Technology Failures - Essay Example

technology failure A Paper Presented to Department In Partial Fulfillment of the Requirements for the Degree by March 2010 Technology Failure Different technologies play a vital role, in the development and prosperity of a country or organization, in present times. But their failure can cause a serious attack to the economy, repute and status of the concerned organization. In the paper we are focusing the Iridium Technology, the causes of its failure and the ramifications on different industrial domains or entities like manufacturer, suppliers, community, employees, government, and competing technologies. In 1999 Iridium LLC and ICO Global Communications services were declared bankrupt due to serious financial issues regarding interests and financing commitments. And this scenario induced a sense of gloom in the industry because the remaining industries were also facing the same financial problems. Iridium LLC was the first in introducing satellite telephone industry in the market and it gained a great fame in its period. So it’s worthwhile to discuss its plight. It’s a collection of round about 66 satellites and the system is using Inter -Satellite Links between the satellites. These Inter-Satellite Links provide switching of user data from one satellite to the other one and ultimately to the destination satellite. These links help in reducing the number of required gateways for communication. The Iridium technology was using 48 spot beams and Time Division Multiple Access method for user capacity. Iridium was a project of Motorola with so many dreams. This project was started by the Motorola executive Barry Bertinger along with some engineers after the complaint of a farmer’s wife that Not being able to phone the US while on holiday in the Caribbean. This complaint was a sort of challenge for the heroes of the industry. The heroes or engineers of the industry said no problem we can do it and would provide a constellation of the satellites that will enable us to ring every corner of the globe. To ring the globe needs a special consideration that this sort of communication requires special thoughts about cost issues for implementing Iridium. Due to the poor management and disappointing technology the Iridium project pushed the satellite phone technology into darkness. For understanding the failure of Iridium technology different factors are being considered to evaluate the disaster tale. The majors reasons for failure of any project belonging to any domain are the same and these includes bad planning, insufficient involvement of management or lack of management control, adoption of wrong marketing methods and adoption of flop technology in the sense that not considering the market trends. The first mistake of Iridium LLC was that they have developed their own stand alone network in the space or simply a proprietary sort of network was devised for the Iridium technology. The call from a telephone or handset accesses the nearest satellite and travels across the space through linked satellites and then ultimately reached down the destination point. Such systems are prone to the problem that the technical manpower which is working on the proprietary technology is also unaware of the prevailing technologies because the compatibility with the existing technologies, which are not using satellite system, is also a crucial technical management issue. So the manufacturer will also be affected by manufacturing such a technology which has its own horizons and not comprising with other prevailing standards. The lack of backward and prevailing standard compatibility adds worth to the new technology. When we have to discuss the customer adoption of the technology then this point also comes into the mind that customer ever demand a facility which first help him or her in the existing domain rather than of buying or implementing a new one. The price introduced in the market was also very surprising. A business ever demands that before launching a campaign in business market it’s essential to evaluate the customer trends in the market. What are actually the needs of customer with respect to technology i.e. customer’s views about cost, performance, availability, services and many more. But in case of Iridium technology no such analysis was performed to analyze the market trends with respect to customer. The cost of handsets which was introduced in the market was 1900 pounds which was a surprising amount for the customers. If we will have to evaluate Iridium technology with present times then the price of the handset would be considered as a blunder with respect to marketing. In present times if a company is going to launch a selling campaign it would have to provide lucrative packages for the customers e.g. initially gaining no call charges in the sense that if the price of the handset is 1900 pound then in that amount a free introductory balance is also awarded to the customer e.g. say a free balance of 700 pounds is also included in the total amount. But customer ever demands flexible or affordable pricing. On the other hand the price of the call was also too much which was round about 5 pound per minute. Further the handsets, which were manufactured, were also very bulky in weight and the weight of each handset was about one pound. So the factors like weight of hand set, heavy costs of handset and call forced the customers that not to adopt the technology. So the manufacturer or producer of the technology must try to focus the issues of cost and weight of the handset before launching the technology. We suppose if the consideration are not given to such factors due to unknown reasons but after the launch of Iridium technology the situation was same. The senior management had not taken the pain to explore the market and readjust the price of handset and call rate. By doing such an action the company can save itself at some extent from such anarchy though not completely. The customers who adopted this unreliable technology were also worried due to different problems which they were facing during its operation. The technology was focusing on the line of sight access which means that the antenna of the handset and satellite are depending on the line of sight but it’s not the case in the conventional mobile phones. So the problem with Iridium technology was that indoor handling of the set was not possible so first you must have to go out and then operate it. Due to this reason the customers were not attracted by the technology and adoption rate was very less. This drawback of Iridium technology comes in the domain that whenever launching a new technology the proper testing is very essential which was not there in the case of Iridium technology and not an alternative of line of sight was proposed before launching the technology. Customer ever demands a solution of a problem so there must be the availability of alternative options for better performance and efficiency to satisfy the customer. If a problem of the customer is solved within limited time then the customer will gain confidence and would a helping pillar in marketing the product otherwise an annoying customer will also influence others not to follow the product and the ratio of negative impact will increase briskly. A satisfied customer can influence either one or two customer in the adoption of a particular case but in case of an annoying customer the ratio of the customer will increase who would not like to buy the technology after knowing the experience of the unsatisfied customer. In 1999 the Iridium was declared as bankrupt after few months of launching the Iridium technology. Due to the flaws which are stated above the Iridium technology was unable to get fame in the temporary society. Iridium succeeded in obtaining only a less than 20,000 customers from more than 1,000,000 selling points. The marketing campaign was about a 100 million dollar campaign and it resulted in a failure. Due to the failure the top executives were fired from the scenario and disappointment was prevailing at all levels. So when a technology fails the employees also have to face serious problems due to the bad management of the top executives. Turnover rate of the employees increases and they try to find out new jobs. Employees ever look secure jobs. And it’s not true that in an organization all the employees who are working there are of no worth. Most the employees leave the organizations due to the mismanagement of the seniors. So firing of the employees result due to the mismanagement that the employees who were hired for the technical management of Iridium project were not competent and this incompetency ultimately resulted in a big bang. Time to market for every innovative technology is considered as a business point. If the idea is launched late it would not be applauded by the community if the community has already got awareness about such an idea. The Iridium project started in 1987 and it was launched in 1999. So Iridium took eleven years for introducing it in the market. During these eleven years the lifestyle of the community has changed due to the new emerging technologies, customer needs and new market trends. The Iridium was well aware about the changes but still an outdated product was introduced in the market. Outdated in the sense the set was too much heavy and price was not fixed reasonably. So when an idea is not launched in the market within the defined timeline the manufacturers or producers of the product will face serious financial losses. Iridium was an innovative idea and when an innovative idea is taken into account then it is essential that to analyze its diverse stakeholders in a more professional way. Simply to think about the needs and requirements of the advance or modern stakeholders and not the needs of a stakeholders a decade back. If deployment time was shortened and Iridium launched its idea five years earlier then the market can be more beneficial than the worse one which they have faced in 1999. Customer ever demands user friendly devices but it was not so in the case of Iridium technology. The users of Iridium handsets were required to undergo a special training about the operation of the handset. Users never like to learn more complex sort of functions about handling a device rather something user friendly. The company also provided a cartridge to all users for switching purposes i.e. from satellite to conventional mobile networks. So it’s also a problem for the users that they were unable to switch to other networks using a single device. Simply Iridium has adopted a very cheap approach in launching their campaign in a technologically advance era of 1999. Their manufacturer can produce smart sets and can provide all the facilities in the same device. When users have to find facilities in the same device they would prefer it rather than of collecting a set of surprising inventions. It was also the fault at Iridium’s end that the whole technology was not integrated well which resulted in the failure and the customers loosed their confidence in adopting it. Ultimately due to such fallacies the company was declared bankrupt. The company was unable to provide sufficient services to its customers. The partners of Iridium could not provide the services within the defined timeline. It was also a blunder at the end of senior management because it was very essential for Iridium that they would have to build sufficient customer service center in the main areas of their business before the launch of the product. In UK the same situation was prevailing that Orange could not provide the services to the customers. So in the presence of limited functionality, fraud protection and lack or customer services it was not possible for Iridium to stay in the market. For a failed technology the confidence of a customer can only be regain if all the customer complaints are eliminated in an efficient way. And when customer will be satisfied ultimately manufacturer and suppliers will also be satisfied with their product. Other companies or competitors have adopted different techniques after the failure of Iridium technology. For example Globalstar focused the markets of developing countries and remote areas of US where the facility of land line and mobile phone networks was not available. The executives of Iridium technology had not tried to search other business markets where the technology can be adjusted with all its pits and falls. The strategies for uplifting the company are very crucial. For Iridium there can be certain ways for making it strong economically. Iridium can rise itself by making alliance with other industries and it would help in uplifting the company revenue. As we have discussed the technology was very complex which was introduced by Iridium and there was the need of training and this thing produce hindrance in marketing. A company must design a technology which would provide user friendly and easy to use interfaces without any training. The Iridium technology has not provided sufficient customer services and this added flee of customers from buying the technology. A proper customer services is required before launching an innovative technology in the market for solving the user problems and this factor adds much in boosting the economy of the company. So it is the responsibility of the CEO that he must cater about such issues otherwise he is not able for the position of a CEO. All the things like government funding about such products, supplier satisfaction, manufacturer satisfaction, employees satisfaction are directly related to the satisfaction of the customers. So if the customer is affected by wrong management or a technology which is not worthwhile then manufacturer will ultimately face serious technological problems. The suppliers would loose the market and they would try to look for alternative ways. The government organizations and other organizations like banks would stop funding for such projects. The Iridium executives can boost the company if they have opted alternative options with respect to market, customer trends towards Iridium. And perhaps they can cope with the existing anarchy if they would try to tackle all the matters within limited time by keeping in view the changing market trends. The expansion to other markets was also a solution but they have not opted. References Iridium’s Downfall: The Marketing took a back seat to science. Wall St. Journal August 18, 1999. Vol CCXXXIV, No 34 Page A1. ISSN0099-9660 Laurel Burton, Brian Holl, Joes Luis Lopus, George Singletary. (1999) An Analysis of Iridium. TLEN 5700 Capstone Paper Sidney Frinkelstein, Shade H. Sanford. (2000). "Learning from Corporate Mistakes: The Rise and Fall of Iridium." Organizational Dynamics, 29 (2):138-148 Jeff Hawk. (2005). Technology Tracks Causalities, Assets. JH Technology Reviving Iridium: Iridium’s Failure. http://www.incmrindia.org/free%20resouces/casestudies /Iridium1.htm Read More