology diffusion is graphed as an S-Curve when the percentage of adopters is plotted over time. Figure 3 shows adoption of various technologies by the US households between The important aspect of the S-curve is the inflection point (or tipping point ) at which the curve changes from a slow rise to a steep hike. After that, a technology keeps spreading to some saturation point (the maximum saturation is 100%). The S-curve is longer and less steep for some technologies than for others. Notice how similar are the curves for the computer (PC), Internet, and cell phone. Notice also how different are the curves for the telephone (landline phone) and for the cell phone. Research has shown that the adoption of any technological innovation follows the law of normal distribution. In large samples, adopters split into two balanced groups a half of people are earlier adopters and a half makes later adopters. This is shown in Figure 4 as Early Majority and Late Majority. Fine grained grouping shows that quick adopters (Innovators plus Early Adopters) and slow adopters (Laggards) also balance each other each making 16% of all adopters. The normal distribution of adopters applies to IS as well.

5 Figure 3. Diffusion of consumer technologies Figure 4. Normal distribution of adopters Tensions Over New Systems While the adoption process trickles down to the individual organizational members, the behavior of individuals is influenced by interests of their particular occupational group. A new IS can affect differently those interest positions. For example, top managers may have interests different from mid-level managers; professionals can have interests different from those of clerks or managers; business professionals and IS professionals may not have the same interests; there can be differences between different groups of business professionals; and so on. In general, this is the domain of organizational politics that has to do with different interests and agendas, and fighting between opposed groups.

6 Due to different interest positions, different occupational groups can react differently to new IS and associated business processes. A group can accept or reject new IS and processes. In result, the same system may enjoy acceptance by one group and suffer rejection by another. Usually, a stronger party wins and protects its interest. Different scenarios of system adoption can satisfy broader organizational interests in various degrees. The following discussion describes three scenarios of system adoption ranging from adoption to rejection. Adoption implies that a system is accepted in the regular use by a majority of users. An example is the introduction of MIS in American city administration in the time of mainframe computers. The users were top administrators and the systems provided financial reports. In the past, this reporting rested on the paper trail. When computer-based systems were in the development stage, these administrators provided key system requirements. They decided to keep the existing processes unchanged. The data content, input flows and system outputs were preserved. The only change was converting the paper trail to electronic format. In result, the existing organization was preserved with addition of electronic IS. Missed was the chance to optimize processes (improve process composition, simplify processes and to coordinate them better). Although the interest of top city administrators was well served, other groups experienced no particular benefit and organizational interest was just partially served. Partial Adoption implies that the system is accepted by one target user group but not by another. An example is a Financial Information System (FIS) in an American pharmaceutical company. The company s old accounting system supported accounting processes in which department-level accountants (management accountants) controlled the content and flows of financial data and reports. FIS introduced different reporting standards, and placed the corporate accountants in the lead role. The reporting became centralized at the executive level. Thus, the new system was in interest of one group of accountants and managers (those at the corporate level) over other group of accountants and managers (those at the department level). It also catered to external stakeholders. Organizational interest was served in relation to external stakeholders. The scenario of Failed Adoption implies that a new system and associated processes are rejected by the target user group. The case in point is Electronic Medical Record Systems (EMRS) in three hospitals in Quebec in 2000s. EMRS were promoted by hospital management as a vehicle of moving from the paper trail to electronic data management. Nurses accepted the change, which basically relieved them from some tasks they had to do upon doctors orders. However, doctors pushed back, arguing that working with systems wasted their time. For recording diagnoses and drug orders the doctors could not count any longer on nurses help. Instead, doctors had to enter these directly into EMRS. The doctors rejection resulted in returning to the old processes. In this case, doctors interest was preserved, while nurses did not get a break and hospital administrators could not reach expected data management goals. Organizational interest was not served either, since ERMS investments were wasted and technological progress was stalled.

7 Managing IS Adoption Process The individual adoption process needs to be managed. Managers can do much to ease system adoption. Figure 5 combines individual adoption activities with management activities into a change management process. Each actor has their own swim lane. The steps of evaluation and implementation as well as the decisions following these steps are marked as critical. It is so because the user s decisions may or may not give a go to a system. What exactly can managers do to help adoption? To arouse a potential user s awareness, a manager needs to promote and give access to IS. Promotion can be done via various communication channels, such as meetings, , company's newsletter, and smart phone. By giving passwords to users, managers facilitate access to IS. To help potential users to explore the system at the interest step, managers can focus on motivating and training. Motivating should include a clear explanation of system benefits. Managers should also allocate free time for users to explore the system. The training part involves allocating funding for trainers and for facilities. The critical period starts with the user s evaluating of the system. Managers can stimulate this activity by giving and promising rewards. Examples are a public recognition, monetary rewards, and promise of professional advancement. Then, there is a set of repeatable activities that managers can direct toward users who get past to the implementation step. Figure 5. Change management process Assessing the adoption rate and users satisfaction is performed via periodical surveys and discussion forums electronic bulletin boards, internal social media, and others. While the

8 adoption rate just shows numerically how many of the expected number of users have implemented the system at work, the forums are helpful in learning what causes dissatisfaction. Troubling part should be further paid attention to through system maintenance activities. System maintenance is about fixing problems with IS (software errors, user interface issues, size of storage and functioning speed, etc.). Money and time for system maintenance must be allocated in order to manage the level of user satisfaction, and definitely so to prevent a surge of dissatisfaction. There will always be some resistance to the system. Managing adoption implies that a manager monitors the process, detects early signs of opposition, and deals with it. Needless opposition should be blocked. Managers should also facilitate organizational learning. They should promote enthusiastic users (early adopters), give money incentives, and promise other benefits similarly like when stimulating adoption. It is important not only to push for adoption targets, but also to celebrate achievements in the adoption process. This includes marking landmarks, such as significant adoption rates (75%, 80%, etc.). The champion adopters are to be recognized publicly as trailblazers giving an example to others. The activities during should be repeated selectively until the final user s confirmation of the system adoption. After that, managers need to perform a formal analysis of system costs (annual, cumulative) and of returns in annual intervals. The change manager should know well the employees, while keeping in mind the law of normal distribution of adopters. Innovators do not need any special care beyond providing them with early access to a system under adoption. Likewise, on the opposite end of the adopters panel, laggards may not react much to any incentives given. For these reasons, the change manager should concentrate on supporting early adopters and early majority. The manager should then work hard on mobilizing the late majority since the pace of system acceptance within it is usually critical for achieving acceptable adoption rates within a reasonable period. Questions for Study and Review 1. What is system adoption and why is it important? Give an example. 2. What is similar and what different between a system's Complexity and a system's Compatibility?

9 3. What is similar and what different between a system's Relative Advantage and a system's Compatibility? 4. Why is the adoption factor of Visibility difficult to manage? 5. How is adoption process composed? Where are the possible break points? 6. What is the distribution of system adopters in large samples like? 7. Discuss the adoption scenario that accounts for different interest positions of occupational groups. 8. Discuss the partial adoption scenario that accounts for different interest positions of occupational groups. 9. Discuss the rejection scenario that accounts for different interest positions of occupational groups. 10. Discus three activities that a change manager can deploy in support of system adoption.

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