Recently, Author/Blogger, Jim George, wrote a blog post regarding the Experience Curve and explains how major technologies can initially be expensive to adopt, even though they have advantageous features and benefits. However, over time these major technologies come down the cost curve, get less expensive, and eventually take over. These thoughts in turn can directly correlate with new nonprofit software technologies as nonprofit professionals can sometimes be hesitant when it comes to transitioning from outdated technologies to new nonprofit software solutions. Additionally, while you may be eager to make the switch to new technology solutions for your nonprofit, it can also be difficult to get rest of your organization to buy-in to your next nonprofit technology.
Below is an excerpt from Mr. George’s blog post and his perspective on the Experience Curve. Keep his thoughts in mind as your nonprofit looks to purchasing newer technology.
A new technology, one fundamentally disruptive to the established way of producing a product, is more expensive than the older method at first. Initially, it is used by “early adopters,” users who understand the value and features and are willing to pay for them. As volumes increase, the cumulative “learning” or understanding based on more and more experience drives efficiency such that overall cost of ownership is equal and then less. At some point, the general user base converts to the new product; the transition is rapid, and the older product becomes inefficient to manufacture and becomes obsolete. Strategically, a supplier of the new technology must be fully committed and well-positioned at this point. The conversion or transition process can be plotted in terms of market share. The curve is known as the “S Curve” since the initial penetration is slow (early adopters, higher price) and then undergoes a fast increase, and finally slows down as the market share approaches 100% and only late adopters and the “I’m never gonna use that new-fangled thing” crowd holds back.
At times, technology seems overwhelming as waves of new developments appear. Just as surely as bias ply tires (remember those?) were replaced by radial tires, as analog TVs were replaced by digital TVs, as cell phones transitioned from analog to digital to smart phones based on Internet connectivity, we can be certain that new forms of lightning, probably LED based but possibly other new forms (see organic LEDs), will become standard in our homes and offices. One of the biggest transitions in our lives, the conversion from petroleum-based vehicles to hybrid-electrical cars and then on to full-electrical automobiles will take place within fifty years. The initial movement to electrical powered cars is underway. Every one of the automobile companies is committing to it. Someday, our kids and grand kids will look back and wonder how we ever drove those old vehicles. Change is coming.
Does your nonprofit currently have fears of adopting new technologies? How do you think the Experience Curve applies to your nonprofit? Let us know in the comments section below! Have any interesting thoughts or ideas for a future blog topic? Give us a shout and let us know!