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THE FLORIDA STATE UNIVERSITY
COLLEGE OF COMMUNICATION
THE ADOPTION OF NEW TECHNOLOGY
AMONG SMALL CANADIAN OIL AND GAS FIRMS
By
DIANE MARY HOWARD
A Dissertation submitted to theCollege of Communicationin partial fulfillment of the
requirements for the degree ofDoctor of Philosophy
Degree Awarded:Fall Semester, 1999
Copyright 1999Diane Mary HowardAll Rights Reserved
The members of the Committee approve the dissertation of
Diane Mary Howard defended on July 14th, 1999.
----------------------------------------- John K. Mayo Professor Directing Dissertation
----------------------------------------Dan J. MontgomeryCommittee Member
----------------------------------------C. Edward WotringCommittee Member
----------------------------------------Jay D. RayburnCommittee Member
----------------------------------------Kathleen M. BurnettSchool of Information StudiesOutside Committee Member
---------------------------------------
Approved:
-----------------------------------------------------------------------Donna Marie Nudd, Chairperson, Department of Communication
------------------------------------------------------------------------John K. Mayo, Dean, College of Communication
"A journey of a thousand miles begins with but a single step".
This work is dedicated to my husband Daryl, who always has faith in me,
my father, who gave me an appreciation of school,
Aunt Mary and Uncle Tom, who made the end possible,
and to Brianne and Drew and future grandchildren,
may you follow your dreams……as I have.
iv
ACKNOWLEDGEMENTS
The doctoral program and subsequent completion of the dissertation have been
the most challenging projects I have ever undertaken. The task was further complicated
by personal hurdles and many relocations which, I am happy to say, I have overcome.
A complicated life with the demands of a new teaching post at the University of
Calgary and new marriage, along with the normal demands of everyday life and raising
two small children seemed to constantly pull me away from this study.
I want to thank my husband Daryl, for helping me complete this work by
leaving me alone in my office, especially after our honeymoon. He was not only
honorable in putting up with my constant tapping on the keyboard during key
vacations in Tucson and Cranbrook, but generously contributed emotional support in
order for me to make this project a success. I also would like to thank my father for
giving me the opportunity and encouragement to follow my dreams, and my mother,
for passing on her sense of optimism and style. I would also like to thank my Aunt
Mary and Uncle Tom for their financial contribution at the very end, when I was going
through some financial difficulty.
To Dr. John Mayo, Dean of College of Communication and Chairman of my
dissertation committee, I would like to express my sincerest gratitude. Dr. Mayo has
been very supportive throughout my post-graduate school career, challenging me to
v
pursue high standards of academic excellence. This work greatly benefited from the
many hours of laborious proof reading, revisions, and his overall attention and faith in
me to complete it.
I would like to thank the members of my dissertation committee, Dr. Dan J.
Montgomery, Dr. C. Edward Wotring, Dr. Jay D. Rayburn, and Dr. Kathleen M.
Burnett from the School of Information Studies. Dr. Sapolsky, former Chairman of the
FSU Department of Communications, was especially kind in awarding me numerous
teaching assistantships during my stay in Tallahassee. Dr. Nudd was supportive
throughout my two year stay at Florida State University, counseling me from abroad,
before I even commenced the program. Also a special thank you to the staff at Florida
State University, specifically Diane Maxwell, who helped me to overcome daily
personal, teaching and scheduling problems during my two year program of studies at
FSU.
I am also grateful to Lorne Fugimoto, the vendor at DigiRule, who gave me
inside leads to track the innovation in this research project, the portable digitizer. A
special note of thanks to my good friends and colleagues, Dr. Greg Viggiano and Dr.
Michael Chamberlain, who both encouraged me to change my personal life and finish
my dissertation. I can not believe it took the whole five years to complete.
Lastly, I would also like to say a heartfelt thank you to Bruce Puffer, who
really tried to support me throughout the doctoral process. Bruce, I am truly sorry we
did not make it.
vi
TABLE OF CONTENTS
LIST OF TABLES XI
LIST OF FIGURES XII
ABSTRACT XIII
CHAPTER I 1
INTRODUCTION 1
Background 2
Significance of the Study 3
Justification on Practical Grounds 5
Problem Statement 8
Definitions 10
Scope and Limitations of the Study 13
Research Presentation Overview 15
CHAPTER II 16
LITERATURE REVIEW 16
The Innovation-Decision Process 16
Knowledge Stage 18
vii
Persuasion Stage 21
Decision Stage 22
The Technology Innovation Process 22
Technology Strategy Plan 24
Implementation 26
User Perceptions and Experiences 27
Relative Advantage 28
Compatibility 29
Complexity 30
Trialability 31
Observability 32
Champions 33
Confirmation, Discontinuance, Re-invention 34
Information Technology Issues in Small Firms 36
Summary 44
CHAPTER III 47
METHODOLOGY 47
Case Study 47
Research Design 49
Criteria for Quality of Research Design 51
Instrumentation 55
Research Questions 56
Sample 58
viii
Sample Criteria 60
Selection Criteria 62
Data Sources 65
Interviews 66
Document Analysis 68
Interim Case Summary Outlines 70
CHAPTER IV 82
Case Analysis Adoption/Trialability 82
CASE STUDY # 1- ADOPTION - Probe Exploration 83
CASE STUDY # 2- ADOPTION - Trinity Energy 85
CASE STUDY # 3 - ADOPTION - Petrel Robertson 88
CASE STUDY # 4 - ADOPTION - Canadian Petroleum Engineering 91
CASE STUDY # 5 - ADOPTION - Star Oil and Gas 93
Case Analysis Discontinuance/Rejection 95
CASE STUDY # 6 - REJECTION - Founders 96
CASE STUDY # 7 - DISCONTINUANCE - Capella Exploration 99
CASE STUDY # 8 - REJECTION - Jordan 101
CASE STUDY # 9 - REJECTION - Summit Resources 104
CASE STUDY # 10 -DISCONTINUANCE - Pan East Petroleum 106
CHAPTER V 110
CROSS-CASE ANALYSIS TRIALABILITY/ADOPTION 110
ix
Market Opportunities 111
Requirements and Problems 116
Knowledge Development 122
Technologies 126
Decision-Making 127
CROSS-CASE ANALYSIS DISCONTINUANCE/REJECTION 132
Market Opportunities 134
Requirements and Problems 137
Knowledge Development 140
Technologies 141
Decision-Making 142
Conclusions 143
AREAS FOR FUTURE RESEARCH 152
APPENDICES 155
APPENDIX A. THE PORTABLE DIGITIZER 156
APPENDIX B. RESPONDENT QUESTIONNAIRE 158
APPENDIX C. RESEARCH TIME FRAME 160
REFERENCES 161
BIOGRAPHICAL SKETCH 180
x
LIST OF TABLES
TABLE PAGE
Table 1 Small US Firms Information Systems Concerns Ranking 39
Table 2 US MIS Executive Information Systems Issue Ranking 40
Table 3 Case Study Tactics for Quality of Research Design 52
Table 4 Characteristics of Field Study Sample Cases 1-10 61
Table 5 Sampling Parameters 62
Table 6 Matrix of Categorized Respondents Interviewed 63
Table 7 Table of Categorized Corporate Documents 69
Table 8 Case Analysis Trialability/Adoption 83
Table 9 Case Analysis Discontinuance/Rejection 96
Table 10 Rental in the Technology Innovation Process 130
xi
LIST OF FIGURES
FIGURE PAGE
Figure 1 The Stages in the Innovation-Decision Process 18
Figure 2 The Technology Innovation Process 23 Figure 3
Factors in Implementation and Adoption 26 Figure 4
Organizational Chart - Probe Exploration 71 Figure 5
Organizational Chart - Trinity Energy 72 Figure 6
Organizational Chart -Petrel Robertson 73 Figure 7
Organizational Chart - Canadian Petroleum 74
Figure 8 Organizational Chart - Star Oil and Gas 75
Figure 9 Organizational Chart - Founders 76 Figure 10
Organizational Chart - Capella Exploration 77 Figure 11
Organizational Chart - Jordan 78 Figure 12
Organizational Chart - Summit Resources 79 Figure 13
Organizational Chart – Pan East Petroleum 80
xii
ABSTRACT
One of the critical determinants of success for many small-sized enterprises has
been the management of technological change. It is therefore increasingly relevant for
scholars to understand more fully how small sized enterprises try, adopt, discontinue or
reject new technologies.
This study examines the innovation decision process among small oil and gas
firms. It does so by explaining the technology adoption decision process so as to
identify the factors influencing the trialability, adoption, discontinuance or rejection of
new information technologies among small oil and gas firms.
Background conditions and forces that bear on the adoption or rejection of new
technology in small firms include market opportunities, requirements and problems,
the knowledge development or users' motivation and skill, the relative advantage of the
technology and the decision-making process. These factors are identified and
illustrated through ten highly focused case studies. The sample was purposive, rather
than random. Small oil and gas firms with less than 100 employees were selected on
the basis of having had recent contact with a vendor involved in demonstrating the
portable digitizer. Adopter category 'stages' were identified, stratifying small firms into
clusters representing the trialability and adoption, or discontinuance and rejection
stages of the innovation process as set out by Rogers (1995). The technology-
xiii
innovation process model was used as a template to examine the decision-making
process influencing adoption or rejection of the portable digitizer, which is a device
used to digitize geological and geophysical information.
Adopting firms went through a trialability stage before adopting and purchasing
the portable digitizer. Adopters experienced a 'performance gap' between actual and
desired results involving missed opportunities in the marketplac
e, and knew how to apply the innovation to the problems at hand. Adopting
firms were faced with new requirements, in the form of new projects, mainly in the
international marketplace, where geological data needed to be digitized. Adopting
firms also wanted to reduce expensive and time-consuming out-sourcing costs and
found the ‘portability' of the innovation to be a relative advantage.
Two of the rejecting firms went through a trialability stage before discontinuing
the use of the portable digitizer. Five of the ten firms studied ultimately rejected the
innovation. Rejecters did not need to digitize, as most pursued market opportunities in
the North American domestic market where geological and geophysical information
has already been digitized. Rejecting firms saw no need to adopt the innovation and
could not identify any 'performance gaps' between actual and desired results involving
competitors’ practices or unmet customer expectations. Users who discontinued or
rejected the innovation had far more vendor contact; however, all were unanimous in
their poor evaluation of the vendor's demonstration of the software component of the
innovation.
xiv
In summary, market opportunities seemed remarkably different for the two
populations. Adopters were more involved in the international arena, extending market
opportunities through exploration and development. Rejecters were more involved in
acquiring other firms in a 'financial play' to extend market opportunities. The two
populations also had different technology uses and needs. Adopters used the innovation
to digitize data for new international projects. Rejecters used more traditional tools to
produce and display their product.
In terms of knowledge development, adopting firms had strong internal
championing processes, both formal and informal. Rejecters had no championing.
Users in adopting firms had heard of, or used, or had knowledge of the prototype of
the portable digitizer. In contrast, rejecters had no knowledge of the innovation, had
never heard of the prototype and knew few colleagues using the innovation.
The difference between adopters and rejecters is that adopters appeared
sufficiently motivated to try a new technology with the hope of improving the quality
of their work. Rejecters appeared to be more accepting of technological limitations and
were more willing to tolerate traditional methods to process their work.
xv
CHAPTER I
INTRODUCTION
Research on the adoption of new technologies by small and medium-sized
enterprises (SMEs) in recent years has increased, including research on both 'hard'
technologies (e.g., robotics), and 'soft' technologies, for example, computer-aided
design (Raymond, Julien, Carriere and Lachance, 1996). However, we have less
knowledge on how technological change occurs in SMEs, and specifically on the
process by which these firms manage the adoption and implementation of new
information technologies (Raymond, et al., 1996). SMEs generally have fewer
resources and less expertise to devote to the management of technology.
Understanding why people accept or reject a new information technology is an
important issue because the adoption of information technology by knowledge workers
is an integral component of organizational computing. The adoption of information
technologies by individuals and organizations is part of the process of information
systems (IS) implementation, a research area that has received substantial attention
during the past 25 years (Kwon and Zmud, 1987). Understanding how to implement IT
successfully is still one of the most questioned issues facing the IS field (Swanson
1988; Brancheau and Wetherbe 1990). Research findings to date have been mixed and
inconclusive (Moore and Benbasat, 1991).
Judging by the wealth of problems reported in the literature, information
systems and general managers are not sure how to manage the introduction of new
information technology (Brancheau and Wetherbe, 1990). One step toward providing
sound management guidelines is to improve understanding of the social forces which
affect the introduction and diffusion process of new technologies within organizations
(Brancheau and Wetherbe, 1990). This study extends the present body of literature by
examining adoption within the context of the technology-innovation model through use
of a paradigm put forth by Hackett, Mirvis and Sales (1991).
For the purpose of this study, adopter category 'stages' were identified by
stratifying small firms into clusters representing the trialability, adoption, and
discontinuance and rejection stages of the innovation process as explicated by Rogers
(1995). The technology-innovation process model was used as a template to examine
the decision-making process influencing adoption or rejection of the portable digitizer,
a device used to digitize geological and geophysical information. The author followed
the technology-innovation process using a set of common constructs such as market
opportunities, requirements and problems, knowledge development, operator skill and
motivation, technology usage, and decision-making.
Background
In the study of Management Information Systems, the adoption of computing
innovations by organizations is associated with both environmental and organizational
factors. Though studies of computer use tend to focus on the individual as the unit of
analysis, individual responses are sometimes aggregated to obtain a measure of
utilization for an organization as a whole. In such instances, findings can be
summarized with regard to the level or extensiveness of use ( Kraemer and Dutton,
1991). It has been found that the level of use is related to the degree of training users
receive. The greater the training, the greater the ability to use the system and,
subsequently, the greater the use of the system (Nelson and Cheney, 1987).
Significance of the Study
The Canadian Federation of Independent Businesses estimates that between 84
percent and 87 percent of all Canadian businesses can be classified as small.
Information technology (IT) has transcended its traditional administrative support role
to play a more central part in business strategies (Keen, 1991). IT is now wielded as a
strategic weapon to gain sustainable advantages' and support the competitive strategy
of the firm (Pollard and Hayne, 1998). Information and its management for small
business has become a fundamental issue in their survival and development (Julien,
1996). Today's small businesses are investing more in IT (Cariere and Julien, 1992;
Julien 1995). They do so to increase their information-processing capacity in order to
remain competitive (Cafferata and Mensi, 1995; McMillan, 1987; Tornatzky and
Fleischer, 1990).
The general trend for adoption of new computing technology is away from
costly mainframe computing with in-house development. The availability of cheaper,
user-friendly, standard software packages means that sophisticated tools are becoming
increasingly available to small businesses without the need for significant investment
or advanced programming skills (Doukidis, Smithson and Lybereas, 1994). Given the
increasing complexity and uncertainty in their environment, small businesses are
currently investing more and more in information technology (IT), hoping to obtain
greater productivity and increased effectiveness (Raymond and Pare, 1992). Prior
studies have shown that information technologies are starting to have an impact on
firms' structural attributes (Raymond, 1990), on their strategic choices (Miller, 1987)
and on their performance (Bergeron and Buteau, 1988). Small enterprises, due to their
greater simplicity in structural, strategic and technological terms (Mintzberg, 1979;
Julien and Marchesnay, 1990; Raymond, 1990), constitute a propitious terrain for
study (Raymond and Pare, 1992). This study is unique because it examines: (1) a new
population that has not been extensively researched in the MIS field (eg., small
business); (2) and a new technology, (eg., the portable digitizer). It also provides a
comparative perspective on adopters and rejecters of new information technologies.
If research on the adoption of IT into smaller organizations has been
inconclusive to date, part of the problem is that many of the new technologies
themselves are not fully developed and more has been expected of them than can be
delivered (Bower, 1981). Second, most small organizations lack a coherent technology
strategy, and thus have introduced computers piecemeal without capitalizing on the full
potential of systems integration or without making needed changes in the
organization’s structure and work arrangements (Nolan, 1995). Finally, other
pressures, ranging from increased competition and cost-cutting requirements to
problems stemming from changes in ownership and the difficulties of managing in an
era of downsizing, have had a significant impact on companies’ strategies and direction
(Hackett, Mirvis and Sales, 1991). In many cases, changes wrought by these pressures
have co-mingled with those created by the introduction of information technology,
making it difficult to deduce what exactly is leading to changes in the ways companies
adopt and implement information systems (IS).
Justification on Practical Grounds
Many changes in the organization of work in North America have been
attributed to the increased capabilities and use of information technology in business.
However, few studies have attempted to examine these relationships empirically
(Brynjolfsson, Malone, Gurbaxani, Kabil, 1991). Given North America’s economic co-
dependence on oil and gas and small business, along with the current push toward an
information-based marketplace, it seems only natural that the marriage of information
technology and small business will become crucial during the rest of this decade and
well into the next. A change in management practices and other choices will have to be
made by small businesses in order to take advantage of the competitive opportunities
provided through the use of digitized information. Companies that can foster the
adoption of selected new technologies may be at an advantage in the years ahead
(Brancheau and Wetherbe, 1990).
Researchers in communication and in the management information sciences
have previously shown a relative lack of interest in small organizations. For the past
two decades, MIS research has concentrated on large “Fortune 500” companies with
sophisticated information systems operating from a centralized IS department and
customarily overseen by a Chief Information Officer. However, research findings
obtained in a big business environment can not necessarily be generalized to small
business, as the organizational context of a small firm has been shown to be
fundamentally different from that of a large firm (Raymond, 1985). In the words of
Welsh and White (1981), “A small business is not a little big business”.
Small business has not attracted much attention from MIS scholars. Perhaps
this is due to the perceived simplicity of small firms compared to larger organizations.
Small firms lack the large in-house information systems of larger corporations, as well
as the resources to invest in information technology and training. Small businesses also
lack specialized knowledge and technical expertise (Charlesworth, 1972; Klatt, 1973;
Deeks, 1976; Schollhammer and Kuriloff, 1979). This shortcoming is not only
associated with levels of computer usage, but also extends to the use of information
systems generally. In addition, research on small businesses as a population is made
even more difficult by the lack of “commonalties” and the many “idiosyncrasies” of
such entities.
Simplistic notions of small business and its use of information technology are
changing. The "microelectronics revolution", which has led to the development of mini
and microcomputers, now allows the tiniest firms to implement a computer-based
information system (Raymond, 1985). This is confirmed by the increasing adoption of
computers among small business firms. Therefore it is crucial for small businesses to
follow the lead of larger organizations by adopting information technology into their
organizational structures. This process can be understood by examining the social
factors that motivate business managers in the adoption of new information
technology. Continued growth in end-user computing will be fueled by the accelerating
development of new information technology.
It appears that small business is the engine that is driving the North American
economies (Coleman, et al 1966). Successful small oil and gas companies react quickly
to volatile and ever-changing markets. For the past decade, most of North America’s
oil supply has come from the OPEC nations. That is about to change, as the technology
of oil field-service companies is required to open up new supplies of crude. In order to
be key players in a technology-intensive economy, small oil and gas businesses will
have to adopt new management attitudes toward innovation and the application of new
information technologies. According to U.S. energy market analyst, Barry Donovan
(1997), the Canadian oil field-service sector has acquired a significant technical
advantage over many American companies. With the slowdown of drilling in the
United States, the oil-service sector has been in a depression, which has cut the number
of oil producing rigs and quashed advances in technological innovation (Boras, 1996).
In contrast, during the last three years, Canada has seen a steady volume of drilling,
more than twenty two thousand wells in 1997. This high volume of work has helped
Canadian firms develop technology ahead of the rest of the globe (Boras, 1996). This
study attempts to identify and predict the barriers to adoption of a new technology by
small oil and gas firms in Calgary, Alberta, a major center of exploration activity.
This study is also significant due to the fact that the portable digitizer is a
powerful tool in the oil and gas sector. A small Calgary firm named Digi-Rule
invented the portable digitizer in 1990. The innovation was designed to take full
advantage of 'GEOCAD', an accompanying mapping, charting and digitizing software
package. The combined hardware and software package offers unique versatility and
portability to the oil and gas sector. As new information products and services are sold
on an electronic basis, small businesses will have to become more attuned to the global
economic geography of digitized information. As demonstrated by Canada’s use of oil
and gas technology, laggards in adopting some of the newer technologies will be the
consumers of other countries’ products, and they will lose out on job and wealth-
creation potential.
Problem Statement
The general purpose of this study is to identify the factors influencing the
trialability, adoption, discontinuance or rejection of the portable digitizer and its
accompanying software package, 'GEOCAD'. Factors such as market opportunities,
requirements and problems, knowledge development, users' motivation and skill, the
relative advantage of the technology and the decision-making process are examined in
ten small-sized oil and gas firms. Given this rationale, the central research question is:
What factors explain the adoption, discontinuance, and rejection of the
portable digitizer over time among small Canadian oil and gas firms?
What are the individual background perceptions influencing end-users' decision
to adopt or reject a new technology? What are the background organizational
conditions and forces influencing the adoption or rejection of new technology in small
firms? Rogers (1995, 1983, 1971, 1962) frames such questions in terms of an
innovation-decision process, which consists of a series of actions and choices over time
through which an individual or an organization evaluates a new idea and decides
whether or not to incorporate the new idea into an ongoing practice. The problem
statement is further explained by examining end-users' knowledge, motivation and skill
as part of a 'readiness' to adopt a new technology, and willingness to establish new
methods. Rogers (1971) originally identified five characteristics of an innovation
which affect its rate of diffusion: relative advantage, compatibility, complexity,
observability and trialability. Moore and Benbasat (1991) refined Rogers’ constructs
and developed an instrument to measure the perceptions of adopting an information
technology innovation. They also added two new 'perceived characteristics': image and
voluntariness. This researcher proposes to examine this set of characteristics in the
context of the adoption of the portable digitizer by end-users working in small oil and
gas firms. This study also builds on research conducted by Hackett, Mirvis and Sales
(1991), in which the forces of market opportunities, requirements, knowledge
development and the technology innovation process influence the ways in which
companies choose and implement information technology.
Definitions
1. Adoption can be described as the singular “act” of embracing
something not previously known (Rogers, 1995).
2. Innovation is defined as an idea, practice or object that is perceived as
new by an individual or other unit of adoption (Rogers, 1995).
3. Innovation-decision process is the process through which an
individual passes from first knowledge of an innovation to forming an attitude toward
the innovation, to a decision to adopt or reject its use, to implementation of the
innovation, to confirmation of this decision (Rogers, 1995).
4. Technology-innovation process involves the search for a better way to
access, analyze or communicate information; leading to the choice of a technology that
promises to improve things; followed by the implementation of the innovation by end
users in the workplace and the final diffusion of the innovation throughout the
organization, (Hackett, Mirvis and Sales, 1991).
5. Small business is here defined as an independently owned and
operated enterprise; one not dominant in its field and having less than 100 employees
(Statistics Canada, 1996).
6. End-user computing (EUC) is here defined as the development,
operation and/or control of information systems by the ultimate consumers of the
outputs of such systems and not by specialists (Cotterman and Kumar, 1989).
7. Technology is a definition that has two components: 1) a “hardware”
aspect that consists of the tool that embodies the technology as material or physical
objects, and 2) a “software” aspect that consists of the information-base of the tool
(Rogers, 1995). In this study, the hardware is the portable digitizer and the software is
'GEOCAD'. (Users refer to the portable digitizer in the vernacular as 'The Rat' since
the technology is somewhat similar to 'The Mouse', which is familiar to most users).
8. Information Technology (IT) is defined in a broad sense and refers to any
artifact whose underlying technological base comprises computer or communications
hardware and software (Cooper and Zmud, 1990).
10. Case study an empirical inquiry that uses multiple sources of evidence to
investigate a contemporary phenomenon within its real-life context (Yin 1991; 1984).
11. The portable digitizer is an information technology developed in 1988 by
DigiRule, a Canadian-based company located in Calgary, Alberta. The innovation was
designed by geophysicists to compute and display potential well sites and to prepare
for oil well drilling. It was developed by DigiRule specifically for seismic lines and
consists of hardware and software components. (See Appendix A for more details).
The hardware component, nicknamed 'The Rat', is a spin-off of 'The Mouse',
the hand-held hardware tool used by end-users. The Rat hardware specifications
consist of the body weighing 1.1. kg. (2.5 lb.), width and length 33 x 7.6 cm. (7.25 x
4.75 in.) with a cursor length or ruler of 33 x 7.6 cm. (13 x 3 in.).
The software component, or Rat-ware, is 'GEOCAD', which includes full CAD
capability, allowing for the instant addition of objects and text. The software generates
several end products including synthetics, contour maps, and volumetric reports,
posted maps or profiles of seismic data. (Traditionally, the method for interpreting
geological data used to be hand-drawn or computer-assisted designs taped together to
permit the examination of multiple lay-downs of information). These are used by oil
and gas companies to accurately determine well site and drilling. The portable digitizer
can process multiple documents and integrate data from various sources in different
formats. The digitizer is totally portable and more convenient than traditional methods
of taping multiple lay-downs. It is promoted to be cost effective, to save time, and to
increase productivity. DigiRule claims that its product allows seismic interpreters to
produce professional, accurate synthetics seismograms quickly and easily.
Approximately 350 systems have been sold worldwide since 1997. At the time of this
study, more than 170 systems had been sold to various oil and gas companies in the
city of Calgary.
Glossary
bbl barrel
mbbl thousand barrels
mcf thousand cubic feet
mcf/d thousand cubic feet per day
mmcf million cubic feet
BOE barrel of oil equivalent(10mcf = 1 bbl)
BOE/d barrels of oil equivalent per day
mBOE thousand barrels of oil equivalent
Scope and Limitations of the Study
In adopting the portable digitizer, individuals and organizations are actually
adopting a 'cluster of technologies'. A technology cluster consists of one or more
distinguishable elements of technology that are perceived as being closely interrelated,
whereby the boundaries are not very clear cut or distinct (Rogers, 1995). The hardware
of the portable digitizer consists of a personal computer and the actual digitizer. The
software includes the interface and the remote database 'GEOCAD' provided by the
vendor, DigiRule. Therefore this study does not examine the adoption of one
innovation per se, but several technologies embodying several different elements.
The fact that small business as a population is studied here makes comparisons
difficult because of the ‘diversity’, lack of ‘commonalties’ and the ‘idiosyncratic
variables’ inherent within a mix of small businesses. Also, small firms have little time
or resources and their business environments make it difficult to study adoption.
The scope of this study may not be generalizable to other populations because
of the specific attributes of the population under study. Due to the oil and gas industry,
the city of Calgary has a higher percentage of professionally trained, educated and
computer literate individuals in the workforce than many other North American cities
(Calgary Bureau of Business, 1996). The population under study has been
acknowledged by the Calgary Bureau of Business (1996) as having a greater
predisposition toward computers as well as other new technologies. Also, Calgary is
somewhat isolated and may rely on technology as a more efficient and direct mode for
information procurement in order to overcome the barriers of time and distance.
Secondly, the adoption of the portable digitizer by small oil and gas firms is not
generalizable to other types of small businesses; it is a specific innovation targeted for
a specific business sector. Substitute technologies may also be available which can
affect the relative advantage provided by the portable digitizer.
As with all qualitative research, the author tried to balance the
advantages/disadvantages of the case study methodology. The author implemented a
qualitative research design in a systematic way that would increase reliability and
validity. Decisions concerning the conceptual framework, research questions,
hypothesis, sampling and instrumentation were all made prior to the data collection.
However, during the interview situation the author took the liberty of allowing
candidates to speak freely in an unstructured, open-ended manner so as to illuminate
the complex phenomena of adoption. The author's rationale for conducting open-ended
interviews was to encourage the rich descriptions and explanations of processes that
case studies render so well.
Research Presentation Overview
The presentation of the research follows the sequence in which it was
conducted. Chapter One highlights the purpose and significance of the study, its
importance to the field, and what the study was expected to accomplish. Chapter Two
establishes the theoretical framework and reviews the literature of information
technology and current IT issues facing small firms. Chapter Three describes the
research design and data sources used for the ten case studies. Chapter Four begins the
systematic individual analysis of the ten case studies involving the trialability,
adoption, discontinuance or rejection of the innovation. Chapter Five is a compilation
of cross-case analyses, examining the factors of market opportunities, requirements
and problems, knowledge development, users' motivation and skill, the relative
advantage of the technology and the decision-making process involved in the adoption
or rejection of the portable digitizer. Chapter Five also provides a reflective, integrated
explanation of the study's findings and areas for future research.
CHAPTER II
LITERATURE REVIEW
This chapter explicates the concepts and key terms continued within the
research questions as they have developed in the relevant literature. It also reviews the
two theoretical models used as a foundation to explain the observable phenomena of
the adoption, and the discontinuance or rejection of new technology among small oil
and gas firms: Rogers' Innovation Decision Process (1995, 1983, 1971, 1962) and
Hacket, Mirvis and Sales' Technology Innovation Process (1991).
The Innovation-Decision Process
The innovation-decision process is fundamentally grounded in Rogers’ (1995,
1983, 1971, 1962), communication-based theory of 'The Diffusion of Innovations'.
Not only does Rogers provide a reasonably comprehensive view of innovation
diffusion, but the model’s focus on the adoption process makes it the most
parsimonious theoretical framework currently available (Brown, 1981). Rogers’ (1995)
paradigm of the innovation-decision process is described as the process through which
an individual (or other decision-making unit), passes from 1) first knowledge of an
innovation; 2) to the formation of an attitude toward the innovation; 3) to a decision to
adopt or reject; 4) to implementation of the new idea; 5) to confirmation of this
decision. The conceptualization of Rogers' innovation-decision process is further
described as:
1. Knowledge, which occurs when an individual (or other decision-
making unit) is exposed to the innovation’s existence and gains some understanding of
how it functions.
2. Persuasion, which occurs when an individual (or other decision-making
unit) forms a favorable or unfavorable attitude toward the innovation.
3. Decision, which occurs when an individual (or other decision-making
unit) engages in activities that lead to a choice to adopt or reject the innovation.
4. Implementation, which occurs when an individual (or other decision-
making unit) puts an innovation to use.
5. Confirmation, which occurs when an individual (or other decision-
making unit), seeks reinforcement of an innovation-decision already made, but he or
she may reverse this previous decision if exposed to conflicting messages about the
innovation (Figure 1).
Figure 1: The Stages in the Innovation-Decision Process
(Rogers 1995; p. 163)
Knowledge Stage
The innovation-decision process begins with the knowledge stage. Some
researchers have claimed that the individual plays a passive role in being exposed to
awareness-knowledge about an innovation. The question still remains “Which comes
first: the need for or awareness of an innovation?” One may become aware of an
innovation quite by accident, as one can not actively seek an innovation until one
knows it exists (Rogers, 1995). Other scholars of adoption posit that an individual
gains awareness-knowledge only through behavior that must be initiated, and that
COMMUNICATION CHANNELS
PRIOR CONDITIONS
1. Previous practice
2. Felt needs / problems
3. Innovativeness
4. Norms of the social systems
1. Socio-economic characteristics
2. Personality variables
3. Communication behavior
Characteristics of the Decision-Making Unit
1. Relative advantage
2. Compatibility
3. Complexity
4. Trialability
5. Observability
Perceived Characteristicsof the Innovation
I. KNOWLEDGE II. PERSUASION III. DESICSION IV. IMPLEMENTATION V. CONFIRMATION
1. Adoption
2. Rejection
Continued AdoptionLater Adoption
DiscontinuanceContinued Rejection
awareness is not just a passive activity. In other words, individuals generally tend to be
more receptive to ideas that are similar to their existing interests, needs or attitudes.
According to Rogers (1995), innovations can generate needs as well as vice versa. In
any event, Rogers (1995) does not provide a clear answer to this question of whether
awareness of a need or awareness of an innovation (that creates need) comes first.
Coleman, Katz and Menzel (1966) concluded that initial knowledge mainly occurs
through communication channels and messages such as salespersons and advertising.
According to Coleman, Katz and Menzel (1966), it was only in the later stages in the
innovation-decision process that the respondents became active information seekers,
usually by consulting friends or colleagues. The innovation-decision process was later
revised by Hackett, Mirvis and Sales (1991) who, through the technology-innovation
process, proposed that the knowledge stage or need is actually a perception of a
performance gap which leads to the search for a new technology.
The innovation-decision process is basically an information seeking and
processing activity in which the individual is motivated to reduce uncertainty about the
advantages and disadvantages of an innovation (Rogers,1995). There are three types of
knowledge about an innovation. The first is software information, which according to
Rogers (1995) is embodied in the innovation and serves to reduce uncertainty about the
cause-effect relationships involved in achieving the desired outcome (such as meeting
a need or problem of the individual). According to Rogers (1995), this type of
information seeking is concentrated at the knowledge stage of the innovation-decision
process, but it may occur at the persuasion and decision stages as well.
The second type of knowledge is how-to knowledge, which consists of
information necessary to use an innovation properly. According to Rogers (1995), few
researchers have investigated how-to knowledge. The end-users of complex
technological products also face what Rosenberg (1976) calls learning by using, which
according to Attewell (1992) is where the end-user spends several years developing an
understanding of the strengths and weaknesses of the technology and is the result of
knowledge transfer from the originator to the user of technology.
The third type of knowledge is principle knowledge, which according to Rogers
(1995) consists of information dealing with the functioning rules underlying how an
innovation works. It is, according to Rogers (1995), possible to adopt an innovation
without principle knowledge but the danger of misusing the new idea is also greater,
and discontinuance may result in such instances. The implication is that know-how, far
from being readily or easily transferred from the originator to the user of the
technology, faces barriers and is relatively immobile (Boyle; 1986, Eveland and
Tornatzky, 1990). Knowledge often has to be discovered de novo within the user
organization (Attewell, 1992).
Change agents and their role in the innovation-decision process are important
factors in determining how knowledge contributes to the adoption of a new
technology. Knowledge of an innovation is also quite different from using it. Most
individuals are familiar with many innovations they have not adopted. The role of
consultants or change agents is crucial when examining the adoption of information
technology in small firms because they usually do not have specialized MIS
departments. Most small firms can not afford to build in-house programming. Instead
such small firms hire consultants from outside to advise them concerning purchases of
equipment and to plan whole systems, to program and install the software, and to
integrate computers into networks (Attewell, 1992). This temporary infusion of
expertise has proved to be far from a transitional phenomenon; it has spawned an
enormous industry totaling billions of dollars in professional consulting and training
services.
Persuasion Stage
According to Rogers (1995), at the persuasion stage in the innovation-decision
process the individual forms a favorable or unfavorable attitude toward an innovation.
Perceived attributes of innovations such as their relative advantage, compatibility and
complexity are especially important at this stage of the innovation-decision process. At
the persuasion stage, and especially at the decision stage, an individual is typically
motivated to seek innovation-evaluation information, which reduces uncertainty about
an innovation’s expected consequences. The information is usually sought by most
individuals from their near-peers whose subjective and personal experience with
adoption is most convincing (Rogers, 1995).
Decision Stage
The decision stage, according to Rogers (1995), occurs when an individual or
other decision-making unit engages in activities that lead to a choice to adopt or reject
the innovation. Adoption is a decision to make full use of an innovation as the best
course of action available. Rejection is a decision not to adopt. According to Rogers
(1995), a small-scale trial is often part of the decision to reduce uncertainty regarding
the innovation. Methods of facilitating the trial of innovations, such as the distribution
to clients of free samples of a new product, will usually speed up the rate of adoption.
It is important to remember that the innovation-decision process can just as logically
lead to a rejection.
The Technology Innovation Process
There are specific factors having to do with the way companies choose and
implement a new information technology, and how their employees adopt and make
use of it. According to Hackett, Mirvis and Sales (1991), the introduction of a new
technology into an organization can be framed as a technology innovation process. As
such, it involves the 'search' for a better way to access and analyze information, to
communicate and distribute information, leading to the 'choice' of a technology that
has promise of improving things. This is followed by 'implementation' of the
technology in the workplace, by its 'adoption' by users, and, if everything works out,
by the attainment of desired 'goals'. Figure 2 shows the inter-relation of strategy, and
the business and technical environment of a firm in the process of innovation.
Thus, with respect to research conducted by Hackett, Mirvis and Sales (1991),
the following research question is proposed.
What factors explain the adoption, discontinuance and rejection of the
portable digitizer over time among small Canadian oil and gas firms?
Figure 2: The Technology Innovation Process
Hackett, Mirvis and Sales (1991, p. 116.)
STRATEGY
CHOICE
IMPLEMENTATION
ADOPTION
GOAL ATTAINMENT
DIFFUSION
SEARCH
MARKET OPPORTUNITES,REQUIREMENTS & PROBLEMS
DEVELOPING KNOWLEDGEAND TECHNOLOGIES
EconomiesFlexibilityOperational ControlStatistical ControlOperator MotivationOperator Skill Use
InnovationProductivityHigher QualityCost Reduction
Technology Strategy Plan
According to Hackett, Mirvis and Sales (1991), market opportunities,
requirements and problems, knowledge development, and technology take place in the
context of an organization’s strategy. Research suggests that innovation in an
organization is typically stimulated by a performance gap between actual and desired
results (March and Simon, 1958; Rogers, 1962). A gap may be discovered in
comparison to competitors’ practices, missed opportunities in the marketplace, or
unmet customer expectations. Or it may stem from managers' complaints about
business results, workers’ complaints over the quality of their equipment, or a
professional lobbying for technology that is more state-of-the-art.
Thus, with respect to the model conceptualized by Hackett, Mirvis and Sales
(1991) the following hypothesis is put forward concerning the adoption of the portable
digitizer.
H1: A “performance gap” between actual and desired results involving
competitors’ practices, missed opportunities in the marketplace, or unmet customer
expectations will most likely motivate companies to adopt the portable digitizer.
It is the 'perception' of a performance gap, in relation to the business and
technological environment of an organization, and the outlooks of managers and
professionals charged with technology decisions, that leads firms to devise a strategy to
reduce perceived performance gaps (Hackett, Mirvis and Sales, 1991). Once
performance gaps are perceived, understood, and accepted by decision makers,
managers typically study which technologies are available, and develop a 'theory' of
how particular ones will affect the organization and its bottom line results (Gerstein,
1987). Gains in economy, flexibility, motivation, and control, premised on the use of
the new technology, are in turn expected to result in more sales, increases in
productivity or quality, or in cost reductions (Hackett, Mirvis and Sales, 1991).
Thus, with respect to the model conceptualized by Hackett, Mirvis and Sales
(1991) the following hypothesis is put forward concerning the adoption of the portable
digitizer.
H2: Companies that know how to apply the portable digitizer to the problems
at hand will be more likely to adopt the new technology.
In agreement with Hackett, Mirvis and Sales (1991), the type of technology
chosen by a company, whether it is from an outside vendor or developed in-house,
along with its associated capabilities and how it is serviced, all influence its adoption
and impact. It is, however, equally important to consider why a company seeks out a
new technology, whether it has the know-how to apply it to the problems at hand, and
how well managers understand the Figure organizational implications of technological
change. Figure 3 details key variables in the implementation of new technology, its
trial adoption by users, and some changes that result in performance.
Figure 3: New Technology: Factors in Implementation and Adoption
Hackett, Mirvis and Sales: New Technology in Organizations (1991, p.119)
Implementation
In conceptualizing the New Technology Model as formed by Mirvis, Sales and
Hackett (1991), there is the matter of 'perception' of the performance gap in a
company and the associated 'felt need for change’ by company decision makers,
managers and employees. According to Hackett, Mirvis and Sales (1991), this brings
up a second factor relevant to implementation and adoption: people’s knowledge of the
technology and awareness of its implications for affected work units and the
organization as a whole. Users should be consulted about or participate in the selection
•Performance Gap
•Need for Change
•Knowledge - Awareness
•Attitude - Benefits
•Training - Support
IMPLEMENTATION
TRIAL ADOPTION
ORGANIZATIONAL EFFECTIVENESSAND QUALITY OF WORK LIFE
•Discretion and Control
•Knowledge Use
•Learning
•Advancement
•Job Characteristics
•Accountability
•Social Relations
•Safety, Security, Pay Increases
CHANGE IN KNOWLEDGEAND SKILL USE ON JOB
CHANGE IN WORK AND SOCIALPATTERNS AND PERFORMANCE
of new technology along with its development and application. Eventual users form
attitudes early on about the likely consequences of the technology for themselves, their
co-workers, departments, and the company overall (Hackett et al, 1991). Finally, the
way that companies go about introducing new technology draws attention to training
methods, user manuals and support services. At issue is whether or not companies take
a sensible approach to managing what often proves to be a major change. Thus, with
respect to the model conceptualized by Hackett, Mirvis and Sales (1991) the following
hypotheses are put forward concerning the adoption of the portable digitizer.
H3: End users must be educable in the new processes involved in using the
portable digitizer and see some benefit accruing to them if they and their companies
are to gain full advantage of the new technology.
User Perceptions and Experiences
According to Hackett, Mirvis and Sales (1991) users’ ‘readiness' to adopt a new
technology and to change their work methods are other key variables in the adoption of
a new technology. Users also have to be educable in new processes and see some
benefit to them if they and their companies are to gain full advantage of the new
technology. Also, some technologies, under the appropriate conditions, make users’
work more enjoyable and interesting while adding to the users’ efficiency.
Five attributes of innovations that have shown to consistently influence
adoption include: 1) relative advantage 2) compatibility 3) complexity 4) observability
and 5) trialability. The constructs of interest in this research follow the same five
attributes identified by Rogers (1983), and extended by Moore and Benbasat (1991).
Rogers (1983) was the first to identify the five general attributes of innovations that
consistently influence adoption. They are defined as follows:
1. Relative Advantage: the degree to which an innovation is perceived as
being better than its precursor;
2. Compatibility: the degree to which an innovation is perceived as being
consistent with the existing values, needs, and past experiences of potential
adopters;
3. Complexity: the degree to which an innovation is perceived as being
difficult to use;
4. Observability: the degree to which the results of an innovation are
observable to others;
5. Trialability: the degree to which an innovation may be experimented with
before adoption.
Relative Advantage
Relative advantage is the degree to which an innovation is perceived as being
better than its precursor (Rogers, 1995). In other words, the greater an innovation’s
advantage relative to available alternatives, the more likely it is that the innovation will
be adopted (Robey and Zmud, 1992). Moore and Benbasat (1991) redefine true
advantage as “ the degree to which using the innovation is 'perceived' as being better
than using its precursor”. The nature of the innovation largely determines what specific
type of relative advantage (such as economic, social and the like) is important to
adopters, although the characteristics of the potential adopters also affect which aspects
of relative advantage are more important (Rogers, 1983). Thus, with respect to relative
advantage, the following hypotheses are offered concerning the adoption of the
portable digitizer:
H4: The more amenable to demonstration the portable digitizer is, and the
more visible its perceived advantages are, the more likely it is to be adopted.
Some researchers, including Rogers, consider ‘image' as an aspect of Relative
Advantage. Image is defined as “the degree to which use of an innovation is perceived
to enhance one’s image or status in one’s social system" (Moore & Benbasat, 1991).
Rogers (1995, p. 213) states: “One motivation for many individuals to adopt an
innovation is the desire to gain social status”. For these reasons a scale measuring the
image-enhancing effects is used in this study. Thus, with respect to image, the
following hypothesis is put forward concerning the adoption of the portable digitizer:
H5: The perception that a company's usage of the portable digitizer enhances
an individual’s image is positively related to its adoption.
Compatibility
Compatibility is the degree to which an innovation is perceived as being
consistent with the existing values, past experiences, and needs of potential adopters.
According to Rogers (1995), an idea that is more compatible is less uncertain to the
potential adopter, and fits more closely with the individual's life situation. Such
compatibility helps the individual give meaning to the new idea so that it is regarded as
familiar. An innovation can be compatible or incompatible: 1) with sociocultural
values and beliefs; 2) with previously introduced ideas; and/or 3) with client needs
(Rogers, 1995).
Therefore, the greater the compatibility of an innovation with the adopters’
values, past experiences and needs, the more likely the innovation will be adopted
(Robey and Zmud, 1992). Thus, with respect to compatibility, the following
proposition is offered concerning the adoption of the portable digitizer:
H6: Users who have tried the prototype (the Ruler) of the portable digitizer will
be more likely to find it compatible with their past experiences and needs, thereby
enhancing the likelihood of its trialability and adoption.
Complexity
Complexity is the degree to which an innovation is perceived as being difficult
to understand and/or use (Rogers, 1995). Any new idea may be classified on a
complexity-simplicity continuum. Some innovations are clear in their meaning to
potential adopters whereas others are not (Rogers, 1995). The complexity construct as
set by Rogers (1995) was referred to as ease of use by Davis, Bagozzi and Warshaw
(1989). While ease of use is important, the usefulness of the system is even more
important and should not be overlooked.
End-users may be unwilling to tolerate a difficult interface in order to access
functionality that is very important, but no amount of ease of use will be able to
compensate for a system that does not perform a useful function (Davis, Bagozzi, and
Warshaw, 1989). Therefore, the less complex an innovation is relative to available
alternatives, the more likely it will be adopted (Robey and Zmud, 1992). Thus, with
respect to complexity, the following hypothesis is put forward concerning the adoption
of the portable digitizer:
H7: The more complex the portable digitizer is perceived to be by the end user
relative to available alternatives, the more likely it will be rejected or discontinued.
Trialability
Trialability is the degree to which an innovation may be experimented with on
a limited basis (Rogers, 1995). New ideas that can be tried on the installment plan are
generally adopted more rapidly than innovation that are not divisible (Rogers, 1995).
Some innovations are more difficult to divide for trial than are others. An innovation
that is trialable represents less uncertainty to the individual who is considering it for
adoption, as it is possible to learn by doing. According to Rogers (1995), the personal
trying-out of an innovation is a way to give meaning to an innovation, to find out how
it works under one's own conditions. Thus, with respect to trialability, the following
hypothesis is put forward concerning the adoption of the portable digitizer:
H8: The longer a new technology is rented, the greater the likelihood users will
become more knowledgeable about the innovation's relative advantages, and the more
likely they will be to adopt.
Observability
Observability is the degree to which the results of an innovation are visible to
others (Rogers, 1995). According to Rogers (1995), the results of some ideas are easily
observed and communicated to others, whereas some innovations are difficult to
observe and to describe to others. Most of the innovations studied in past research have
been technological in nature (Rogers, 1995). In fact, research has shown that 'mere
exposure' (to objects) can make an individual’s attitude toward these objects more
positive (Zajonc and Markus, 1982). One dimension of the observability construct
concentrates on the 'tangibility' of the results of using the innovation, including their
‘observability' and 'communicability'. This ties back to the term used by Zaltman,
Duncan and Holbek (1973), who indicated that the more 'amenable to demonstration'
the innovation is, and the more visible its advantages are, the more likely it is to be
adopted. Therefore the 'observability' construct reflects the ability to measure and
communicate the results of using an innovation. This construct has been labeled as
‘result demonstrability’ (Moore and Benbasat, 1991).
Champions
Innovation is the initiation, adoption, and implementation of new ideas in an
organization. However, for innovation to occur, someone must take the creative idea,
guide it through the trying period when resistance is at a peak, and persevere until it
becomes an innovation. Champions are the individuals who make a decisive
contribution to the innovation process by: 1) actively and enthusiastically promoting
the innovation; 2) building support; 3) overcoming resistance; and 4) ensuring that the
innovation is implemented. Howell and Higgins (1990) examined the champions of
change and how they can be identified, understood and supported. According to their
study, champions are celebrated as heroes of successful innovation, yet very little is
known about how they operate in organizations. In their study, Howell and Higgins
interviewed more than 150 key individuals associated with 28 successful information-
technology innovations in 25 large Canadian organizations. From the sample, a sub-
sample of 25 individuals was identified as champions for an in-depth study. The
authors described the essential characteristics and individual qualities of champions,
which include: 1) personality characteristics; 2) leadership behavior; and 3) career
experience.
Howell and Higgins (1990) concluded that each champion possesses unique
individual qualities, uses different processes to introduce innovations in organizations,
and operates best when management support is present. They also concluded that
champions use three very different processes to introduce and sell information-
technology innovations: (1) the rational process whereby champions gain corporate
approval by presenting a carefully documented business plan that justifies the purchase
of a technology based on financial criteria; (2) the participatory process, whereby the
champion builds supportive coalitions at multiple levels of the organization to ensure
the decision to adopt a new technology receives wide-spread acceptability; and (3) the
renegade process, which champions use in an organization whose culture produces
tremendous resistance to change. Howell and Higgins (1990) studied champions and
the various processes and strategies they employed to introduce and implement
information-technology innovations in organizations. Their analysis revealed a
complex interaction between the individual qualities of champions, their relationships
with key decision-makers and information sources, and the development of coalitions
over time. The authors contend that although champions pursue different influence
processes, they share common personality characteristics, leadership behaviors, and
career profiles.
Confirmation, Discontinuance, Re-invention
According to Rogers (1995), during the confirmation stage an individual or
other decision-making unit seeks reinforcement for the innovation decision already
made. The confirmation stage continues for an indefinite period of time after the
decision to adopt or reject. It may continue for a lengthy period of time, depending on
the nature of the innovation. Eventually, however, a point is reached at which the new
idea becomes an institutionalized and regularized part of the adopter’s ongoing
operations (Rogers, 1995).
Discontinuance is a decision to reject an innovation after having previously
adopted it. The organizational search for, and choice of, technology is not always
ordered, analytical and rational. In practice it can be fraught with problems whereby
companies are heavily influenced by vendors, fail to estimate price and performance
factors accurately, and end up disappointed with the wrong technology (Hackett,
Mirvis and Sales, 1991). Such problems feed into the adoption, technology-innovation
process and implementation stages. Discontinuance is a decision to reject an idea as a
result of dissatisfaction with its performance. According to Rogers (1995), the
dissatisfaction may come about because the innovation is inappropriate for the
individual and does not result in a perceived relative advantage over alternative
practice. However, for some individuals, a fifth stage of confirmation may occur which
Rogers (1995) refers to as re-invention. Re-invention is defined as the degree to which
an innovation is changed or modified by a user in the process of its adoption and
implementation. According to Rogers (1995), most re-invention occurs at the
implementation stage of the innovation-decision process.
An additional consideration for this study includes a closer examination of
the change of information system issues in small firms. Information technology is now
wielded as a strategic weapon to gain sustainable advantages and support the
competitive strategy of the firm (Poutsma, and Walravens, 1989). There is no real
reason to believe that this concept applies any less to small enterprises than to the
largest multinational (Poutsma and Walravens, 1989). This literature review outlines
the factors influencing the adoption and rejection of new technology. It does so by
examining the information systems issues that are currently facing small business
management.
Information Technology Issues in Small Firms
Historically, managers in small firms have had reservations regarding
information systems usage (Malone, 1985) because of a lack of resources and
formalized systems needed for MIS implementation, and the short time frame
characteristic of the small business environment. Small business managers rated
accounting and inventory control functions as the most important computer
applications. They reported that inventory control was the most problematic area of
computer usage. Despite these misplaced reservations, Malone (1985) found that the
use of IS improved the quality of decision-making, and their firms' effectiveness in
competing with larger firms.
Farhoomand and Hrycyk (1985) and Nickell (1986) corroborated the findings
of Malone (1985) by further indicating that small firms tend to use computers to
support accounting, budgeting, inventory control, word processing and spreadsheet
analysis. In more recent studies on the use of IT, researchers (Heikkila, Saarinen and
Saaksjarvi, 1991; Clark, 1987; Montazemi, 1988; Comford and Whitley, 1991:
Poutsma and Walravens, 1989) proposed major differences between small and large
firms. Their findings showed: 1) small firms tend to use computers more as tools and
less as a communications medium; 2) the low number of stakeholders involved in
small firms mean that there are likely to be fewer problems in terms of organizational
politics; 3) small firms have fewer resources available to implement IT solutions; 4)
small firms are able to complete the transition process much faster than large firms and
they possess greater flexibility to realize the full benefits of any new IT; 5) flexibility
of new IT facilitates small batch or niche- focused production (the preserve of the
small firm); 6) IT allows small firms to increase their market scope, and to secure their
position, through improved communication with other firms, both large and small; 7)
technology can lead to greater internal control of operations in small firms; 8) small
firms can implement new organizational forms; and 9) it is easier for small businesses
to spawn new business.
Timing the adoption of new technology by small firms was considered in
research conducted by Bryant, Estrin and Kantor (1990). The authors concluded that a
firm that is a too-early adopter of a new technology may incur high development costs
which are never recovered. Similarly, a late adopter of a new technology can fall
behind its competitors. The success of adoption and implementation requires not only
careful planning, and managerial and organizational commitment, but also a careful
analysis of the appropriate time to adopt the technology. Some of the strategies
outlined by the authors included: 1) do not be the first to plunge; 2) gather information
from multiple sources and validate; 3) be aware that traditional capital-investment
tools may be inadequate; 4) learn from the experiences of similar firms; 5) where
possible, employ incremental adoption; 6) move from the known to the unknown; 7)
where possible, have the equipment vendors absorb as much of the risk as possible; 8)
identify constraining personnel skills; 9) attempt to gain an understanding of the costs
and potential missed opportunities of not acquiring the technology; and 10) attempt to
choose technologies which provide a platform for business growth consistent with the
firm's strategy.
Alpar and Ein-Dor (1991) polled small US firms (using a free form survey) on
their 'concerns' with respect to information technology (See Table 1). As they point
out, the two top items centered on issues of reliability and system quality.
Table 1: Small US Firms Information Systems Concerns Ranking
Rank Category
1 Reliability2 System Quality3 Change4 Cost5 Development6 Integration7 Control8 People9 Data Management10 Hardware11 Software12 Specific Applications
(Alpar and Ein-Dor, 1991)
An earlier Canadian study, Rivard, Boisvert and Talbot (1988) surveyed IS
managers in small and large firms across Canada. Their data suggested that IS
managers in small firms had a different set of issues from those in large firms. Small
firms were more concerned with operational issues such as: 1) ensuring data quality
and integrity; 2) remaining up-to-date with respect to new developments in the field;
and 3) complexity of the nature of the IS department.
The adoption of information technology poses both a threat and opportunity for
small enterprises (SMEs). In their 1993 study, Blili and Raymond discovered that
decisions relating to the adoption of a new technology commit small firms for the long
term, and that the risks are as great as the potential gains. The authors proposed a
planning framework for analyzing both the threats and opportunities created by the
adoption of IT within SMEs (See Table 2). They measured the issues on a ten-point
scale.
Table 2: US MIS Executive Information Systems Issue Ranking
Rank Mean Issue
1 8.32 Developing and Implementing an Information Architecture2 8.31 Making Effective Use of the Data Resource3 8.06 Improving IS Strategy Plan4 7.74 Recruiting and Developing IS Human Resources5 7.54 Facilitating Organizational Learning6 7.39 Aligning IS Organization within the Enterprise7 7.34 Using Information Systems for Competitive Advantage8 7.22 Improving the Effectiveness of Software Development9 6.92 Planning and Managing Communication Networks10 6.85 Increasing Understanding of IS Role and Contributions11 6.63 Integration of Multi-Vendor Open System Technologies12 6.63 Developing and Managing Electronic Data Interchange13 6.37 Managing the Existing Portfolio of Legacy Applications14 6.20 Measuring IS Effectiveness and Productivity15 6.02 Managing Decision and Executive Support Systems16 5.93 Facilitating and Managing End-User Computing
(Niederman et al, 1991)
A study published by Lin, Vassar and Clark (1993) found that small business
executives have become more concerned about the importance of information
technology for three reasons: 1) the competition is adopting technology and using it
more effectively; 2) the cost of IT has decreased and the benefits have increased; and
3) deregulation and lower cost of telecommunications have created new dynamics and
strategic opportunities for small firms to deploy technology to mask their size from
external partners.
Managers interested in helping their organizations change and adopt new
technologies devote more attention to formal means of importing information, even
though much critical and influential information is disseminated through informal and
interpersonal contacts. In a study conducted by Macdonald (1995), the issue of what
should be the managerial role in extending the organization’s informational boundaries
was examined.
In much of the Management Information Systems (MIS) literature on end-user
computing, it is assumed that the organization’s MIS unit will provide computer
training and support centrally. It is also assumed that the resulting training and support
will be adequate to high quality. In a study conducted by George, Iacono and Kling
(1994), the authors showed that users receive more training and support in their local
decentralized area than from centralized MIS. However, the authors concluded that
very little is known about how users really learn the computing skills necessary for
them to complete their primary work.
Their study focused on four work groups in Tucson, Arizona, which were part
of a Desktop Computerization Project. The findings of the study revealed that for all of
the four work groups, the majority of the training and support came from local sources.
In answer to the initial research question about how office workers learn about the
computing systems they use, the authors discovered that office workers learn about
computing primarily from co-workers . This is true even in organizations where
training and support are provided centrally. Even though two of the groups could have
used and benefited from the centralized provision of training and support, they still
relied more on local training and the support networks that had emerged over time.
In the implementation of an organizational innovation, managers are usually
presumed to influence the extent to which the innovation is adopted and used by
subordinates. However, research findings by Leonard-Barton and Deschamps (1988)
suggest that managerial influence is not equally perceived by all subordinates. Users
who adopted the expert system who were low in personal innovativeness and for whom
the subjective importance of the task being computerized was low, perceived that
management had encouraged them to adopt. In contrast, users who rated high on any
of these measures did not perceive any management influence in their adoption
decision. Moreover, although access to the innovation was in fact highly similar for all
users, high performers were more inclined than low performers to perceive the system
as more accessible. These findings suggest that the diffusion of an innovation within an
organization may be a two-step managerial process. Employees whose characteristics
incline them to adopt an innovation will do so without management support or urging
if it is simply made available. In other words, employees await a managerial directive
before adopting.
Information technology is increasingly being applied to a broad range of
operational, managerial and strategic tasks in organizations. Still, few organizations
have been able to demonstrate consistent success applying IT, and wide variances in
success can be observed across organizations. In their study, Zmud, Boyton and Jacobs
(1987) examined managerial strategies for increasing information technology
penetration in organizations. The authors defined information technology management
as all managerial efforts associated with planning, organizing, controlling, and
directing the introduction and use of information technology within an organization.
The authors contrasted two perspectives of information technology management. The
first perspective holds firmly to the view that the information system function
maintains primary control of an influence over information technology penetration and
that a well-developed set of information system management processes is crucial to
organizational efforts to attain high levels of IT penetration. The second is that an
organization’s success in achieving a high level of IT penetration results from the
combined efforts of: 1) the organization’s IS managers pushing or marketing IT
products and services to general managers; and 2) the organization’s general managers
pulling or requesting IT products and services into their sub-units. Managing
technological change has become one of the critical determinants of organizational
performance, if not survival, for many SMEs.
Further research conducted by Raymond, Julien, Carriere and Lachance (1996)
has revealed that there is no 'best' strategy for managing technological change within
SMEs. Socio-economic pressures and the reaction to these pressures, appear to
constitute the main determinants of decisions regarding the adoption of a new
technology within small enterprises.
The most recent study on the changing faces of information system issues in
small firms is the one by Poutsma and Walravens (1989), who discuss the top ten
issues Canadian small firms expect to face in the 1995-2000 era. These issues are: 1)
information systems are used by small firms for competitive advantage; 2) to improve
IS project management practices; 3) to improve the effectiveness of software
development; 4) to build a responsive IT infrastructure; 5) to align the IS organization
within the enterprise; 6) to cope with the degree and rate of technology change; 7) to
plan and manage communication networks; 8) to facilitate and manage business
process redesign; 9) to educate the user; and 10) to recruit and develop information
system human resources.
Summary
Currently, four major bodies of literature examine adoption. These include: (1)
organizational science; (2) engineering, research and development management; (3)
management information systems; and (4) communication. The review presented in
this chapter served four purposes. First, it provided an understanding of prior research
concerning the adoption or rejection of a new technology. Second, the review aided in
the identification of relevant and timely research questions. Third, the review aided in
the explication of the factors influencing the adoption or rejection of new technology
by small firms. Fourth, the literature review highlighted previous researchers’ work,
especially their theoretical concepts, definitions, theory usage, items and findings.
In summary, from an end-user perspective, pertinent findings to date include
end-users' voluntariness and image along with the perceived usefulness, ease of use
and usage of a new technology. Image was seen as an important variable and as part of
Rogers classification of relative advantage. Rogers argues that "undoubtedly one of the
most important motivations for almost any individual to adopt an innovation is the
desire to gain social status" (1983, p. 215). The constructs perceived usefulness, ease
of use and usage of information technology have been the focus of much recent
research. Studies have shown that ease of use and usefulness are positively correlated
with usage, but that ease of use is less important overall in determining use (Adams,
Nelson and Todd, 1992). User expectations and perceptions have also received a lot of
scholarly attention. Results suggest an association between realism of users'
expectations/perceptions and performance, and that users who hold realistic
expectations prior to implementation are more satisfied with a system and use it more
than users whose pre-implementation expectations are unrealistic. This body of
research was used as background material during the cross-case analysis segment of
this study between adopters and rejecters and their differences in perceptions of the
innovation.
Other factors found to influence the adoption process include champions,
training and support and managerial influence. Champions were identified in this study
as individuals who had usually tried the innovation and helped to guide it through the
trialability stage when resistance was usually at a peak. They persevered through either
a rational, participatory or renegade process to have the innovation adopted. Training
and support were other constructs reviewed in the literature section. It has been shown
that users receive more training and support in their local area and from colleagues
than from centralized MIS (George, Iacono and Kling, 1994).
Lastly, from an organizational perspective, a recent study by Poutsma and
Walravens, (1989) suggest that four phenomena are occurring: 1) owner/operators of
SMES have begun to see the power of IT and are finding the resources to adopt it; 2)
who cannot afford to make significant mistakes and are very hesitant about adopting
technology unless it can positively impact profits; 3) small businesses generally have
low levels of information technology expertise; and 4) with the adoption of more IT,
small firms are recognizing the need to be flexible with their information systems, just
as they are in all other operations. In conclusion, recent findings indicate that small
firms continue to desire more internal control over operations, and are consequently
adopting more information technology in order to become more competitive.
CHAPTER III
METHODOLOGY
Case Study
This chapter provides an overview of the procedures used to conduct the study.
It begins with an explanation of why the case study was used as a methodology to
investigate the phenomena. It then continues with a with a review of the actual design
of the research and a statement on the study's reliability and validity assumptions, and
concludes with a description of document sources and the case protocol.
The methodological components of this study follow the advice of Yin (1991,
1984), Bogdan and Biklen (1992), and Huberman and Miles (1994) for qualitative
research design. The case study methodology was selected as the preferred strategy for
the research due to the preponderance of 'how' or 'why' questions. The author felt the
case study was a viable research design to investigate a contemporary phenomenon
within a real-life context (eg., the adoption of a new information technology in a small
business setting). The case study, as a research strategy, focuses on a set of decisions:
1) 'why' they were taken; 2) 'how' they were implemented; and 3) with 'what result'
(Schrum, 1985).
This study examined the complex social phenomena of adoption,
discontinuance, or rejection of a new technology in the small business sector. It also
retained the holistic and meaningful characteristics of real-life events, which support or
reject the adoption process itself. Three kinds of data sources were used to supplement
and verify results. Those methods were considered by the researcher to be appropriate
for out-lining the research area and the proposed research question. The three data
sources used in this study included: 1) a review of the relevant literature; 2) in-depth,
open ended and close-ended interviews; and 3) an examination of each firm's annual
reports. This allowed the researcher to simultaneously consider historical, social, and
economic data sources Huberman and Miles (1994). The advantage in proceeding with
multiple data sources is that such a strategy develops converging lines of inquiry and
triangulates information among different sources (Yin, 1991).
Additionally, it was the researcher’s intent to use a 'heterogeneous'
methodological approach to examine small firms in the oil and gas industry. (The oil
and gas sector is a rapidly changing contemporary field. It is in a state of constant
fluctuation and depends on the market value of oil and gas prices). The triangulated
approach allows the researcher to critically and objectively evaluate the credibility and
consistency of each piece of information collected. This methodology also provides the
researcher with a deeper analysis which goes beyond 'descriptive' analysis.
The extensive interviewing of users adopting, discontinuing or rejecting the
innovation allowed the researcher to collect current data, and enabled interpretive
judgements to be drawn out and understood throughout the research process (Yin,
1991). The researcher commenced with the assumption that all data could be verified
and cross checked for accuracy against other sources to provide this study with a more
refined and authoritative foundation. It is also worth noting that the goal was to
develop a robust methodology that future researchers could follow in replicating the
study.
Research Design
Qualitative data can provide rich descriptions and explanations of processes
within a local context. According to Huberman and Miles (1994), qualitative data can
preserve chronological flow, which allows a researcher to see precisely which events
lead to which consequences, in order to derive fruitful explanations. Well-grounded
data can lead to new findings involving the integration of conceptual frameworks and
observable phenomena. According to Huberman and Miles (1994), qualitative studies
can be organized into concrete, vivid, meaningful stories. This research is the story of
ten small oil and gas companies and the processes leading up to their decisions to
either adopt, discontinue or reject the portable digitizer and its accompanying software.
In the planning stage, the author focused on the study's issues, the number of
cases to be studied, the data to be collected and how the data would be managed and
analyzed. The author felt that this type of anticipatory data reduction would constrain
later analysis by ruling out certain variables and relationships. For example, the author
paid no attention to the implementation process. However, a great deal of time was
devoted to focusing on end-users’ perceptions and their decisions leading up to the
adoption/discontinuance/rejection of the innovation.
The author also designed the research using well-delineated constructs taken
from the research of Hackett, Mirvis and Sales (1991) on "The Implementation and
Adoption of New Technology in Organizations", and constructs from the
"Development of an Instrument to Measure the Perceptions of Adopting an
Information Technology Innovation “ (Moore and Benbasat, 1991). For heuristic
purposes, the variables were sorted using a qualitative numerical indexing and sorting
software program NUD*IST Version 4 Non-Numerical Unstructured Data Indexing
Searching and Theorizing. This program is intended to aid researchers in the
qualitative analysis of non-numerical and unstructured data. It does so by supporting
processes of coding data in an index system, searching text or searching patterns of
coding and theorizing about the data. NUD*IST was used by the researcher for
heuristic purposes to provide a guide for the direction of the research. It was used as a
tool for managing information derived from the transcripts of interviews and from
annual reports. The software program enabled the researcher to manage construct
categories and to link variables with new ideas discovered in the data.
This research is therefore 'confirmatory' in nature. Each case study consisted of
a loose, emergent design to better examine parts of the phenomena that are not well
understood. Therefore, at the onset, the author had a rudimentary conceptual
framework, a set of general research questions, some notions about sampling, and an
assortment of data gathering devices.
Criteria for Quality of Research Design
Reliability: Reliability is concerned with the accuracy and comprehensiveness
of the data collected. Reliability in this context is seen as a good fit between what data
have been recorded and what occurs in the study setting, rather than an empirical
consistency across different observations (Bogdan and Biklen, 1992). According to
Yin (1991, 1984), the goal of reliability is to minimize the errors and biases in a study.
External reliability addresses the issue of whether independent researchers would
discover the same phenomena in the same or a similar setting. Internal reliability refers
to the degree to which other researchers, given a set of previously generated constructs
would match them with data in the same way as did the original researcher (LeCompte
and Goetz, 1982).
One way to enhance external reliability is the careful identification of
respondents and delineation of the physical, social, and interpersonal contexts within
which the data were gathered (LeCompte and Goetz, 1982). One prerequisite for
allowing other researchers to repeat an earlier case study is the documentation of the
procedures followed by the earlier case. In the past, case study research procedures
have been poorly documented, making external reviewers suspicious of the reliability
of the case study. To deal with the documentation problem, the researcher used a case
study protocol and the development of a case study database, which was employed
during the data collection phase of this research. The case study protocol describes
each case study through the use of interim case summary outlines which can be
reviewed starting on page 70.
Error can slip into the measurement process from several different sources.
Perhaps a question was worded ambiguously or misunderstood by the respondent.
Whatever the cause, all measurement is subject to some degree of random error. Table
3 explains the case study tactics employed by the author to improve the quality of this
research design and to minimize error.
Table 3: Case Study Tactics for Quality of Research Design
Tests Case Study Tactic Phase of Research
Construct Use multiple sources data collectionValidity of evidence.
Establish a chain of data collectionevidence
Internal Validity Do pattern matching data analysisDo explanation-building data analysis(do time-series analysis) data analysis
External Validity Use replication research designlogic in multiple-cases research design
Reliability Use case study protocol data collectionDevelop case study data data collectionbase
(Yin, 1991, 1984) p. 41
Replicability is the final test whereby if a later investigator followed exactly the
same procedures as described by an earlier investigator and conducted the same case
study all over again, the later investigator would arrive at the same findings and
conclusions (Yin 1991,1984). In general, the researcher approached the reliability
problem by operationalizing and documenting as many steps as possible. These efforts
enhanced the replicability of the study. Replicability is impossible without precise
identification and thorough description of the strategies used to collect the data
(LeCompte and Goetz, 1982).
Validity: In addition to being reliable, a measurement must be valid if it is to be
of use in studying variables. A valid measuring device measures what it is supposed to
measure (LeCompte and Goetz, 1982). Assessing validity requires some degree of
judgement. Typically a measurement winds up somewhere in the middle of being
totally valid or invalid (LeCompte and Goetz, 1982). Accordingly, there are two main
questions associated with matching scientific explanations of the world with actual
conditions in it. Do scientific researchers actually observe or measure what they think
they are observing or measuring; and to what extent are the abstract constructs and
postulates generated, refined, or tested by scientific researchers applicable across larger
groups? (LeCompte and Goetz, 1982).
Threats to the external validity of research findings are those effects that
obstruct or reduce a study's comparability and translatability. Problems of external
validity affect the generalizability of the study (LeCompte and Goetz, 1982). Because
sample size is an insufficient condition for confident generalization, the researcher
addressed four factors which could have affected the credibility of the study for cross
group comparisons: 1) selection effects; 2) setting effects; 3) historical effects; and 4)
construct effects. To better manage these factors, the triangulation of three data sources
was used wherever possible to provide better substantiation of results. These included a
review of the relevant literature, in-depth, open ended and close-ended interviews, and
an examination of each firm’s annual reports.
In this study, problems due to respondent selection effects were managed by the
small number of specialized persons interested in adopting the technology. Setting
effects presented limited difficulty due to the non-experimental nature of this research.
History effects presented problems due to respondents' failure to recall past events.
Documented evidence in the case of annual reports was also used to minimize past
historical associations.
Construct validity is used to establish appropriate operational measures for the
concepts being studied. According to Yin (1991,1984), construct validity is especially
problematic in case-study research. People who have been critical of case studies often
point to the fact that a case study investigator fails to develop a sufficiently strong set
of operational measures, and that 'subjective' judgments are used to collect the data. To
increase construct validity, the researcher used both newly created and existing items
from a parsimonious 44-item instrument developed by Moore and Benbasat (1991).
See Appendix B Respondent Questionnaire.
While attaining absolute validity and reliability is an impossible goal for any
research design, the researcher used the above objectives and criteria to create a variety
of strategies to reduce threats to both validity and reliability.
Instrumentation
This researcher used an instrument to measure the perceptions of adopting an
information technology innovation developed by Moore and Benbasat (1991). The
instrument was intended to be a tool for the study of the initial adoption of IT
innovations within organizations. The study conducted by Moore and Benbasat (1991)
included voluntariness and image. Items based on Rogers' research, relative advantage,
compatibility, complexity, observability, trialability, along with two-newly created
items by Moore and Benbasat (1991), were placed in a common pool and subjected to
four rounds of sorting by judges to establish which items should be placed in the
various scales. The result was a parsimonious, 44-item instrument that can be used to
investigate how perceptions affect individuals’ actual use of information technology,
as well as other innovations. A total of 31 items were used from Moore and Benbasats'
(1991) instrument as part of a template for respondent questions during the interview
and data collection of this study. (See Respondent Questionnaire Appendix B).
This is a multiple-case (N=10) study in which the phenomena are known
moderately well, but are not fully grounded from prior empirical research. Therefore
the author decided on a design involving open-ended questions. The author developed
a semi-structured interview guide, but used some latitude to employ a personally
congenial way of asking and sequencing questions, depending on the latter's
inappropriateness for the different respondents. For example compatibility, complexity
and image questions were not pertinent to non-adopters and were therefore not used.
The author also tried to follow the trail of trialability, adoption, discontinuance and
rejection as closely as possible to avoid respondent recall problems. The contextual
questions on user attitudes and experiences were asked, if time permitted, and were
grounded in the theoretical framework of Hackett, Mirvis and Sales (1991).
Demographic questions about each respondent were posed by the researcher of the
respondent at the beginning of each interview. Organizational questions regarding the
firm’s histories were answered through the researcher’s review of annual reports. A
copy of each firms' annual report was requested at the end of the interview.
Research Questions
The research task was to understand the adoption or rejection of a new
information technology by a small business. Given this rationale, the problem of
interest is stated as:
What factors explain the adoption, discontinuance and rejection of the portable digitizer over time among small Canadian oil and gas firms?
To meet the objectives of the study, the following hypotheses were proposed:
H1: A 'performance gap' between actual and desired results involving competitors’ practices, missed opportunities in the marketplace, or unmet customer expectations will most likely motivate companies to adopt the portable digitizer.
1 Identifying performance gaps2 Identifying desired results
3 Identifying competitors' practices4 Identifying missed opportunities in the marketplace5 Identifying of unmet customer expectations6 Determining IT usage for competitive advantage7 Determining factors influencing adoption/rejection
H2: Companies that know how to apply the portable digitizer to the problems at hand will be more likely to adopt the new technology.
1 Identifying organizational problems2 Determining usage of the innovation3 Investigating decision-making process4 Determining factors influencing adoption5 Determining factors influencing rejection
H3: End users must be educable in the new processes involved in using the portable digitizer and see some benefit accruing to them if they and their companies are to gain full advantage of the new technology.
1 Tracking knowledge development of the innovation2 Identifying new processes involved in using the innovation 3 Identifying efficiencies of adopting the innovation4 Determining benefits of adopting the innovation5 Inquiring about organizational policy in adopting new technology6 Determining factors influencing adoption7 Determining factors influencing rejection
H4: The more amenable to demonstration the portable digitizer is, and the more visible its perceived advantages are, the more likely it is to be adopted.
1 Determining end-users' perceptions of the demonstration2 Determining visibility of the innovation3 Determining time/location of demonstrations of the innovation4 Inquiring about channels of communication and awareness of the
innovation5 Determining task issues6 Determining control issues7 Determining performance issues8 Determining effectiveness issues9 Determining productivity issues10 Determining factors influencing adoption11 Determining factors influencing rejection
H5: The perception that a company's usage of the portable digitizer enhances
an individual’s image is positively related to its adoption.1 Identifying end-users' image in the organization2 Identifying prestige issues related to using the innovation3 Identifying status issues related to using the innovation4 Determining factors influencing adoption5 Determining factors influencing rejection
H6: Users who have tried the prototype (the Ruler) of the portable digitizer will be more likely to find it compatible with their past experiences and needs, thereby enhancing the likelihood of its trialability and adoption.
1 Identifying past experiences associated with the innovation2 Identifying needs for the innovation3 Identifying compatibility issues4 Determining factors influencing adoption5 Determining factors influencing rejection
H7: The more complex the portable digitizer is perceived to be by the end user relative to available alternatives, the more likely it will be rejected or discontinued.
1 Identifying complexity issues2 Determining alternatives to adopting the innovation3 Determining factors influencing adoption4 Determining factors influencing rejection
H8: The longer a new technology is rented, the greater the likelihood users will become more knowledgeable about the innovation's relative advantages, and the more likely they will be to adopt.
1 Determining length of rental period2 Identifying knowledge development of the innovation3 Identifying advantages of using the innovation4 Identifying disadvantages of using the innovation5 Determining factors influencing adoption6 Determining factors influencing rejection
Sample
The literature is divided on how to define small business. Some studies use
annual sales figures of less than $10 million (Weinstein, 1994). However, it has been
suggested that private companies are often reluctant to disclose their annual revenues
(Montazemi, 1988). Those who discriminate based on number of employees have
chosen different thresholds. For example some chose less than fifty employees (Lai,
1994), one hundred (Doukidis, Smithson and Lybereas, (1994), and two hundred and
fifty (Kagen, Lau and Nusgart, 1990).
The sample for this study consisted of ten small oil and gas companies with
less than one hundred employees each. The sample did not include branch offices or
subsidiaries of larger companies. The sample was purposeful rather than random.
Cases were selected from a list of firms provided by the vendor of recent sales or lost
sales. Informants were generally from upper management, or were geologists,
geophysicists and geo-technicians who used the innovation. The vendor was a trained
geologist who routinely contacted geophysicists and geologists in order to demonstrate
the innovation.
Boundaries were imposed which included examining only the adoption,
discontinuance or rejection process, and not implementation. Only respondents
involved with the decision-making process to adopt, discontinue or reject were
interviewed. This type of purposeful sampling, both within and across cases, was
intended to describe and explain the general constructs and relationships of the
adoption and rejection decision-making process.
Sample Criteria
The purposeful sample was culled from a total population of one hundred and
seventy small oil and gas firms based in the city of Calgary, Alberta. Sampling
parameters were outlined before the data collection commenced. The sample, as
illustrated in Table 4 consisted of ten cases (companies), in the oil and gas sector. All
ten cases had less than one hundred employees each, which is the Canadian Federal
Government's definition for a small firm (Statistics Canada, 1997). In some cases, the
company organizational hierarchy was totally flat and consisted solely of presidents,
partners or directors. Two such companies were Case #4: Canadian Petroleum and
Case #7: Capella. Half of the companies were privately owned, the other half public.
The companies had incorporation dates spread over a twenty-year period, 1975 to
1995. The author conducted interviews over a nine-month period, from December
1996 - August 1997, interviewing 23 informants. Twenty of the 23 interviews were
conducted in person, three were conducted by telephone. Seven out of ten firms were
involved in gas and oil exploration/development, while the remaining three offered
consulting services related to exploration and development. At the time of the study (as
illustrated in Table 4), two firms were in the trialability phase of the adoption process,
three firms had already adopted the innovation, three had rejected the innovation, and
two firms had tried the innovation, and had subsequently discontinued using it and its
accompanying software package.
Table 4: Characteristics of Field Study Sample- Cases 1-10
The author also tried to build a ‘within case’ sampling procedure that had an
'iterative' or 'rolling' quality, working in progressive ' waves' as the study progressed
and unfolded. At each step of the evidence trail, the author was led to informants and
observations, made sampling and boundary decisions, clarified main patterns, and tried
to identify contrasts, discrepant instances and negative nuances. The multiple-case
sampling procedure was intended to add confidence to the findings by comparing five
cases in which the innovation was adopted with five contrasting cases in which the
innovation was either discontinued or rejected.
The setting for twenty of the twenty-three interviews was on-site, sometimes in
a boardroom, but more frequently in the user's office. Informants ranged from top
management to lower level geophysical and geological technicians. As reported in
Table 5, the interviews were conducted face-to-face by the researcher in order to
follow the decision making processes leading up to the adoption, discontinuance or
rejection of the innovation.
Table 5: Sampling Parameters
Setting: Small oil and gas firms, explorative or consultative in nature, with less than one hundred employees, and Calgary-based. Interviews conducted on-site, usually in user’s office.
Informants: Geologists, geophysicists, users, managers, Vice- Presidents or Presidents. Any one involved in the technology innovation decision process.
Events: Initial trials of using/learning/rejecting/discontinuing the innovation.
Process: Following decision-making patterns/processes.
Context: Interviews were conducted face-to-face, using each respondent’s office. (The exception to the rule were two respondent interviews conducted by telephone). Hand-written notation recorded the conversational interviews which lasted approximately twenty minutes.
Selection Criteria
Sampling was a potential problem in this research. The challenge was to insure
balanced and diverse representation among respondents from both private and public
firms across a variety of different job functions, who had some input in the decision-
making process. These job functions were divided among four areas of employment:
lower level geo-technicians, geologists and geophysicists, managers, and upper
management: vice-presidents and presidents. The matrix in Table 6 outlines the various
respondents and their professional classification.
Table 6: Matrix of Categorized Respondents Interviewed
This research also depended on "snowball" sampling. This type of sampling
method uses respondent referrals as a way of increasing the respondent data set from
each firm. In a typical situation, the researcher inquired at the end of the interview if
the respondent could provide any referrals for additional information on a particular
point or in general. This type of sampling method helped respondents to reveal
interpersonal networks and the decision-making process involved in adopting or
rejecting a new information technology. It should be noted that the results obtained
from snowball sampling are non-probablistic and non-scientific. The main drawback
of a non-probability or purposive sample is its limited generalizability. This essentially
means that no inferences can be made to larger groups or similar circumstances.
Although reasonable attention has been given to address these problems, difficulties
can still result from selective memory, reinterpretation of history in current settings,
respondent maturation, response variability over time, interviewer bias,
question/response ambiguity, misinterpretation of questions, technical translation
problems, errors in interpretation and personal bias.
To minimize the inevitable errors, two general methods were used for internal
and external checks. First, internal checks were used to validate the meaning and the
quality of a given response in relation to some other reply or piece of data. The most
direct internal check involved the use of open-ended questions requiring respondents to
elaborate or expound on an idea. Second, an external check was used to compare the
respondent data with the findings on the same related problem collected or reported by
others. Third, a historical check was made of each firm’s annual reports. This is called
triangulation of sources and is similar to triangulation of methods discussed previously.
Data Sources
If research into small business is to contribute to a growing body of literature
that will help managers and users to decide and act upon their technology needs, a
comprehensive understanding of the adoption of the technology innovation decision
process is required. This research process begins with gathering information on the
issue to provide understanding of the relevant conditions. Background information for
this study came from two sources: 1) annual reports; and 2) interviews with end-users,
managers, vice presidents and presidents who have authority in the decision-making
process to either adopt or reject a new technology. This accumulated information
confirmed certain deficient conditions, such as the editorial slant of each annual report
and the tendency for each firm to look aggressive, successful and financially viable to
the public or its board of directors. The material obtained from the annual report of
each firm was designed to cross check and supplement data obtained from other
sources (see triangulation discussion in this section). For the most part, contradictory
data were not encountered in the literature review, annual report review or
conversational interviews. The annual reports were very useful for verifying correct
spelling of organizational names and titles mentioned during the interviews, in addition
to constructing the organizational charts to outline the chain of decision-making to
either adopt or reject a new technology purchase.
Interviews
A substantial part of the study depended on personal interviews, where first-
hand information was obtained, and interaction with senior-level respondents provided
an opportunity to contrast opinions from end-users and managers. At a very early stage
in this study, the researcher spoke with the vendor to help shape the study's initial
direction. This aided in determining who should be interviewed and which issues were
likely to bear on the adoption or rejection of the innovation. Preliminary conversations
with the vendor also helped to explain the nature of the innovation, its accompanying
software, and the process involved in setting up demonstration appointments. In the
semi-structured interviews, the talking-point questions were open-ended, short and to
the point, requiring respondents to draw on their own recall of first awareness of the
innovation and their own experiences using the innovation. Some of the earlier
answers produced additional questions used in later interviews. Macro-level and micro-
level questions were used to gather broad detailed information. For example, with a
macro question, a senior-level respondent could be asked to describe the culture of the
firm and whether or not it was pro-technology. Macro-level questions directed to
managers asked them to outline this organizations' decision-making process, while
micro-level questions could be directed to end-users about complexity or compatibility
issues surrounding the use of the innovation.
Macro-level and micro-level questions shed light on each respondent's
experiences, perceptions and political orientations. The same general set of questions
were asked of all of the respondents. The names of the respondents and their job
function within in each firm are outlined in each of the interim case study outlines. The
contact person was the name given to the researcher by the vendor of the portable
digitizer. Formal interviews were arranged by calling the vendor for a contact name,
usually the end-user in the firm who had been given a recent demonstration of the
portable digitizer. The researcher telephoned the contact person and conducted a
preliminary interview asking general questions about the portable digitizer and the
end-user’s perceptions of the innovation. At the end of the preliminary interview, a
formal time was set for a face-to-face meeting at the respondent’s office.
Questions about the firm and the respondent’s position in the firm were asked
before a set of questions were put to the respondent. Interview questions are outlined in
Appendix B. Each set of questions was directed to each respondent in the same way,
with minor revision, where appropriate, for the respondent's individual circumstances.
The researcher used her personal experience to determine the revision needed to make
the question more appropriate for a given respondent. The formal questionnaire was
developed from the literature review, and constructs developed in the research
conducted by Hackett, Mirvis and Sales (1991) and Moore and Benbasat (1991). The
researcher decided against using a tape recorder. All conversational material was
recorded by the researcher using short hand and a steno pad. The field notes were then
typed on a computer, indexed and formatted for NUD*IST Version 4 and coded for
later reference and analysis. The case studies included a review of each company's
annual report. This researcher depended on judgement and interviews to illuminate
themes in the data. For heuristic purposes, all of the data was combined into the
NUD*IST software package to establish and confirm independent reliability.
Limited biographic information is included in each interim case study outline.
In some cases, the respondent offered a demonstration of the innovation. The
researcher viewed this deviation from the interview process as merely informational
and did not make any judgements on the user’s ability, knowledge or expertise in using
the portable digitizer. Demonstrations were witnessed by the researcher as part of the
learning process required to understand complicated geological and geophysical
information. Follow-up questions were asked of some of the respondents to clarify
questions arising from the field notes and/or to collect additional information.
Document Analysis
Document analysis involved the examination of various types of financial
reports supplied by the ten firms. At the end of each conversational interview, a
request was made by the researcher to each respondent for additional information
about the firm. These documents comprised investor relations updates, property
dispositions, exploration proposals or annual reports. Table 7 lists the type of financial
document received from each firm.
Table 7: Table of Categorized Corporate Documents
Corporate Name Type of Document Date
1 Probe Exploration Inc. Investor Relations Update 1997
2 Trinity Energy Ltd. Property Disposition 1997
3 Petrel Robertson Ltd. Various Exploration Proposals 1997
4 Canadian Petroleum Engineering Inc. Company Profile Report 1997
5 Star Oil and Gas The United Company Annual Report 1997
6 Founders Energy Ltd. Annual Report 1997
7 Capella Exploration Services Ltd. Annual Report 1997
8 Jordan Petroleum Annual Report 1997
9 Summit Resources Ltd. Annual Report 1997
10 Pan East Annual Report Annual Report 1997
The data were then entered into the NUD*IST software package along with the
respondent interviews. These variables can be viewed in the “cross-case analysis”
sections of this study commencing on page 110.
Throughout the course of this research, a review of the relevant literature was
continuously used to enhance and refine the analysis. The diversity of this information
provided the basis for a more complete understanding of the technology innovation
process and the economic, technical and social issues contained therein.
Interim Case Summary Outlines
Researchers have four main concerns about data analysis: 1) the data has not
illuminated what they were supposed to; 2) systematic error has occurred, commonly
in the form of biased responses; 3) conclusions come out looking either trivial; 4) the
data resist analysis, are opaque or even inscrutable (Huberman and Miles, 1994). As a
result, much preventative care was given by this researcher to proper sampling,
validated and reliable instrumentation, and methodological data collection. The interim
case study was used as an integrative exercise that helped to collate the main findings,
and to list gaps, puzzles, and data that still needed to be collected. The interim case
summaries provided a synthesis of what this researcher knew about each case and also
helped to indicate what remained to be investigated. The summaries presented an
overview of the findings, a careful look at the data which supported them and the
agendas for the next waves of data collection (Huberman and Miles, 1994). The
interim summaries were the first attempt to derive a coherent, overall account of each
case. The common formatting enabled a cross-case comparability suggesting promising
avenues for further analysis and illuminating themes and concepts that existed in more
than one case.
Case One: Probe Exploration - AdoptionThe Site:
Company name: Probe Exploration Incorporated. Incorporation: Public 1975. Functions: Oil and Gas Exploration & Development. Address: 1250, 840 - 7th Avenue S.W. Calgary. Telephone: 233-2464. Number of Employees: 14 Contact name from vendor: Barrie Wright. Position: Vice President Probe Exploration. Demonstration by vendor: November 6th, 1997. Hardware/Software: The Portable Digitizer & Volumetric package. Number of Informants: One. First Interview: Vice President Barrie Wright on December 10th, 1996. Rental: Six-week period. Corporate Documentation : 1996 Annual Report, 1996 Investor Relations
Update Organizational Chart Figure 4. Probe Exploration showing informant and
his relationship to others in the firm.
Figure 4. Organizational Chart Probe Exploration
Case Two: Trinity Energy - Adoption
Tec h nic ian Tec hn ic ia n Tec h n ic ian Tec hn ic ian Tec h n ic ian Tec hn ic ian Te ch n ician Tec h nic ian
O per ation s M an ag er G e o log is t
S e cre ta ry of S ta ff
C on t ro lle r
V ice-P res id en tB arr ie W rig h t
P res id en t
The Site: Company name: Trinity Energy Limited. Incorporation: Private 1987. Functions: Oil and Gas Exploration & Development. Address: Suite 1250-605-5th Avenue S.W. Calgary. Telephone: 2627495. Number of Employees: Sixteen. Contact name from vendor: Dave Thomas. Position: Geophysicist. Demonstration by Vendor: January 30th, 1997. Hardware/Software: Portable Digitizer & Digitizing Software. Number of Informants: Three. First Interview: Geophysicist Dave Thomas, February 18th, 1997. Second Interview: GeoTechnician Kim Russell, February 18th, 1997. Third Interview: President Michael Heier, February 19th, 1997. Rental: Three-week period. Corporate Documentation: 1997 Property Disposition. Organizational Chart Figure 5. Trinity Energy showing informants and their
relationships.
Figure 5. Organizational Chart Trinity EnergyCase Three: Petrel Robertson - Adoption
The Site: Company name: Petrel Robertson Limited.
G eo Tech n icanK im R u ss e ll
G eolog istDa ve Th om as
Tech n ician s1 0 F ie ld S ta ff
O p eration s G e o log ist
V ice -P res id en tE n g in eer
P res id en tM ich ae l He ier
Incorporation: Private 1977. Functions: Consultants in Oil & Gas Exploration & Development. Address: 2801-18th Street N.E. Calgary. Telephone: 250-8299. Number of Employees: 27. Contact name from vendor: Arezki Loghlissen. Position: Manager. Demonstration by vendor: April 14th, 1998. Hardware/Software: Portable Digitizer and Digitizing Software. Number of Informants: Five. First Interview: Manager Arezki Loghlissen on February 27th, 1997. Second Interview: Senior Geophysicist Florence Reynolds on March 18,
1997. Third Interview: Senior Geologist Tim Pontin on March 20th, 1997. Fourth Interview: Senior Geophysicist Irwin Unger on March 25th, 1997. Fifth Interview: President and CEO Michael Doyle, March 25th, 1997. Rental: Six-week period. Corporate Documentation: 1997 Annual Report & Various Consulting
Proposals from 1993-1998.
Figure 6. Organizational Chart Petrel Robertson
Case Four: Canadian Petroleum - Adoption
The Site: Company name: Canadian Petroleum Engineering Incorporated. Incorporation: Private 1995.
P res iden tG e oph ys is t
M ich ae l Do yle
S en io rG eop h ys ic ist
F lo ren c eReyn old s
S e n io rG eo p h ys ic ist
T imP o n t in
S en iorG eop hys ic is t
E rw inU n ger
M ana g erG eoP h ysic is ts
A rez k i Lo u gh liss en
M ana g erG e o lo g y
M ana g erL abo ra to ry
V ice -P res iden tG eo log is t
Functions: Consultants in Oil & Gas Exploration & Development. Address: 1700, 407-2nd Street S.W. Calgary. Telephone: 263-0752 Number of Employees: Six. Contact name from vendor: Ron Bray Position: President & Geologist Demonstration by vendor: May 24th, 1998. Hardware/Software: The Portable Digitizer & Digitizing Software. Number of Informants: One. First Interview: President Ron Bray, July 8th, 1997. Rental: Two weeks Corporate Documentation: 1997 Annual Report Organizational Chart Figure 7. Canadian Petroleum showing informants
and their relationships.
Figure 7. Organizational Chart Canadian Petroleum
P res ide ntM a rk et ing
P re s ide ntG e ol og ist
P re sid en tR on B rayG eolog i st
P re sid en tE n g in eer
P re side ntM an ag erDr illin g
P res ide ntM ec ha nica l
E n g ine er
Case Five: Star Oil and Gas - Adoption
The Site: Company name: Star Oil and Gas. Incorporation: Private 1990. Functions: Oil and Gas Development. Address: 1200 Canterra Tower, 400-3rd Avenue S.W. Calgary. Telephone: 232-3300 Number of Employees: Eight Contact name from vendor: Ken Hale Position: Geologist. Demonstration by vendor: April 2nd, 1998. Hardware/Software: The Portable Digitizer and Digitizing Software Number of Informants: Two. First Interview: Geologist Ken Hale, July 9th, 1997. Second Interview: Geologist Dave Iverson, July 9th, 1997. Rental: None. Corporate Documentation: 1997 Annual Report. Organizational Chart Figure 8. Star Oil and Gas showing informants and
their relationships.
Figure 8. Organizational Chart Star Oil and Gas
O w n er
D ave Ive rsonG eo lo g is t
V ic e P re sd ie n tG eo lo gy
K e n H a leG e olog ist
V ic e P res id e n tR es ou rc es
P res iden tU n ited
C oalC o m p an y
O wn e r O w n er
Case Six: Founders Energy - Rejection
The Site: Company name: Founders Energy Incorporation: Public 1994. Functions: Oil & Gas Exploration & Development Address: 1500-400-3rd Avenue S.W. Calgary Telephone: 296-2233 Employees: Fourteen Contact name from vendor: Mark Oliver Position: Vice President Exploration Demonstration by vendor: June 4th, 1997. Hardware/Software: The Portable Digitizer and GEOCAD Software. Number of Informants: Three. First Interview: Vice President of Exploration Mark Oliver, July 11th, 1997. Second Interview by Telephone: Senior Geologist Tony Pantalone, August
6th, 1997. Third Interview by Telephone: Senior Geophysicist Randy Musuda, August
6th, 1997. Rental: None. Corporate Documentation: President's Message 1997. Organizational Chart Figure 9. Founders Energy showing informants and
their relationships.
Figure 9. Organizational Chart Founders EnergySeven: Capella Exploration - Discontinuance
S e n io r G eo log is tTony P an talon e
S en io r G eop h ys ic is tR an d y M u sud a
V ic e P res id e n tE xp lo ra tionM a rk O liv er
V ic e P res id e n tO p era tions
S e n io r V ic e P res id e n t
P residen t & C E O
The Site: Company name: Capella Exploration Services Limited. Incorporation: Private 1995. Functions: Custom Processing and Data Management. Address: 530, 703 – 6th Avenue S.W. Calgary. Telephone: 262-8277. Number of Employees: Five Contact name from vendor: Doug Phillips Position: Vice President Survey and Mapping. Demonstration by vendor: September 17th, 1996. Hardware/Software: The Portable Digitizer and GEOCAD Software. Number of Informants: One. First Interview: Vice President Survey and Mapping Doug Phillips, July
28th, 1997. Rental: None. Corporate Documentation: 1996 Annual Report. Organizational Chart Figure 10. Capella Exploration showing informant
and his relationship to others in the firm.
Figure 10. Organizational Chart Capella Exploration
V ic e P re s id en tTyp e n am e he reS ur ve y & M ap p i n g
Do u g P h il lip s
V ic e Pr es ide ntB u sin ess D eve lo p m et
V ice Pr e sid en tIn form a tio n S e rv ice s
V ic e P resi d e ntS o ftwa re
D e velop m e n t
M an a g e rData P r oce ss in g
Case Eight: Jordan Petroleum - Rejection
The Site: Company name: Jordan Petroleum. Incorporation: Public 1987. Functions: Oil and Gas Exploration and Production. Address: 255 – 5th Avenue S.W. Calgary. Telephone:266-1024. Number of Employees: Nine. Contact name from vendor: Ken Stag. Position: Senior geophysicist. Demonstration by vendor: Poor recall. Hardware/Software: The Portable Digitizer and GEOCAD Software. Number of Informants: Three. First Telephone Interview: Senior geophysicist Ken Stag, July 28th, 1997. Second Telephone Interview: Senior Exploration Geologist Bruce Beynon,
July 28th, 1997. Third Telephone Interview: Senior Exploration Geologist Frank Muller,
August 26th, 1997. Rental: None. Corporate Documentation: 1996 Annual Report. Organizational Chart Figure 11. Jordan Petroleum showing informants and
their relationships.
Figure 11. Organizational Chart Jordan PetroleumCase Nine: Summit Resources - Rejection
The Site: Company name: Summit Resources Limited. Incorporation: Public 1973. Functions: Oil and Gas Exploration and Production. Address: 2300, 144 – 4th Avenue S.W. Calgary. Telephone: 269-4400. Number of Employees: Fourteen Contact name from vendor: Janice Larsen. Position: Geological Technician. Demonstration by vendor: Unknown. Hardware/Software: The Portable Digitizer and GEOCAD Software. Number of Informants: Three. First Telephone Interview: Geological Technician Janice Larsen, July 28th,
1997. Second Telephone Interview: Geophysical Technician Sara Simms, July 28,
1997. Third Interview: Chief Geologist Jim Ross, August 7th, 1997. Rental: None Corporate Documentation: 1996 Annual Report. Organizational Chart Figure 12. Summit Resources showing informants and
their relationships.
Figure 12. Organizational Chart Summit Resources
M an ag e rE xp lora tion
G eo log ica lTec h n ic ian
Jan ice L arsen
G eop h ysica lTec h n ic ian
S ara S im m s
Ch ie f G eo log istJ im R os s
V ice P re s id entE xp lora tio n
V ice P res id en tL an d
E ng in eers E ng ine ers
E n g in ee r in gM ana ger
V ice P res id en tE n g in ee r in g
Ac co un t ingD e p ar tm en t
In form at ionS ys tem sO ffic ie r
C o n tro l le r
P re s id ent
Case Ten: Pan East Petroleum - Rejection
The Site: Company name: Pan East Petroleum Corporation. Incorporation: Public 1992. Functions: Oil and Gas Exploration. Address: Suite 405, 839 – 5th Avenue S.W. Calgary. Telephone: 234-7477. Contact name from vendor: Chris LeGallais. Position: Development Manager. Demonstration by vendor: Poor recall. Hardware/Software: The Portable Digitizer and GEOCAD Software. Number of Informants: One. First Telephone Interview. Development Manager Chris LeGallais, August
6th, 1997. Rental: None. Corporate Documentation: 1996 Annual Report. Organizational Chart Figure 13. Pan East Petroleum showing informant and
his relationship to others in the firm.
Figure 13. Organizational Chart Pan East Petroleum
V ice P res iden tF in an ce and C o rpora te
D e ve lop m en t
E xp lor a tionG eo log is t
L a nd m an D ril lin g E n g ineer G eo log ica lT ech no log ist
E xp loratio nG eolog is t
E xp lo ra tio nG e op hys ic ist
D evelopm en tM an ager
C hr is L eG a lla is
V ic e P res iden tLan d
P res iden t
Summary
This section framed how the study was conducted using a contextual design
developed by Huberman and Miles (1994) for qualitative research design. The design
provided an organizing framework for the collection of the data and enabled the
research to be more structured. A comprehensive investigation of the factors
influencing the adoption or rejection of a new information technology by a small firm
was completed. Additionally, this section discussed the reliability and validity
assumptions used in this research, and specified how the analysis triangulated the
various sources, financial reports, and respondent interviews.
The section explained how the research process can be replicated and how to
identify the factors influencing the adoption or rejection of a new information
technology in a small firm. The next section will operationalize the study's
methodological design, analyze the data, and present conclusions and
recommendations.
CHAPTER IV
Case Analysis Adoption/Trialability
This chapter analyses of each of the ten case studies. The data collected for
each case were categorized using the taxonomy put forth by Hackett, Mirvis and Sales
(1991). These constructs included market opportunities, requirements and problems,
knowledge development and user motivation, technology variables, and the decision-
making process. Probe Exploration, Trinity Energy, Petrel Robertson, Canadian
Petroleum and Star Oil and Gas were the five case studies involving adoption. Four of
the companies had users to whom the innovation was demonstrated and who
subsequently rented the portable digitizer for a short period of time before the
innovation was actually purchased. Case #5 (Star Oil and Gas) did not rent the portable
digitizer, but purchased the innovation the day after the demonstration. Table 8
outlines the firms which had a demonstration of the innovation, how long the
innovation was rented, and the date of purchase of the portable digitizer.
Table 8: Case Analysis Trialability/Adoption
Case # Company Demonstration Rented Purchased
#1 Probe Demo 6 weeks Nov. 6th /97#2 Trinity Demo 3 weeks Feb. 15th /98#3 Petrel Robertson Demo 6 weeks Mar. 25th /98#4 Canadian Demo 2 weeks June 8th /98#5 Star Oil and Gas Demo No Rental Apr. 3rd /98
CASE STUDY # 1- ADOPTION - Probe Exploration
Corporate Profile: Probe Exploration Incorporated is a public exploration and development company based in Calgary, Alberta. The Company’s activities are focused on oil and gas exploration and production in high reward areas in central Alberta and southern Saskatchewan. Following a change in Probe’s management team in 1993, the Company’s net asset value increased from $1.0 million to almost $75 million and total annual revenues grew from $621,447 to an estimated $13,540,000 for 1997. The number of operating areas has been consolidated from over 50 to five company-operated core areas, and average working interest has increased from less than 10% to between 75% and 100%.
According to Probe’s 1997 Investor Relations Update, the firm's technical strength has been improved and new technical programs have been applied to key development properties to establish substantial oil and gas revenue. Due to prudent development and resulting stable cash flow, Probe will be able to internally fund future exploration of its 86,000-acre land position. Probe’s production and reserve profile is weighted approximately 56% in favor of light oil, 16% heavy oil and 28% natural gas. Building on the successes of 1995, which included increasing the value of its asset base by 146% to $38.8 million and quadrupling production from 93 to 420 BOEDF, Probe has continued to improve all aspects of its operations. Significant highlights include the discovery of 6 new pools, improvements in the quality core area land, increases in production from 420 BOED in 1996 to 860 BOED current and increase in oil and gas revenues by 97%.
Market Opportunities: The adoption of the innovation by Probe Exploration is framed within the context of Hackett, Mirvis and Sales' (1991) technology innovation process. Excellent market opportunities for Probe Exploration resulted in a stable cash flow. Since the company's financial position was secure, new technical
programs were implemented throughout the organizations operations. An increase in net assets combined with a stable cash flow allowed the organization to increase the production of oil, which also increased the firm's revenue. Greater revenue enabled the company to increase exploration, which led to even more new discoveries. Greater revenues also enabled the organization to consolidate existing properties, which increased efficiency in production.
Requirements and Problems: At this point in the organization’s growth, the Vice President and user began experiencing problems meeting certain requirements. Specifically, he was faced with several new projects involving the drilling of wells at the Kitscoty and Leduc sites. The Vice President recognized a 'performance gap' between actual and desired results. In order to continue desired exploration and growth, the actual calculation of volumetrics had to be performed more efficiently to determine how much oil potential could be extracted from new wells. If new wells could not be drilled, the company would miss the opportunity for further expansion and development in a highly competitive marketplace.
The Vice President had in the past outsourced most of the work dealing with volumetrics. Outsourcing was expensive and time-consuming. He needed to reduce the time to tabulate intricate volumetric calculations. He also required more in-house control over volumetric calculations, and needed to reduce the time spent waiting for outsourced information to be returned. He also wanted to reduce costly outsourcing fees. The portable digitizer could meet these requirements and solve these problems. Companies that know how to apply the portable digitizer to the problems at hand will be more likely to adopt the new technology.
Knowledge Development: The Vice President and user, Mr. Barrie Wright, had a long history of knowledge development, leading up to the adoption of the innovation. The Vice President and user, Mr. Wright had come up through the ranks using traditional hand-drawn calculations. A colleague demonstrated the prototype of the innovation to Mr. Wright. Mr. Wright was impressed with the prototype. Mr. Wright then changed companies, to work in the exploration department at a firm named Fletcher Challenge. Fletcher Challenge bought the prototype in 1990, and the actual portable digitizer in 1991. In short, Mr. Wright had used both the prototype and the actual innovation, previous to being hired as the Vice President of Probe Exploration. Once hired by Probe, Mr. Wright rented the innovation for six weeks before he decided to purchase the innovation. Users who have used the prototype (The Ruler) will be more likely to find the 'portable digitizer' compatible with their past experiences and needs, thereby enhancing the likelihood of trialability and adoption.
Technology: The Vice President and user, Mr. Barrie Wright, discovered that
the portable digitizer could solve the problem of completing large tasks by
compressing 10-15 days of work into one to two days. The portable digitizer, according to Mr. Wright was easier to use when digitizing large maps. The respondent found the flexibility of the innovation to be extremely advantageous. He could capture geological data, digitize, modify and manipulate large amounts of information to produce volumetric calculations. Another relative advantage was that the digitizer was portable and could be transported out of the office and into the field. The innovation improved the quality of Mr. Wright's work. The more amenable to demonstration the portable digitizer is, and the more visible the perceived advantages are, the more likely it is to be adopted by end-users.
Decision-Making: The Vice President was faced with a new market opportunity to explore and develop two new wells. This new project forced him to solve specific problems, including reducing expensive outsourcing costs and rental costs for the portable digitizer. The Vice President had previous knowledge of both the prototype and the innovation and rented the portable digitizer for a six-week rental period (at $1,000 dollars per month, for a total rental of $1,500). Soon afterward, Mr. Wright realized he needed to use the innovation for another 30 days. At that point, he decided to purchase the portable digitizer instead of incurring another set of rental fees. He bought the portable digitizer hardware and the volumetric software package for about $3,500. He claims this was not a large capital outlay for a new technology in the oil and gas sector. The longer a new technology is rented, the more likelihood users will become more knowledgeable about the innovation's relative advantages and the more likely adoption. The decision-making process was rapid and unencumbered. Although Probe Exploration Incorporated has a very typical organizational hierarchy involving six tiers of management, the fact that the user was the Vice President facilitated rapid authorization to purchase the innovation.
Summary: The swift decision-making process reflected a hands-on management style where the Vice President worked in the office and the field using the innovation to its maximum potential.
CASE STUDY # 2- ADOPTION - Trinity Energy
Corporate Profile: Trinity Energy Limited is a privately owned oil and gas company. According to Trinity's 1997 Property Disposition, the firm owns the P&NG rights and maintains a 100% working interest in the majority of 23 sections of land in the Loydminister region. Exploration and development activity has led to the acquisition of 105 miles of 2D and 8.5 square miles of 3D geophysical data, and to the drilling of 33 wells. Successful development drilling, facility construction, and field optimization have resulted in significant increases in production from 150 BOPD to
950 BOPD of the Silverdale property. The discovery of 79.2 MMSTB OOIP in thick oil sands in the Edam area was the basis for construction of a single well pilot. Exploratory drilling in Furness and development activity in Hillmond have resulted in oil production of 145 BOPD and 170 BOPD respectively. Total production from the above properties is 1560 BOPD and 640 MCF/D gas.
1996 Highlights: Trinity Energy sold its interest in several significant oil and gas producing properties. The offer consisted of six properties: Silverdale, Furness, Edam, Hillmond, Big Gully, and Landrose, all of which are located within 60 miles of Loydminister. The majority of the properties were at 100% working interest and were all operated by Trinity. The production of the six properties totaled 1560 BOPD and 640 MCF/D gas. The closing date for the purchase March 1, 1997, has left Trinity Energy with no existing properties under operation. The company is looking to acquire new sections in the near future. Operational updates include projects sold at Furness, Silverdale Wag, Edam South, Hillmond, Big Gullu, and Landrose.
Market Opportunities: Trinity Energy had strategically placed itself within the market place, seizing various opportunities to increase production, acquire new properties, and develop 33 new wells. The increase in development drilling precipitated a need to construct new facilities, which resulted in further field optimization, and more exploratory drilling. The company was in strong need of more sophisticated digitizing capabilities to keep up with the requirements of these new projects. As soon as these properties were developed successfully, the President sold all of the company's six properties. The sale resulted in a substantial cash flow, which was put toward purchasing new technology.
Requirements and Problems: The determining factor to adopt the innovation at Trinity Energy was to meet a requirement problem. The first factor favoring adoption was the need to solve a problem. The employee with the most digitizing experience had recently left the company. When that key employee quit the organization, the remaining workers were left without digitizing capabilities. Companies that know how to apply the portable digitizer to the problems at hand will be more likely to adopt the new technology. The problem of lost digitizing capabilities and expertise was followed by a strong second factor; a requirement problem.
Employees at Trinity Energy wanted the innovation to move data between different systems. GeoTechnician Kim Russell wanted to digitize log traces and move data into other software packages like Geoscout and Kingdom 2D3D, which her supervisor, Geophysicist Dave Thomas used. End users must be educable in the new processes involved in using the portable digitizer and see some benefit accruing to them if they and their companies are to gain full advantage of the new technology.
The need to move data between systems combined with lost digitizing
capabilities and the need to digitize, coalescing the employees to make a recommendation to purchase the portable digitizer. Even though problems persisted with the computer crashing and the fear of software redundancy and obsolescence, the need to upgrade existing software was a strong factor influencing the adoption process.
Knowledge Development: The two champions recommending purchase of the innovation had sufficient knowledge to realize the portable digitizer had better digitizing capabilities than other technologies. Both champions had used traditional technologies which had proven to be tiresome and cumbersome. The two champions, Geotechnician Kim Rusell and Geophysicist David Thomas had also both used the prototype. Users who have used the prototype (The Ruler) of the portable digitizer will be more likely to find the portable digitizer compatiblewith their past experiences and needs, thereby enhancing the likelihood of its trialability and adoption. GeoTechnican Kim Russell had used the prototype 'The 'Ruler', once or twice in 1992 or 1993. Geophysicist David Thomas also had pre-existing knowledge of the prototype from a demonstration by a colleague. Both the GeoTechnican Kim Russell and Geophysicist David Thomas were motivated to upgrade to the portable digitizer when their colleague left the office and all of their digitizing capabilities were lost.
Technology: The need to digitize information was a strong variable influencing adoption. The innovation was rented for a three-week period to determine if pre-existing data could be digitized and transferred into other software packages to be shared by co-workers. The longer a new technology is rented, the more likelihood users will become knowledgeable about the innovation's relative advantages and the more likely adoption. Better digitizing capabilities and greater digitizing potential were strong factors in making a recommendation to the President to adopt the portable digitizer. The two co-workers had also tried a competitor’s product. However, the flexibility of the innovation, ease of use, utility and simplicity of the portable digitizer were secondary variables, which made the innovation attractive to adopt. The more amenable to demonstration the portable digitizer is, and the more visible its perceived advantages are, the more likely is is to be adopted by end-users.
Decision-Making: The two employees, GeoTecnician Kim Russell and Geophysicist David Thomas championed the portable digitizer and made recommendations to the President of Trinity Energy to adopt the innovation. (The two champions were hesitant to recommend the innovation to the President, based on what was considered to be 'poor technology purchases', made in the past). To avoid making another 'poor technology purchase', the two champions tried a competitor's innovation as a type of insurance or check against buying an innovation that would prove to be 'useless'. The two employees then made two separate recommendations to purchase the innovation. The champions successfully demonstrated a need to 'upgrade' the
company’s antiquated technology. The company’s President, Michael Heier, had in the past bought the wrong technology and had been bamboozled by aggressive vendors. He had also misestimated the performance and price of technology in the past, and needed strong evidence from his employees to adopt the portable digitizer. The President was finally convinced of the relative advantage of the technology and was ultimately the person who decided to purchase the innovation.
CASE STUDY # 3 - ADOPTION - Petrel Robertson
Corporate Profile: Petrel Robertson is a privately owned company and an affiliate of the Robertson Group. According to the firms 1997 Exploration Proposals, the company consultants in the oil and gas sector specializing in acquisition, processing and interpretation. The employee base of 27 includes five geophysicists, who were interviewed for this case study. The five geophysicists have extensive experience in the custom design and supervision of land-based vibroseis and dynamite seismic acquisition. The five also have expertise in coordinating 3D seismic, VSP and gravity surveys.
Petrel Robertson operates seismic data processing facilities in Denver and Calgary. In addition to high standard conventional processing, the company has developed software for seismic inversion, inverse Q-filtering, Tau-p multiple suppression and surface consistent deconvolution.
Petrel Robertson’s staff of professional geophysicists and geologists have extensive interpretation experience in western Canada, the Canadian frontiers and internationally. The integration of geophysics and geology is the foundation of the company’s approach to exploration.
Economic Opportunities: According to the President, Michael Doyle, a new
international project in the oil fields of Mexico was a strong factor for adopting the innovation. The portable digitizer was needed to meet the client’s expectations. A 'performance gap' between actual and desired results involving competitors' practices, missed opportunities in the marketplace, or unmet customer expectations will most likely motivate companies to adopt the portable digitizer. The need for technical services by a new client for a new international project was a strong factor influencing the adoption process.
Requirements and Problems: The innovation solved some of the problems experienced by the team of 27 geologists and geophysicists at the firm Petrel Robertson. The portable digitizer was flexible and instrumental in gaining operational control over the labor-intensive work of contour mapping. The determining factor for the decision of the firm to adopt the innovation was to meet a requirement problem.
The organization had a digitizing tablet, which failed to function, and could not be repaired by the Senior Geophysicist. In addition, there existed, within the marketplace, an economic opportunity to provide technical services for a new international project. The innovation was essential in meeting the requirements of this project. The portable digitizer also generated a higher quality product, which satisfied the new client's expectations. Companies that know how to apply the portable digitizer to the problems at hand will be more likely to adopt the new technology.
At the start of the new project, the Geophysicists in the firm went without digitizing capabilities and outsourced their digitizing needs with DigiTech. In September 1996, digitizing requirements became more pressing for some projects that had deadlines in December. Senior Geophysicist, Florence Reynolds concurred that outsourcing was not a solution to the firm's requirements. Outsourcing was too costly, took too much time and did not encourage in-house control over mapping products. Senior management did not favor outsourcing because of the expense involved. Some of the other pre-existing requirements of the users in the firm were the need to save time and move data between systems. The President Michael Doyle approved the purchase of the portable digitizer to eliminate continual bottlenecks in the firm's operational flow. The solution to meet multiple requirements was to purchase the innovation.
Knowledge Development: The 27 geologists and geophysicists working at Petrel Robertson had, over time, developed knowledge about the innovation and the accompanying software. Two employees personally championed the innovation, while two other employees had used the prototype and had worked with some of the more traditional technologies, such as the digitizing tablet. The innovation, over the course of several years, was at different times demonstrated to almost everyone at the firm of Petrel Robertson. One geologist had seen the prototype demonstrated by the inventor. Other employees had seen the innovation demonstrated by a colleague or at a national convention. Two employees personally championed the technology. One of the senior geophysicists in particular, Florence Reynolds, was very knowledgeable about the innovation and its predecessor, the prototype, and vigorously championed the innovation. End users must be educable in the new processes involved in using the portable digitizer and see some benefit accruing to them if they and their companies are to gain full advantage of the new technology. In addition, the Manager of Geophysics, Arezki Loughlissen, had a problem with a project in North Eastern Alberta. He needed some digits to make synthetics. He could not find the digits for the area. There were two ways in which he could solve that particular problem: either outsource the work to DigiTech or do it in house. It was more cost effective and more autonomous to digitize in-house. Users also have greater control over the product if it is digitized in-house. The manager was motivated to learn how to use the portable digitizer to save time. The manager was able to digitize what he needed in 30 minutes.
Technology: The digitizing function of the portable digitizer was the main technology variable influencing the adoption process, especially in the International arena where most of the geological and geophysical data exist in analog form. The innovation had the relative advantage of being portable. It appeared to be compatible with four of the users' backgrounds and knowledge of geophysical software applications, and it enhanced product reliability through the nuances of digitized information. The innovation's unique 'portability', was especially critical in terms of securing consulting projects in the international oil and gas exploration and development field. All four respondents agreed that it was more flexible and more efficient to use information converted into digital form. The more amenable to demonstration the portable digitizer is, and the more visible its [perceived advantages are, the more likely it is to be adopted by end-users. The innovation also provided the user with a higher quality product. Improvements to the quality of work, the portability aspect, improved performance, time benefits, and cost savings from reduced outsourcing costs, were the secondary technology factors influencing adoption. The innovation was rented for six weeks. The longer a new technology is rented, the more liklihood users will become more knowledgeable about the innovation's relative advantages, and the more likely adoption.
Decision-Making: The cost of adopting new technology is a real barrier for smaller enterprises. Senior Geophysicist, Tim Pontin, said small consulting companies are very frugal with money for new technology. Smaller firms must be able to afford to pay off equipment/technology purchases as fast as possible. Projects must be acquired before new technology acquisitions are approved. The President, Mike Doyle, had just lost $600,000 dollars on a project in Mexico, and was not inclined to spend any extra funds. However, Manager Arezki Loughlissen went through a rational championing process indicating a need for the innovation.
End-users tend to be so overwhelmed with the tasks at hand that many do not have the additional time required to convince upper management for software/hardware upgrades. Numerous recommendations were made to the company President and Chief Executive Officer, Michael Doyle, before the purchase of the innovation and its accompanying software package was approved. It took six months to gain approval to purchase the innovation. Due to the highly structured and multi-tiered company hierarchy, the decision to adopt was extremely complex, making the decision to purchase the innovation a difficult process.
This adoption case study is an anomaly in that the decision to recommend adoption took a protracted amount of time (i.e. six months). This participative championing process involved Senior Geophysicist Florence Reynolds, Senior Geophysicist Erwin Unger and the Manager of Geophysicists, Arezki Loughlissen asking President and CEO Michael Doyle to approve the purchase of the innovation. The President wanted repeated justification for the purchase. Due to the President's
hesitancy, the manager, Arezki Loughlissen spent several months building a coalition of approval in a participative championing process to gain support from two other middle managers, geologist Gerry Ransin and laboratory manager Robert Gardner. The factors influencing the decision to adopt included the need to reduce out-sourcing costs, and the need to have greater in-house control over mapping products. The compression of work time was another important factor influencing adoption. Even though six separate recommendations were made to purchase the innovation, five employees had to demonstrate a need for the portable digitizer and that the innovation was capable of performing multiple tasks by multiple users. The need to upgrade and reduce costs ultimately convinced the President to purchase the innovation.
CASE STUDY # 4 - ADOPTION - Canadian Petroleum Engineering
Corporate Profile: Canadian Petroleum Engineering Inc. is a private firm providing custom consulting services to the oil and gas industry. According to the firm's 1997 Profile Report, CPE provides a comprehensive range of integrated technical and management services. It utilizes its systems for the identification of business opportunities for the acquisition and development of undeveloped and underdeveloped oil and gas properties.
It has Canadian and worldwide experience in project management engineering, geology, geophysics, drilling engineering and management, land management, and facilities engineering, both on-shore and off-shore. CPE provides fully integrated “quick look” evaluations to scope and screen acquisition targets and disposition packages. It can also provide detailed engineering, geological reservoir analysis and independent engineering reserve reports.
1997 Highlights: Canadian High Arctic and Alaskan Offshore island exploration projects. Canadian East Coast Offshore exploration and drilling on the Grand Banks,
Labrador Shelf and Sable Island Western Canadian Conventional Operations North Sea exploration and development drilling China development and project design of a heavy oil field in Northern China Russian production enhancement projects Albania oil and gas development opportunities Peru drilling, operations and production management
Market Opportunities: A new international project prompted President Ron Bray to search for and to adopt a new technology to solve some of the problems the
company was facing. Mr. Bray had started to work on one specific project requiring volumetrics and mapping in Russia. CPE provides a comprehensive range of integrated technical and management services, and the Russian production enhancement project was identified by the President as an excellent business opportunity for the development of an international oil and gas property. A “performance gap” between actual and desired results involving competitors’ practices, missed opportunities in the marketplace, or unmet customer expectations will most likely motivate companies to adopt the portable digitizer.
Requirements and Problems: The President was very frustrated trying to digitize the Russian logs. He claimed they were very difficult to digitize because they went off scale a lot, in part because the Russians still used traditional techniques from the 50’s’ and 60's. The President Ron Bray was impressed by how the portable digitizer could manipulate off scale linear information. The President wanted more operational control over the company's technical analysis of projects requiring volumetrics and mapping. Companies that know how to apply the portable digitizer to the problems at hand will be more likely to adopt the new technology. The innovation produced higher quality maps in-house, avoiding the need to outsource which, according to the President was expensive, and time consuming. End users must be educable in the new processes involved in using the portable digitizer and see some benefit accruing to them if they and their companies are to gain full advantage of the new technology. Gaining control over work procedures and product, and the need to save time were also strong variables influencing the adoption process.
Knowledge Development: The President and user championed the innovation within the company to his other colleagues. The President was familiar with some of the traditional technologies, which he found to be very cumbersome. The President had also used 'The Ruler', and when the innovation was demonstrated to him by a colleague and by the vendor, he decided to try the portable digitizer. There was a very short trialability period in which the innovation was rented for two weeks. The longer a new technology is rented, the more likelihood users will become more knowledgeable about the innovation's relative advantages and the more likely an adoption.
Technology: Product enhancement, a higher level of accuracy, reliability and enhancing CPE's image in the international market through a professional- looking product, were important variables in the decision to adopt the innovation. The President was impressed with the portability, utility and simplicity of the innovation. The more amenable to demonstration the portable digitizer is, and the more visible its perceived advantages are, the more likely it is to be adopted by end-users.
The need to capture information in digital form, better capabilities, greater
digitizing potential, along with the innovation's utility and simplicity, were strong factors influencing the adoption process. Enhanced product reliability and higher accuracy were also variables influencing adoption.
Decision-Making: Incentives to adopt were partly image and partly technological. The decision to adopt was based on the need to stimulate future business strategies to expand into international markets. The requirements of portability, greater control over in house work, production of cheaper and faster products by speeding up information and seismic processing, and reduction of time needed all helped to eliminate bottlenecks in proceeding with oil exploration and improved meeting on-time deadlines. The innovation also enhanced product reliability by digitizing information, generated a higher accuracy level and resulted in increased economy by transferring analog information to a digital format. The perception that a company's usage of the portable digitizer enhances an individuals or company's image is positively related to the adoption of the portable digitizer. The company's usage of the portable digitizer enhanced the company's image by creating a more professional-looking product in the international market. Gains in control by providing more accurate calculations, eliminating bottlenecks in processing maps, reducing time and meeting deadlines along with increased productivity and increased quality were all strong factors influencing adoption.
CASE STUDY # 5 - ADOPTION - Star Oil and Gas
Corporate Profile: According to the 1997 Star Oil and Gas Annual Report, this private company accelerated its strategic goal of becoming a more integrated and more diversified company. This was achieved through a significant purchase of oil and gas properties. The company made the single largest acquisition in its history by purchasing producing assets and land from British Petroleum in Western Canada in 1990. The acquisition accelerated the company’s emphasis on oil and gas development within a framework of a total commitment to the energy industry.
Market Opportunities: Economic opportunities and land acquisitions accelerated the company’s emphasis on oil and gas development. A new project, stemming from new land acquisitions, and development drilling required special data analysis. A “performance gap” between actual and desired results involving competitors’ practices, missed opportunities in the marketplace, or unmet customer expectations will most likely motivate companies to adopt the portable digitizer.
Requirements and Problems: Generally, the company would outsource work;
however, since this new project required special data analysis, the traditional tools used by the head geologist Ken Hale were not accurate enough and too time consuming. The portable digitizer enabled geologist Ken Hale to directly calculate volumetrics from a pay map rather than to do hand calculations. Instead of outsourcing the work which would have taken two days it could now be completed in house within two hours. Companies that know how to apply the portable digitizer to the problems at hand will be more likely to adopt the new technology. A new project prevented outsourcing the work. Time requirements, cost and the need for greater in-house control over the product along, with greater efficiency, were all strong factors in the process to adopt.
Knowledge Development: Geologist Ken Hale had just completed another project where a consultant had used the innovation. Ken Hale was now faced with a new project and felt that the innovation was a new technology that would help him complete the tasks for which he was responsible. He was therefore anxious to learn more about the innovation. He called the vendor, who gave him a demonstration of the portable digitizer, and the innovation was purchased the next day. The more amenable to demonstration the portable digitizer is, and the more visible its perceived advantages are, the more likely it is to be adopted by end-users. The chief user saw the innovation demonstrated by a colleague and the vendor before deciding to adopt the innovation.
Technology: The geologist Ken Hale was impressed with the portable digitizer's digitizing capabilities, reliability and accuracy. Greater efficiency, less time, less expense and great control over in-house production, thereby eliminating outsourcing costs, were important secondary variables in the decision to adopt the innovation. The innovation helped to speed up information and seismic processing, reducing time and improving the likelyhood of meeting deadlines. The portable digitizer also enhanced product reliability by digitizing information and generating a higher level of accuracy. Gains in flexibility such as the transferring of analog data into a digitized form allowed geophysical and geological activities to be done immediately in a digital environment. End users must be educable in the new processes involved in using the portable digitizer and see some benefit accruing to them if they and their companies are to gain full advantage of the new technology. It is interesting to note that the champion, geologist Ken Hale, felt that one of the advantages of adopting the innovation was not only gaining control of the completion of various tasks, but that it allowed him to acquire the knowledge of how to use the portable digitizer. Using the innovation allowed Ken Hale to feel more 'enabled' in performing tasks. It also heightened his visibility or image in the company as a competent technology user who could learn and use a wide range of software and hardware equipment. The perception that a company's usage of the portable digitizer enhances an individual’s image is
positively related to the adoption of the portable digitizer.
Decision-Making: Meeting requirements and solving problems were the factors precipitating the decision to adopt along with the relative advantage of using the innovation. The decision to adopt was very rapid and followed the sequences of the rational championing process. Two geologists, Ken Hale and Dave Iverson recommended purchasing the portable digitizer. The new project and demonstrating a need were sufficient requirements for the Vice President to purchase the portable digitizer the very next day.
Case Analysis Discontinuance/Rejection
This section deals with the analysis of the five case studies examined for
rejection or discontinuance of the innovation. The data collected for each case were
categorized following the taxonomy put forward by Hackett, Mirvis and Sales (1991).
These constructs included market opportunities, requirements and problems,
knowledge development and user motivation, technology variables and the decision-
making process. Founders, Capella, Jordan, Summit and Pan East were the five case
studies illuminating discontinuance, rejection or passive rejection. Of the five rejection
cases, two firms, Case #7 Capella and Case #10 Pan East Petroleum had rented the
innovation for 4 weeks before discontinuance occurred. Case #10 was an anomaly in
that the user had expectations of re-inventing the software and customizing it to meet
certain requirements and solve problems. Table 9 displays which firms received a
demonstration of the innovation and if there was a rental period.
Table 9: Case Analysis Discontinuance/Rejection
Case # Company Demonstrated Rented Purchased
#6 Founders Demo No Rental Rejection#7 Capella Demo 4 Weeks Discontinued#8 Jordan No Demo No Rental Rejection#9 Summit No Demo No Rental Rejection#10 Pan East Demo 4 weeks Discontinued
CASE STUDY # 6 - REJECTION - Founders
Corporate Profile: Founders Energy is a public company employing approximately 14 employees. According to Founders 1997 Annual Report, the company's strategy was participating in low-risk horizontal drilling, combined with the pursuit of quality, non-competitive acquisition or merger opportunities, resulting in significant growth in production, reserves, cash flow and earnings.
1997 Highlights: Increased daily production by over 1,000 percent; Increased gross revenue by more than 1,400 percent; Achieved cash flow of $2.2 million or $0.16 per share; Increased proven reserves by more than 800 percent; Increased net asset value per share to $1.40 in 1996 from $0.27 in 1995; Finished 1997 with daily average production of 1,250 Boed; Added several key people to the Founders technical and management team.
Market Opportunities: Founders completed the joint acquisition and subsequent rationalization of the southeastern Saskatchewan assets of Reserve Royalty Corporation. As a result, the company now operates and has a high working interest in four key properties located at Hartaven, Wier Hill, Benson East and Hume. The transaction resulted in Founders acquiring 682 Mbbl of proven oil reserves for a net acquisition cost of $0.71 per Boe. In December of 1996, Founders completed the acquisition of Golden Energy Ltd. by way of amalgamation, resulting in an increase of more than 600 Boed of production and 1,925 Mboe of proven reserves. The acquired reserves also increased the company's reserve life index from six years to more than eight years, however, this company did not reveal any “performance gaps” between actual and desired results involving competitors’ practices, missed opportunities in the marketplace, or unmet customer expectations motivating the company to adopt the portable digitizer. Founders has concentrated most of its energy on drilling, and has
been looking for market opportunities in terms of merging or acquiring new oil and gas companies. This has led to higher production and reserves, and even cash flow. It is worth noting that there were no 'perceived needs' for new technology, perhaps due to the fact that when companies merge, new technology can be acquired through the merger.
Requirements and Problems: The firm depended on outsourcing for 3D seismic interpretation. Users were therefore not ‘searching’ for a better way to fulfill work requirements. The vendor just happened to demonstrate the innovation as part of his routine of contacting oil and gas firms, in the hope of being given an opportunity to demonstrate and sell the innovation. Potential users in the company were not interested in the innovation after the demonstration phase. Users also seemed frustrated in terms of time requirements. Many confessed they had 'no time to learn' about the new technology, in part, because they were spending laborious hours completing required tasks using traditional methods.
The users 'perceived' the innovation as being too 'complex'. Problems associated with ‘complexity’, ‘compatibility’ and ‘relative advantage’ were important factors in the users deciding to reject the innovation. The more complex the portable digitizer is perceived by the end user, relative to available alternatives, the more likely it will be rejected or discontinued. The company outsourced a lot of its digitizing needs. Users complained about the lack time to learn and about the lack of consistency among the data shared by fellow colleagues. They also complained about the limitations imposed on them by using other traditional methods. It appeared that none of the users had 'searched' for a better way of completing required tasks or had any time to learn about the innovation, even though one user admitted that the innovation seemed to be a ‘powerful’ tool.
Knowledge Development: The Vice President of Exploration was familiar with using traditional hand drawn methods and was not enamoured with ‘The Rat’, nor with its accompanying software package, GEOCAD. His perceptions seemed to influence the other two users, decreasing their motivation to try the innovation. The operator skill and the knowledge level of the three users who rejected the innovation appeared to be much lower than users who had adopted the innovation. The Vice President did not have much pre-existing knowledge about the innovation, except that the innovation had been developed locally in Calgary and was predominantly used for timing seismic sections. The end users were not educable in the new processes involved in using the portable digitizer and could not see any benefit to adopting the innovation. A demonstration by the vendor also left the users with a very poor perception of the innovation. Three employees, Vice President of Exploration Mark Oliver, Senior Geologist Tony Panalone and Senior Geophysicist Randy Musuda perceived the demonstration as the worst demonstration they had ever witnessed. The three
complained that the vendor seemed to have little operating knowledge of the software program ‘GEOCAD”, and could not explain the intricacies involved in making the product operational. The vendor left the software program and technology with the potential users for four weeks. However, the three potential users never tried or experimented with the product. According to Rogers (1995, 1983, 1971, and 1962), change agents can speed up the technology innovation decision process. This study shows that change agents and vendors can also slow down the decision-making process. Depending on the caliber of the demonstration and the credibility of the change agent, new technologies can be quickly rejected as a result of an ineffectual demonstration. Demonstration strategies can be a barrier to adoption. The users’ evaluation of the relative advantage of the innovation were negatively influenced by a poor demonstration in which there was no perception of the innovation as having any ‘relative advantage’ for the work at hand. The less amenable to demonstration the portable digitizer is, and the less visible its perceived advantages are, the more likely it is to be rejected by end-users.
Technology: Founders was an example of a small firm which rejected the innovation study because users were accustomed to using traditional hand drawn calculations for 2D seismic interpretation. When they were faced with a requirement they could not fulfill, the work was promptly out-sourced. This company did not know how to apply the portable digitizer to the problems at hand, and therefore was more likely to reject the new technology. Employees found the innovation too complicated and difficult to learn. These two variables, combined with an entrenched and embedded old technology, were strong factors influencing the rejection of the innovation.
Decision-Making: Founders was a case of outright rejection. The firm had sufficient cash flow to purchase new technology, and had hired additional employees, however, even though the vendor was persistent, the potential users never really considered adopting the portable digitizer. The factor leading to the decision to reject the innovation was primarily a poor demonstration of the innovation by the vendor. (Note **The ‘GEOCAD’ software package was an addition to pre-existing software developed by the vendor ‘DigiRule’, and the salesperson, a geologist, had not yet become proficient in using the product himself). The facts that: 1) the Vice President of Exploration was not impressed with the innovation; combined with 2) a lack of knowledge and skill by users; and 3) a poor demonstration by the vendor, seemed to be the biggest factors in users rejecting the innovation. These three factors, combined with a lack of in-house championing had a deleterious effect on users' adoption of the new technology. One last factor in influencing users to reject the technology was the lack of vendor support. Since the vendor had trouble displaying adequate knowledge and skill in using the new technology, it seemed obvious that vendor support would not be
forthcoming. By the time the vendor came around a second time to see if any of the three users had ‘tried’ the innovation, it had already been rejected.
Summary: This small oil and gas company probably would have adopted the innovation and its accompanying software package, if the users had been more impressed with the vendor's demonstration of the new technology. The small firm had sufficient cash flow to purchase the innovation, new employees had recently been hired to increase the firm’s workforce and reduce workload requirements and tasks. The vendor was perceived as being quite persistent in pushing the technology. However, a lasting negative 'perception' of the innovation by the Vice President of Exploration, and his influence over sub-ordinates combined with a poor demonstration by the vendor, and lack of vendor technical support caused the innovation to be rejected.
CASE STUDY # 7 - DISCONTINUANCE - Capella Exploration
Corporate Profile: Capella Exploration is a fairly new company. It was founded in 1994 by five consultants who decided to offer geographic surface information to oil and gas companies. According to the firm's 1997 Annual Report, the company offers custom processing services along with custom software development and data management.
1996- 1997 Highlights: For companies committed to in-house processing and seismic data management support, Capella Exploration offered a full range of new software that had been developed in 1997.
CAPSEIS which is a full-featured seismic survey processing suite of applications CAPMAP which is a CAD style mapping application to plot SEG and other
coordinate data CAPSEG which is the industry standard SEG file manager CAPEO to coordinate transformation needs CAPP which is a PPDM compliant seismic inventory system providing graphical
access to dataset CAPWELL provides information about wells CAPPIPE which is a pipeline manager CAPLAND which is a comprehensive land manager CAPGIS which is Capella’s flagship product. It is a GIS specifically targeted to the
needs of the exploration industry. CAPGIS includes well, pipeline, and land modules.
Market Opportunities: Capella Exploration was faced with new projects and
clients seeking advice about in-house processing and seismic data management support. The Vice President of Surveying and Mapping, Doug Phillips, recognized a 'performance gap' between actual and desired results involving competitors’ practices and missed opportunities in the marketplace, in addition to not meeting customer expectations. He was therefore motivated to try the portable digitizer. Capella had no cash flow at all. The firm was trying to establish itself as a consulting firm that processed services, customized software and managed data for other small oil and gas firms more focused in the areas of exploration and drilling.
Requirements and Problems: The Vice President of Surveying and Mapping had become increasingly frustrated with existing technology's ability to fulfill requirements and needs. Vice President Doug Phillips was using a digitizing tablet, a traditional method for digitizing maps. He knew it would be more efficient to digitize all of his geological data. In other words, he understood the value of how to apply the portable digitizer to the problems at hand. The Vice President was frustrated with embedded antiquated technology. He realized he needed to upgrade his digitizing capacities to meet client expectations. However, in order to save money, Phillips decided not to purchase the innovation nor its accompanying software. (Note ***The firm paid nine hundred dollars for the second-hand digitizing tablet versus two thousand dollars for the portable digitizer).
Requirements and the need to fulfill clients' expectations were the problems facing this firm. The problems were solved by using traditional methods and by free upgrades provided through a pre-existing contractual offer with a known vendor, thus avoiding the cost of purchasing the innovation and its accompanying software package.
Knowledge Development: The user was aware that several customized software products could help him meet his requirements. He therefore searched for, tried and compared two different products before deciding to use a software package from a competitor of the innovation. The end result was that the Vice President was very disappointed with the free upgrade from another vendor whose product had not been proven in the marketplace, and was associated with a lot of problems.
Technology: The user perceived the portable digitizer and its accompanying software as an efficient product that could provide him with a relative advantage in meeting client expectations. Most of the company's technology needs were purchased second hand. Even though the innovation seemed more versatile and offered more features, the lack of compatibility with pre-existing databases and higher cost were strong factors to discontinuance and ultimately rejection of the innovation.
Decision-Making: This case study was an example of discontinuance. The user, Vice President of Surveying and Mapping, considered adopting the innovation,
even persisting through a trialability stage. However, in the final analysis the user decided not to adopt the innovation and discontinued using the portable digitizer after a month-long trial period. The factors influencing discontinuance and ultimate rejection were time, expense and compatibility requirements. The Vice President of Surveying and Mapping did not have the time nor sufficient funds to transfer an existing database into a new digitized format in order for the data to be compatible with the new software program. The more complex the portable digitizer is perceived by the end user relative to available alternatives, the more likely it will be rejected or discontinued. The Vice President would have been more likely to adopt the innovation if the vendor had shared the cost of converting the exisiting database into a new format, compatible with the 'GEOCAD' program. The decision to discontinue was made by the Vice President of Surveying and Mapping who, adopted a new software package at not cost to the firm. This case study resembled Case #1 (Probe Exploration) and Case #4 (Canadian) in that the user was from upper management.
Summary: Throughout this body of research, it has been noted that cost is a strong deterrent for small firms adopting new technology. Without a 'new project' or 'new client' there is little cash flow to upgrade and satisfy technology requirements. Also the time it takes to try and implement new technology may cause a disruption in established work processes. In the volatile oil and gas industry, small firms often acquire new technology second hand from other small firms, which have either gone bankrupt or have had new projects and the cash flow to buy new technology.
Fiscal and time constraints can be strong deterrents to the small oil and gas firms adopting a new technology. This user, who happened to be a vice president, had the same needs, requirements and client expectations to meet as the firms adopting the innovation. However the cost and time to convert pre-existing data into a new format were sufficiently challenging to result in the discontinuance of the portable digitizer. (In retrospect, the Vice President felt he had made the wrong technology choice, was disappointed and frustrated with the alternatives after he had discontinued using the innovation, and admitted he had been bamboozled by another vendor in adopting a new technology that was not an industry standard).
CASE STUDY # 8 - REJECTION - Jordan
Corporate Profile: Jordan Petroleum Ltd. is a Calgary-based oil and gas exploration and production company operating in Western Canada. Jordan is a public company with approximately 60 employees. According to the firm's 1997 Annual Report, the company has achieved consistent, profitable growth over its ten years of history through a combination of successful drilling and acquisition activities. Jordan has built a reserve base of 18.2 million barrels of oil and 197 billion cubic feet of gas,
and its production at fiscal year-end November 30th, 1996, was 5,600 barrels of oil per day and 50 million cubic feet of gas per day.
At the time of the study, Jordan was excited about new exploration and development initiatives for which there was considerable upside potential. Jordan’s cash flow increased 89% to $14.1 million ($0.55 per share) during the first quarter of 1997, from 7.4 million ($0.34 per share) during the first quarter of 1996. Cash flow was up as a result of higher oil and gas volumes and stronger commodity prices. Net earnings increased fourfold to $4.3 million ($0.17 per share) from $1.1 million ($0.05 per share ) a year ago.
1997 Highlights: The first three months of 1997 mark the beginning of a period of growth for Jordan, enhanced by the Company’s recent acquisition of Transwest. Jordan’s financial performance reached record levels during the first quarter as a result of higher volumes and exceptionally strong prices. Operational results improved despite a limited number of wells being drilled as a result of shortages of drilling rigs and equipment. The company planned to complete its largest exploration and development program ever. It contracted additional drilling rigs and expects to accelerate its drilling activity following spring break-up. Jordan anticipated drilling approximately 130 wells in 1997. At the end of February 1997, Jordan completed the acquisition of Transwest Energy Inc. The immediate effect of this transaction was a 55% increase in Jordan’s production to 16,500 barrels of oil equivalent, balanced between oil and gas, and a substantial improvement in cash flow. These increases are not reflected in Jordan’s first quarter results. Transwest’s major properties were an excellent fit with Jordan’s, and they enhanced the Company’s portfolio of oil and gas assets. This transaction has also given rise to additional exploration and development opportunities. The Transwest acquisition was valued at $95 million after accounting for the assumption of $32.4 million in debt and preferred shares. The consideration consisted of $26.8 million in cash and the issuance of 4.7 million Jordan shares. Jordan’s outstanding shares now total 30.1 million.
Market Opportunities: Jordan drilled 25 wells during the first quarter of 1997: 11 Gas wells, nine oil wells, and five dry holes. Jordan expects a dozen wells can be drilled, with three or four wells planned in the third quarter when the northern part of the prospect is accessible. At the time of the study, Jordan was waiting for drilling to commence. There was no perception of a 'performance gap' between actual and desired results involving competitors’ practices, missed opportunities in the marketplace, or unmet customer expectations. In other words, there was little motivation for the company to adopt the portable digitizer. Jordan had acquired a new company which extended its exploration, development and production, thereby increasing cash flow. This case was similar to case #6 (Founders) in that there was no 'perceived need' for new technology, perhaps because when companies merge new
technology can be passed down through the merger.
Requirements and Problems: Users preferred to do visual estimates basically working off of a spreadsheet. They found it quicker and easier to use hand calculations than to routinely use software. All the users perceived the hardware and software of computer technology as being too costly. The senior geologists and geophysicist preferred drafting by hand and using logs on paper in analog form rather than in a digitized computerized form. There was also no requirement or problem that required a search for technology. Thus the users at Jordan Petroleum did not know how to apply the portable digitizer to the problems at hand. There were no existing requirements or problems to overcome.
Knowledge Development: One of the three top users in the firm had previous knowledge of both ‘The Rat’, and the accompanying software package ‘GEOCAD’. Senior Geophysicist Ken Stag had heard of the portable digitizer but had never tried the innovation. The other two geologists, Frank Muller and Bruce Beynon, had never heard of nor seen the innovation. Users knew they were not as technically literate nor as knowledgeable as they should be, and that they were lacking computer skills, but the feeling at the firm was unanimous in not disrupting an established comfort level where users did not perceive any real advantage to buying new information technology. Thus end users were not educable in the new processes involved in using the portable digitizer and could not see any benefit accruing to them through the use of the ‘portable digitizer. There was no user motivation, knowledge or skill regarding the innovation. Employees were accustomed to the traditional technologies that were already embedded within the organization's processes, and preferred working in analog form; also, there were no champions to push the technology into the firm.
Technology: Users were comfortable making visual estimates using spreadsheets and hand calculators. The traditional methods had been established for a long time in the firm, so that user motivation to search for a better way of doing things was non-existent. Users were content to use traditional technology and microfiche along with hand drawn calculations.
Decision-Making: Users were comfortable using established methods such as visual estimates, hand drawn calculations, spreadsheets, hand calculators and analog logs because they had always completed their work in this manner. There were no champions of new technology working at this small oil and gas firm. All users were prepared to use microfiche and to complete all required tasks the old-fashioned way, using pencils, paper and diskettes.
The decision to passively reject all new forms of new technology was uniform through a tight coalescence of geologists and geophysicists at the third level of the
organizational hierarchy. The users had no motivation to seek out new technology. If anything, the three users, the Senior Exploration Geologist, the Senior Geophysicist and the Senior Exploration Geologist all prided themselves on staying with traditional methods rather than moving into the computer age. The more complex the portable digitizer is perceived by the end user relative to available alternatives, the more likely it will be rejected or discontinued. The firm was almost technophobic about purchasing new technology and saw using digitized information as a disadvantage.
Summary: This case study was an example of rejection. Users never really considered trying or using the innovation. The senior geophysicist at Jordan Petroleum, Ken Stag, had never seen a demonstration of the innovation. He was also not interested in spending any money on technology. Using traditional methods was deeply ingrained at this small firm, and all users were comfortable in using traditional methods. This firm and its employees had also never seen the innovation demonstrated by either the vendor or by fellow colleagues. Championing and change from pre-existing work methods through the use of new technology was non-existent.
CASE STUDY # 9 - REJECTION - Summit Resources
Corporate Profile: Summit Resources Limited is a public exploration and production company based in Calgary. It has operated for 24 years in the oil and gas industry and employs approximately 60 employees. It performs work and manages oil and gas properties in four core areas: northeastern British Columbia, west central Alberta, southern Alberta and northwestern U.S./Saskatchewan. These areas provide geographic balance for the company’s exploration and development programs, as well providing a mix of light and medium oil and liquids, and natural gas.
Market Opportunities: According to the firm's 1997 Annual Report, the company’s primary objective is to create long-term shareholder value by exploring for, acquiring and developing high quality oil and gas assets. In 1996, Summit’s operations strategy resulted in the successful acquisition of properties at competitive prices and the selective drilling of high quality prospects. Summit is presently pursuing opportunities in the western Canadian Sedimentary Basin, and selected basins in the United States. Summit had acquired a new company which extended its exploration, development, drilling, seismic and production. This case was very similar to case #6 (Founders) and case #8 (Jordan) in that there was no 'perceived need' for new technology, perhaps due to the fact that when companies merge new technology can be
passed down.
Requirements and Problems: A competitor’s product, 'Photon', was used for digitizing requirements. The company was reluctant to have two systems. A new version of ‘Photon’ in the form of an upgrade was being offered free of charge by the vendor to Summit Resources as part of an ongoing maintenance package. Requirements that could not be fulfilled in-house and that could not be digitized were out-sourced. The company did not want to apply the portable digitizer to the problems at hand, and therefore rejected the new technology. This small oil and gas firm relied heavily on outsourcing, and perceived out-sourcing as saving time.
Knowledge Development: User knowledge of and skill with the innovation was extremely low at this small oil and gas firm. Users saw no inherent 'relative advantage' to search for another way of completing their required tasks. End users were not educable in the new processes involved in using the portable digitizer and did not see any benefit or advantage to trying the portable digitizer.
The Chief Geologist Jim Ross had heard about 'The Rat', and its accompanying software product 'GEOCAD' but had never seen them demonstrated. He claimed that Summit Resources was a small company, where the purchasing of technology was limited. The Chief Geologist knew that user skills and knowledge throughout the company were quite low. He was trying to update the technological skills of users, but felt he was alone in championing any new form of technology. Summit Resources had only introduced computers into the workplace during the last three years. The firm had recently hired an Information Systems person on the permanent staff. At the time of the interview, Ross claimed that the company was trying to be more innovative. Users were comfortable using traditional methods and were unaware of the innovation, as there had been no vendor demonstration. The existence of one champion was not sufficient to have the innovation adopted due to the lack of management and user support.
Technology: It appeared that users had very little motivation to search for a new technology and seemed to be satisfied using an older technology, the 'digitizing tablet'. Users saw no relative advantage to upgrading old technology.
Decision-Making: This case is another example of rejection, whereby users never considered the use of the innovation. Two technicians, geologist Janice Larsen and geophysicist Sara Simms claimed that they never considered trying either 'The Rat', or 'GEOCAD', because they were satisfied using traditional methods, the 'digitizing tablet. Neither considered switching from the tablet to be an advantage.
Once again, cost seemed to be a deterrent in renting or purchasing the innovation. Users were reluctant to duplicate technology. The existing digitizing
technology was viewed as a tool to finish required tasks. Middle managers were hesitant to request permission to purchase new technology when older technologies came with free upgrades. They were satisfied with lower level technicians using older technology. The Chief Geologist was reluctant to have two different systems in use, and was satisfied receiving free upgrades from existing vendors. At the same time the company was trying to upgrade its technology image by hiring an Information Systems Manager to streamline and improve working processes.
Summary: Time, cost and duplication of existing hardware and software seemed to be the reasons behind Summit Resources' rejection the innovation. This particular case study was something of an anomaly, however, in that it was the only small oil and gas firm to have an information systems person. This could be perhaps attributed to the fact that the company seemed to be woefully lacking in new technology and had hired an IS specialist to help introduce it into the firm. Although the Chief Geologist appeared to be in favor of upgrading, his personal championing seemed to be technology specific. He was championing ‘MetroNet’, a pipeline provider of fiber optics so that users could operate directly on line with SonaBase. MetroNet would enable the technicians to phone SonaBase, have a curve digitized, and then go through the MetroNet network to locate the data. It was expected that in three months time very little digitizing requirements would be done in house.
This small oil and gas firm was unique among all ten case studies. It appeared that the company was not interested in spending money on redundant technology, even if it was newer and improved. The 'perception' was the company would 'leapfrog' over intermediary or temporary technologies by waiting for a more effective high technology solution. The Chief Geologist, Jim Ross, recognized a “performance gap” between actual and desired results involving competitors’ practices, missed opportunities in the marketplace, and unmet customer expectations, but was waiting to adopt a newer technology than the portable digitizer. This firm is not a true laggard in the original sense of the terminology as set out by Rogers (1995). It preferred to wait for a newer technology to meet specific requirements and solve problems.
CASE STUDY # 10 -DISCONTINUANCE - Pan East Petroleum
Corporate Profile: Pan East Petroleum Corporation is an aggressive explorer of high quality natural gas reserves in Western Canada. It is a public company employing approximately 22 employees with exploration activities concentrated in the deeper carbonate rocks along the western margin of the Western Canadian Sedimentary Basin. The company's headquarters are in Calgary.
According to the firm's 1997 Annual Report, 1966 was a pivotal year for Pan East. First, Pan East became an owner in the Kaybob South No. 3 gas plant alongside
Chevron, Amoco, and Mobil. Second, the company expanded its exploration prospect inventory substantially beyond its original base at Berland River and Bigstone. By becoming an owner in K3 Pan East lowered its cost structure dramatically - operating costs dropped from $0.88/Mcfe in the first quarter of the year to around $0.30 in the fourth quarter. However, the much greater significance of the K3 interest lies in its strategic implications.
At a total rated capacity of 650 MMcf/d of raw gas, 58,000 Bbls/d of natural gas liquids, and 3,000 Tonnes/d of sulphur, K3, is the centerpiece of one of the greatest concentrations of natural gas processing in Western Canada. It is the largest, most sophisticated and most efficient facility in a potential gathering area encompassing 12,000 square miles. K3 will have an ever increasing economic influence over natural gas exploration and development in the area. Pan East's ownership in the plant thus lays the groundwork for the execution of its exploration strategy. Pan East's goal is to give the Company's shareholders a multifold increase in value.
Market Opportunities: The Company's operations in 1996 were weighted heavily toward activities other than drilling. In particular, much time and effort was spent on production facilities issues and on consolidation of the Company's interests in and around its Berland River property. During the last quarter of 1996, the Company shifted its operational emphasis in the latter part of the year back to drilling. Pan East Petroleum had acquired a new company which extended its exploration and production. Area consolidation also increased drilling, which seemed to be the main focus for the company. This case was very similar to Case #6 (Founders), Case #8 (Jordan), and Case #9 (Summit) in terms of economic strategy. However, this case study was unique in that there was a 'perceived need' for new technology.
Requirements and Problems: This case study highlights the process of discontinuance. The user considered adopting the innovation and tried the innovation, without incurring rental fees, for one month. The Development Manager was hoping the new technology could be integrated into existing systems. In this case however, the use of the innovation was discontinued, as it could not be re-invented for another purpose.
A new tool was needed to link grids and data in one mapping software package. It was hoped that through the use of ‘GEOCAD’, data could be linked to the software package AcuMap, and then transferred back into GEOCAD for analysis. Data could then be further integrated with PhotoShop or Corel Draw illustrations. In this case however, the use of the innovation was discontinued, as it could not be re-invented for another purpose. This firm had strong factors influencing adoption. Existing technology was limited, there existed a need to export data in a more useful fashion and better graphics were needed. However, in the final stages of the innovation decision process, the innovation could not be tailored and re-invented for another use,
and so the use of innovation was discontinued and it was ultimately rejected.
Knowledge Development: Frustration among users who rejected or discontinued trying to use the innovation was high. Part of this disenchantment was a direct result of the limited software available to the oil and gas sector. There are a lot of off the shelf products to choose from. The oil and gas sector is a somewhat small market in terms of supporting expensive development costs to produce new technology. The inability to combine data from different formats and the use of different software packages and tools leads to huge frustration levels. Users appeared to be more satisfied with using older proven technologies than with the prospect of spending time and money on new products, which had no obvious relative advantage. In this instance, end users were not educable in the new processes involved in using the portable digitizer and could see little benefit or advantage of adopting the new technology. Users were disappointed with the vendor for lack of technical support and were basically frustrated with the innovation because it could not be re-invented for another purpose.
Technology: The Development Manager Chris LeGallais was very frustrated
with problems arising from trying to use the software. Chris LeGallais complained that technical support was very poor. The Development Manager perceived the innovation as being too limited for specific task requirements, and felt thwarted in his attempt to re-invent the portable digitizer and its accompanying software for another purpose than that for which it was designed.
Decision-Making: Users in this case study decided to reject the innovation as a result of dissatisfaction with its performance. The innovation appeared to be inappropriate to meet the users' needs, could not be re-invented for another application or function, and did not result in a perceived relative advantage over the pre-existing technologies and techniques. The Development Manager decided against incurring the cost of purchasing the innovation for three thousand dollars, since he claimed the software was limited and could lead to further complications instead of meeting requirements and solving current problems. The more complex the portable digitizer is perceived by the end user relative to available alternatives, the more likely it will be rejected or discontinued. Cost also was an issue. However, the ultimate decision to reject was based on not being able to customize or re-invent the innovation for other purposes. Middle management ultimately recommended purchasing a competitor's product.
Summary: The company decided to purchase another software package. The Development Manager Chris LeGallais felt that GEOCAD would not meet user requirements. This case study highlights the beginning of the re-invention process.
Motivation to learn how to use the innovation waned once it was discovered that the vendor was not prepared to reinvent or change the existing interface. The decision-making process started and stopped with the Development Manager.
CHAPTER V
CROSS-CASE ANALYSIS TRIALABILITY/ADOPTION
The intent of this study was to answer the research question: "What factors
influence the adoption of the portable digitizer over time among small Canadian oil
and gas firms?" This study both confirmed and extended research on 'why' a company
seeks a new technology: whether it has the 'know-how' to apply a new technology to
the problems at hand, and whether it can overcome the many complications and
consequences of the adoption process. The dynamics of 1) market opportunities; 2)
meeting requirements and solving problems; 3) user attitudes and experiences; 4) the
state of the technology itself; and 5) the decision-making process within a supportive
organizational culture were all strong factors favoring the adoption of the innovation.
Meeting requirements and solving problems were the strongest factors influencing the
adoption of the portable digitizer among the sample of small Canadian oil and gas
firms. Some key variables influencing the adoption process remain the same. The need
to save time, internal championing to push a new technology through an organization
and the need to meet requirements and solve problems, along with upper management
support to purchase new technology, all proved to be strong factors influencing the
adoption process. Reducing costs, especially outsourcing costs, combined with the
need to upgrade were additional variables determining adoption of the portable
digitizer.
Some new key variables surfaced in this study, especially under requirements
and problems. In this fast-paced computerized world, small oil and gas firms need to
digitize analog information to merge, repackage and present geological and
geophysical data. Technology was used over time to meet the requirements of new
projects. Renting a new technology before purchasing it and previous knowledge of the
prototype along with the portability of a technology are some of the other new factors
influencing the adoption process found in this study.
The researcher employed the software package NUD*IST to conduct a
mechanical search for strings of characters and variables as outlined in the Hackett,
Miris, and Sales (1991) model. The software interface was used for heuristic purposes
to access the data, search text and to establish an independent reliability to help
identify variables. The results were used as an organizational tool to illuminate various
themes and observations which are presented in the next two cross case analysis
sections.
Market Opportunities
Exploration: Exploration rated as the highest operational measure under the
market opportunity construct and was the major focus of the five companies which
adopted the portable digitizer. Exploration, and the funding for future exploration,
appeared to be the 'performance gap' facing all five small oil and gas companies which
adopted the innovation. All five companies targeted oil and gas exploration as a
primary organizational activity and the foundation for economic opportunity.
Exploratory drilling results in potentially higher oil production for small oil and
gas companies. Most of the respondents emphasized the importance of exploration,
especially in the international market, where the innovation was extremely valuable
because of its portability. The innovation was used for exploration purposes in third
world countries where educated foreign geophysicists have knowledge, but lack
equipment. The relative advantage of the portability aspect of the innovation allowed
geologists and geophysicists to collect and digitize data right in the field.
Development: Four of the five adopting companies were heavily involved in
the development end of exploration. Key development properties had been established
by adopting companies at the time of the study. Development properties helped to
establish substantial oil and gas revenue which furthered economic opportunities.
Development properties also helped to reduce the 'performance gap' between
successful and unsuccessful oil and gas companies. Prudent development also resulted
in a stable cash flow, which enabled the four small Canadian firms to internally fund
future exploration. Development activity also led to the acquisition of more
geophysical data and well-drilling. The portable digitizer, was 'perceived' as a valuable
tool to interpret and analyze the geophysical data required for the development of oil
and gas fields. For four of the small Canadian oil and gas firms, successful
development drilling, facility construction, and field optimization resulted in
significant increases in Barrels of Oil Production per Day. (eg., Trinity Energy went
from150 BOPD to 950 BOPD with the development of the Silverdale property). At the
time of this research, four of the five adopting firms were pursuing development
opportunities in Canada and the United States and in the North Sea, China, Albania,
the former Soviet Union, Peru and Mexico.
Management: The decision-making process in small firms is governed by upper
management. In the case of small oil and gas firms, it is not unusual for a firm's
management team to change every few years. This can cause a delay in adopting a new
technology. Usually the authorization for the purchase is made by someone from upper
management: "Someone who pays the bills".
This study showed that upper management was usually comprised of middle-
aged, well-educated, males who had either a geological or geophysical background.
Two of the three senior managers interviewed knew of, had heard of, had seen the use
of, or had previously used the prototype to the innovation. Upper management was
therefore hesitant to outsource any work, knowing full well that users could be trained
to perform work-in-house with the innovation. However, upper management was also
reluctant to pay the cost of new technology. As a result, middle managers and
employees were reluctant to invest the time and energy needed to champion a new
technology. The dilemma for the end-users was having to complete daily work tasks
with little time to spare. They complained that championing took time and effort away
from completing daily tasks.
Production: Three of the five small companies which adopted the portable
digitizer focused on production in high reward areas. These areas included central
Alberta, southern Saskatchewan, Russia and Peru, where the nature and volume of
production varied. The companies which adopted the innovation had been extremely
successful in production activity during the past few years. (e.g., Probe Exploration
had quadrupled production from 93 to 420 Barrels of Oil Equivalent per Day
(BOEPD) in just one year.
Increase in production created an important economic strategy for three of the
adopting firms which were searching for future market opportunities. When the
production of oil and gas became significant, these firms had the option of selling their
oil and gas producing properties to fund the acquisition for new oil and gas producing
sections. The innovation was important to the decision-making process because it
provided quick maps outlining potential production volume. In other words, the
technology helped adopting firms to make their production operation more efficient.
For example, in Mexico three giant oil and gas fields are nearing the 15-20 year
mark. They used to produce a lot of oil. However, production has since diminished and
the fields are producing too much water. The portable digitizer proved to be a valuable
tool to analyze and process information regarding production, drilling and project
enhancement.
Drilling: Drilling is an integral part of the organizational activity of small oil
and gas firms. Drilling activities on new projects were found to be strong factors in the
innovation decision process leading to adoption. In the competitive market of oil and
gas, and with increased downsizing, geophysicists appeared to be doing all the work
investigating drilling opportunities. Ten years ago, drilling assessments were divided
between a geophysicist and a technician. Now all drilling assessments are done by a
geophysicist. The portable digitizer reduced time for geophysicists to analyze and
process drilling information. The innovation therefore saved a small firm time and cost
in drilling operations.
Market: Although the market variable was seen less frequently than other
economic variables, it appeared that the portable digitizer was a critical technology for
taking advantage of economic opportunities in the international arena. International
markets are areas of huge opportunity for small oil and gas firms and the geophysical
market has become centered on new technology involving complex software packages.
The innovation was not only advantageous when bidding for projects in foreign
countries, but it also enhanced a small firm's image by producing reliable, high quality
presentational maps of seismic and oil fields.
Assets: Three out of the five small oil and gas companies which adopted the
portable digitizer were directly involved in day-to-day exploration and development.
Securing properties to ensure continued assets was used as a strategy to maintain a
competitive edge in the market place. Assets allowed each company to expand, thereby
insuring its market share. For example, since Case #1 (Probe's) management team
changed in 1993, the Company's net asset value increased from 1.0 million to almost
75 million dollars with total revenues from $621,447 to a projected $13,540,000 for
1997. Building on the successes of 1995, which included increasing the value of its
asset base by 146% to $38.8 million and quadrupling production from 93 to 420
BOED, Probe continued to improve in all aspects of its operations. 1996 was also a
gratifying year for Star Oil and Gas. A private company, Case #5 (Star Oil and Gas)
was able to accelerate its strategic goal of being a more integrated and more diversified
company. This was done through a significant purchase of oil and gas properties. The
company made the single largest acquisition in its history by purchasing producing
assets and land from British Petroleum in Western Canada in 1990. The acquisition
accelerated the company's emphasis on oil and gas development.
Meanwhile, Case #2 (Trinity Energy) sold its interest in several significant oil
and gas producing properties in 1997. The offer consisted of six properties which were
located within 60 miles of Loydminister. The majority of the properties were at 100%
working interest and were all operated by Trinity. The production of the six properties
totalled 1560 BOPD and 640 MCF/D gas. This left Trinity Energy with no existing
assets. However, at the time of this study Trinity was hoping to acquire new assets for
future exploration, development, production and drilling opportunities.
Requirements and Problems
Digitize: The digitizing capabilities of the innovation were a strong factor for
users to adopt it. Digitization converted analog data into a common format so that
geological data, such as log traces, could be moved into other software packages. Not
only did the innovation digitize information so that it could be converted into display
maps, it also produced high quality colored presentational maps. Professional display
maps improved each firm's technical image when competing for projects. In the past,
most of the smaller firms out-sourced digitizing work to companies like DigiTech,
which specialized in digitizing geological and geophysical information. More small
firms are now moving toward in-house digitizing. It saves time, gives users more
control over the data and is less expensive. In the past, small oil and gas firms would
also hire technicians to digitize information. However, with smaller firms becoming
more competitive, these technicians have been eliminated and now the geophysicists
and geologists are required to do the work. Initially, the portable digitizer was used
domestically, but over time, it has been increasingly used for international projects to
convert analog information into a digitized format.
Time: Because of the competitive nature and economic conditions surrounding
oil and gas exploration and development, time has always been a critical factor in
securing business projects. In the past, calculations were done by hand, section by
section, which was a laborious and time consuming endeavor prone to miscalculations
and errors. A strong incentive for users to adopt the innovation was its time saving
capabilities, especially for large tasks. Bidding for projects involved demonstrating
detailed maps which could be produced quickly with the portable digitizer and its
accompanying map-producing software.
New: New technology and technical programs played an important role in the
daily production of oil and gas exploration and development. New technical programs
and new technology helped to locate oil and gas pools, and created more production
from new wells, which in turn increased profits used to purchase new sections of land
for future exploration and development. The concept of 'newness' played a large part in
factors leading up to the adoption of the portable digitizer. By shunning traditional
methods and by creating new ones for exploring, discovering and producing oil and
gas, small Canadian firms reduced their 'performance gap' and secured a competitive
edge in the market place. Adopting new technology implied a fresh approach or being
'first in the market'. This push toward adopting new technology was both market-and-
user driven. For example, the senior managers at Petrel Robertson realized that their
geophysicists and geologists were at a disadvantage using old technology because they
did not have the necessary computing power to complete required tasks. That led to a
three month period in which a substantial amount of new technology was purchased in
the form of plotter and work stations.
Project: A very important factor for the adoption of new technology among
small oil and gas firms was the bid for and awarding of projects. Oil and gas
consultants do not make money on the actual exploration, development, drilling or
production of oil and gas. Consultants only make money on individual projects, and
users of technology are assigned to work specific projects. This study showed a strong
factor leading up to the adoption of new technology by small oil and gas firms was a
new project. It appeared that a new project was the basic economic opportunity for
reducing the 'performance gap' in small oil and gas firms.
Technology: Technology played an important role in each of the adopting firm's
strategy is to meet requirements and solve problems. According to Gerstein (1987),
once 'performance gaps' are perceived, understood and accepted by decision-makers,
managers typically study what technologies are available and develop a theory as to
how a particular one will affect the organization's bottom line results. The data
collected from this research supported the theory that managers are always trying to
devise strategies to reduce their firm's 'performance gaps'. It was the perception of
these 'performance gaps' that initiated a search for a new technology to solve a
particular set of requirements or problems. Yet new technology is often seen as a
'quick fix' to enhance product reliability, and to make gains in economy, flexibility and
control. In the cases where the innovation was adopted, managers and users understood
how certain technologies improved the quality of their work and the organization's
overall effectiveness.
Data: The oil and gas market has always been data intensive. Geophysicists,
geologists, and middle and upper managers must analyze an enormous volume of
complex geophysical and geological data. Users complained that almost all of the
overseas companies had boxes of data, but not digits. Users were frustrated when
working in countries like Libya, where geologists and geophysicists had a more
relaxed attitude toward the preservation and storage of seismic data. Canadian
consultants would need copies of seismic data, but would be given only a short time to
assimilate the material. The portable digitizer was very advantageous in solving this
particular problem. Acquiring, interpreting, and successfully analyzing data in a short
time frame made the difference between success and failure in competing for and
completing new projects.
Other problems associated with data processing included: 1) moving data
between different systems; 2) acquiring data on seismic wells; 3) analyzing data from
a central processing center; 4) understanding data to create better maps; 5) taking
seismic data, which tend to be proprietary, digitizing the data, eliminating errors and
then selling the data; 6) evaluating data; 7) digitizing international data which tend to
be in an analog form; 8) altering the scales of data for charting purposes; and 9)
supplying data for government approval, bids or briefings. By digitizing data, small oil
and gas firms could predict where gas pools lay beneath large sections of land.
Digitized data also helped users and ultimately the small firms the users were working
to analyze, interpret, understand, process and control the level of exploration,
development, drilling or production of oil and gas wells.
International: Another important requirement facing small oil and gas firms
was the competition for projects in the international arena. The Canadian frontier,
which includes the High Arctic, the Grand Banks, and the Labrador Shelf plus Sable
Island still offers small oil and gas firms exploration and development opportunities.
However, the International market, is where a small firm can offer high level technical
expertise and turn a handsome profit. The innovation was adopted by two of the five
adopting firms for use in the international arena, especially in third world and
developing countries. Petrel Robertson adopted the portable digitizer for work on a
project in Mexico, while Canadian Petroleum adopted the innovation for use on
Russian logs. Other international markets requiring the services of small Canadian oil
and gas firms included North Africa, Libya, the North Sea, Northern China, Albania,
and Peru. As soon as adopting firms obtained data from these countries, it was
beneficial for them to digitize them, so they could be manipulated, displayed and
stored for future reference. Digitized data gave adopting firms a competitive edge in a
fast developing global arena.
Cost: Cost did not appear to be an issue in adopting the new innovation even
though this research showed that technology costs were closely scrutinized by upper
management. Poor experiences with past technology purchases had left small firm
owners cynical about purchasing new technology. Cost was certainly a criterion for
evaluating the adoption of new technology, but it was not one of the primary factors
influencing adoption in this study. The cost for new technology was however tied into
new projects. Adopting firms were eager to recoup their investment in new technology
as soon as possible.
Outsourcing: Outsourcing was a strong incentive for all five oil and gas firms
to adopt the innovation. In the past, small oil and gas firms would outsource work to a
digitizing company in Calgary named DigiRule. However, outsourcing was time
consuming, which increased the chance of losing a bid for a new project. It was
expensive and users and the firm both lost control over work that could have been done
in-house. For example, Trinity Energy and Canadian Petroleum did not want to
continue outsourcing work to a third party due to time constraints, while Star Oil and
Gas wanted greater in-house control.
Portability: All five small oil and gas firms that adopted the portable digitizer
agreed that the portability of the innovation played an important role in their decisions.
The Vice President of Probe Exploration bought the innovation, mainly because of its
portability. Petrel Robertson adopted the innovation for international travels in which
the portable aspect of the innovation seemed to be a great advantage. At the same time,
the Vice-President of Canadian Petroleum agreed that the portable nature of the
innovation was crucial for work he was conducting in Russia.
Upgrade: Upgrading older technology was also a requirement facing the
companies which had adopted the innovation. The need to upgrade occurred at Trinity
Energy when a colleague, who performed all of the digitizing tasks, left the office.
Meanwhile, two of the companies which had used the prototype wanted to upgrade to
the newer portable digitizer.
Knowledge Development
Champion: Champions are the individuals who make a decisive contribution to
the innovation process by: 1) actively and enthusiastically promoting the innovation; 2)
building support; 3) overcoming resistance; and 4) ensuring that the innovation is
implemented. Howell and Higgins (1990) contend that although champions pursue
different influence processes, they share common personality characteristics,
leadership behaviors, and career profiles. The authors discovered that the championing
process could be divided into three categories: 1) the rational championing process; 2)
the participate championing process; and 3) the renegade championing process. It is
interesting that in all five case studies examining the adoption of the innovation, there
existed an employee or person in upper management who supported the technology.
The strongest advocate and champion of the technology was Case #1 (Probe
Exploration) Vice President Mr. Barrie Wright. Mr. Wright convinced the new
company, which had recently hired him, to purchase the innovation. He championed
the portable digitizer as a new technology that could replace laborious, time-
consuming hand drawn work that was prone to miscalculations and errors. Mr. Wright
claimed that the portable digitizer was a useful tool in saving time, especially when
faced with large tasks. He claimed the innovation was effective in capturing
information right away. The fact that the innovation was portable also made a huge
difference while on site at oil and gas fields. Mr. Wright had previously championed
the technology to three of his previous employers: Voyager Petroleum, Fletcher
Challenge and Poco Petroleum. Mr. Wright was so impressed with the technology that
at one point he considered quitting his job as a geophysicist to set up a trade-show in
Asia for the vendor DigiRule to sell the innovation.
In Case #2, Trinity Energy Senior Manager David Thomas recommended and
championed the innovation to co-workers. In Case #3, Petrel Robertson Manager
Arezki Ioghlissen, Senior Geophysicist Florence Reynolds and Senior Geologist Irwin
Unger all championed the innovation within the organization to fellow colleagues and
to upper management. Case #4 (Canadian Petroleum) Vice President Dr. Ron Bray
single-handedly championed the technology for work involving Russian logs. Case #5,
Star Oil and Gas user Ken Hale championed the technology in such a rational fashion
that upper management agreed to buy the innovation the very next day. It appears that
the championing process and having a champion to promote a new technology within
small firms to upper management was a strong factor influencing the adoption process.
Prototype: Most of the adopters had been exposed to or had previously used the
prototype before adopting its more streamlined version, the portable digitizer. In Case
#1, champion Barrie Wright had used the prototype at both Fletcher Challenge and
Voyager Petroleum. In Case #2, champion Dave Thomas had used the prototype once
or twice in 1992 or 1993. Mr. Thomas subsequently adopted 'The Ruler' in 1994, but
found it too awkward to work with. In Case #3, champion Irwin Unger had been
exposed to the prototype abroad, while Senior Geophysicist Florence Reynolds
acquired the prototype through a merger at Westmin Resources in 1986. At the time of
data collection, Ms. Reynolds was in the process of trying to repair the damaged
prototype at her new place of employment, Petrel Robertson.
It is interesting to note that prototypes and new technology follow champions
from job to job, merger to merger. For example, in Case #3 the Senior Geologist at
Petrel Robertson, Tim Pontin, had heard about 'The Ruler' at TransCanada Pipelines in
1986. In Case #4 Canadian Petroleum Vice President Dr. Ron Bray had also tried the
prototype two years prior to adopting the portable digitizer. At each firm there was a
user who had previously seen or used the prototype prior to adopting the innovation.
Demonstrated, by Colleague or by Vendor: The demonstration plays an
important part in the innovation-decision process. At least one employee in each of the
firms that adopted the innovation had seen a demonstration of either the prototype or
of the innovation itself. In Case #1, Probe Exploration Vice President saw the portable
digitizer demonstrated by a fellow colleague. In Case #2, the champion Senior
Geologist David Thomas demonstrated the innovation to a fellow colleague. In Case
#3, champion and Senior Geophysicist Florence Reynolds saw the prototype
demonstrated by the inventor of the innovation, while her colleague and champion
Irwin Unger saw the prototype demonstrated in the Middle East. In Case #4, Canadian
Petroleum champion and V.P. Dr. Ron Bray saw the prototype demonstrated by his
brother-in-law, while in Case #5, Star Oil and Gas user Ken Hale saw the innovation
demonstrated by the vendor. In all five adoption cases, the prototype to the innovation
or the innovation itself had been demonstrated to the adopter. It is interesting to note
that only one user actually saw the innovation demonstrated at a conference.
Technologies
Usage: The tracing of the variable use or usage, through the data collected for
this research project, revealed a set of cumulative decisions that were made over time
to adopt the innovation. The potential adopters that were interviewed had strong
perceptions and memories of the innovation, over time, at different phases of the
development of the innovation. They had also used the innovation at various
companies, for different purposes. Moore and Benbasat (1991) found that it is not the
potential adopters' perceptions of the innovation itself, but rather their perceptions of
using the innovation that determined whether or not the innovation diffuses through a
population. Almost all of the users knew of a 'first user'. Most had used the technology
previously, had used an older technology (eg., the digitizing tablet) or had used the
prototype. Many of the adopters had a memory of "a lot of people using the prototype
a long time ago" or of technicians using the prototype.
Some had made the transition from using the prototype to the newer portable
digitizer. All of the adopters had clear recall of when they had first used the
innovation. The innovation itself changed over a three year period from the prototype
to the final innovation. Also, the companies changed over time as did the market,
altering the usage of the innovation itself. At first the portable digitizer was used
domestically, but within two to four years almost everything became digitized. That is
when the innovation began to be used internationally. Usage also revealed a learning
curve and how the tasks for geologists, geophysicists and technicians had changed over
time due to continual downsizing and the convergence of job requirements. Finally, all
of the users interviewed only used the innovation part-time for specific requirements
that appeared to be project driven. During the data collection of this study, the portable
digitizer was being used for seismic digitizing, for altering contour maps, for drawing
curves, for difficult analytical tasks, for digitizing sonic logs, for digitizing the location
of seismic lines and for logrithmic scaling.
Decision-Making
Need: There is a strong correlation between need and the adoption of a new
technology. The variable need is found along the entire continuum of the technology
innovation decision process Hackett, Mirvis. and Sales (1991) describe the technology
innovation process as a search for a better way to access and analyze a database or to
communicate information, leading to a 'choice' of a technology that has a promise of
improving things, followed by 'implementation' of the technology in the workplace, its
'adoption' by users, and, if everything works out, the attainment of 'desired goals' and
the 'diffusion' of the technology to other parts of a company.
The users interviewed for this research project perceived a strong need for the
innovation. Their perception was that they were at a disadvantage using old
technology. They perceived a performance gap in the quality of their work due to the
lack of computing technology available to them. All of the users interviewed had a
need to adopt the portable digitizer: 1) to get the work done; 2) to understand a lot of
data; 3) to convert interpretation into maps; 4) to construct work applications; 5) to
make synthetics; and 6) to digitize data quickly. All of the users who eventually
adopted the innovation needed a better method for completing tasks. The technology
they were using was inadequate for handing the requirements of their new projects.
These needs or requirements led users to search for a better technology and ultimately
to make a choice. All of the users interviewed tried the innovation for 4-8 weeks.
During this time period use of the innovation was implemented in routine tasks being
performed in the workplace. A trial stage combined with a championing process
helped users to attain the desired goals of purchasing new technology.
It is also interesting to note that the need for the portable digitizer to fulfil
requirements had changed over time. These changing needs reflect a changing
workplace. The prototype became useful when work stations became a reality and
people needed seismic timing to do digital formatting. During the late 80's, it was the
technicians who would attend courses to learn about new technologies. Over time, oil
and gas firms were no longer interested in expensive team work so geophysicists
became responsible for digitizing data. Geophysicists are now required to do five or six
different jobs, including processing, interpretation and computing. Technicians can
look at data using a tool, but a professional geophysicist is needed to understand and
interpret the information. Therefore, present day users of the technology have to be: 1)
versatile; 2) knowledgeable; and 3) capable of multi-tasking. Small firms cannot afford
to purchase one technology to be used by only one person to complete only one task.
The technology needs to be capable of multi-tasking by multiple users. Also, the
changing marketplace requires that new technology be able to perform different tasks
abroad, especially in international markets.
Two out of the five oil and gas companies which adopted the innovation were
heavily involved in the international market. The innovation was heralded for its use in
the international market because of its portability, reliability, digitizing capabilities,
and image. For example, users needed the portability of the innovation to digitize
topographical and geological maps in Tunisia and to digitize old maps and seismic data
in Libya in a short period of time.
Purchase and Rent: The vendor promoting and selling the innovation gave
small oil and gas firms the opportunity to rent the portable digitizer on a month-to-
month basis. Renting promoted a trial period whereby users could try the innovation
and decide whether it was a useful technology to meet requirements or solve problems.
All four companies which rented the innovation adopted the innovation after a short
trialability stage. Probe Exploration (Case #1), Trinity Energy (Case #2) and Petrel
Robertson (Case #3) rented the portable digitizer for six weeks before purchasing it
while Canadian Petroleum (Case #4) rented the innovation for four weeks before
purchasing it. Once the users realized the technology could meet specific requirements
and solve problems, most recommended adopting and purchasing the innovation
instead of incurring more rental fees. Case #5 was an anomaly. Geologist Ken Hale
was given a demonstration of the innovation on March 20, 1998. The decision to
purchase the portable digitizer was made the very next day by one of the senior
geologists.
Renting the innovation allowed users to enter a triability stage. An innovation
that can be tried represents less uncertainty for the individual or firm that is
considering it for adoption, as it is possible to learn by doing. Renting new technology
allowed the users to experiment with the technology to perform required tasks. As
shown in Table 10, this study showed that if an innovation proves to be useful in
meeting requirements and solving problems or helps to bridge 'performance gaps'
during a rental phase, it has a better chance of being adopted.
Table 10: Rental in the Technology Innovation Process
Decision: The decision-making process varied from firm to firm. Of the five
Case Firm Rented Purchased
#1 Probe 6 weeks Nov. 6th /97
#2 Trinity 6 weeks Feb. 15th /98
#3 Petrel Robertson 6 weeks Mar. 25th /98
#4 Canadian Petroleum 4 weeks June 8th /98
#5 Star Oil and Gas Demo Apr. 2nd Apr. 3rd /98
firms which adopted the innovation, two had flat organizational hierarchies, while the
other three had three or more levels of management. The decision-making process to
purchase the innovation was relatively simple in Case#1 (Probe Exploration) and in
Case #4 (Canadian Petroleum). In both cases, the user was the vice president of the
company who decided to purchase the innovation after several weeks of incurring
rental fees. In Case #2 (Trinity Energy), the decision to purchase the innovation was
made by the president. It took approximately one week. In Case #5, the decision to
purchase the innovation was made over-night by the Vice President of Resources and
Development. Case #3 (Petrel Robertson) was an anomaly. It took six months for the
president to be persuaded to purchase the innovation because of a complex
organizational hierarchy involving three different managers at the middle management
level. Manager Arezki Loughlissen spent several months building a coalition of
approval in a participative championing process to gain support from two other middle
managers. Six separate recommendations to purchase the portable digitizer were made
to the company's president. Five employees had to demonstrate a need for the portable
digitizer and show that the innovation was capable of performing multiple tasks by
multiple users. The need to upgrade and reduce costs ultimately convinced the
president to purchase the innovation.
In-House: Production in-house rather than outsourcing of work allowed each
small firm to have greater control over its product. It also strengthened users'
knowledge and awareness of new technologies. Reducing outsourcing costs and saving
time by doing tasks in-house were strong factors influencing the technology innovation
decision process. Outsourcing the digitization of logs customarily required two to three
days, causing time delays and bottlenecks for processing critical data in time to bid for
new projects.
CROSS-CASE ANALYSIS DISCONTINUANCE/REJECTION
The intent of this study was to answer the research question: What factors
influence adoption, discontinuance, and/or rejection of the portable digitizer over
time among small Canadian oil and gas firms? This study both confirmed and
extended the research as to why a company discontinues or rejects a new technology.
The researcher confirmed five factors which influenced the discontinuance and
rejection of the portable digitizer over time among small oil and gas companies. The
dynamics of: 1) market opportunities; 2) meeting requirements and solving problems;
3) user attitudes and experiences; 4) the state of the technology itself; and 5) the
decision-making process within a non-supportive organizational culture were all strong
factors influencing the rejection of the innovation.
The sample for discontinuance and rejection consisted of five companies. At
the time of the study four were publicly owned and one was privately owned. All five
companies focused on oil and gas exploration as a primary organizational activity. All
four companies which rejected/discontinued the innovation were small public regional
companies, some with field offices scattered throughout the province. The exception
was Case # 7 (Capella Exploration), which was a privately owned consulting firm. The
Vice President of Surveying and Mapping at Capella discontinued using the portable
digitizer after a four week, free-of-charge trial period. Instead of purchasing the
innovation, he decided to purchase and adopt a competitor's product. Eventually, the
Vice President became sorely disappointed with the competitor's product and, in
retrospect, was dismayed by his decision to reject the portable digitizer and its
accompanying software package.
Some factors influencing the rejection process resembled the adoption process,
but to a lesser degree. The need to save time rated much lower for small firms which
rejected the innovation. Utility and digitizing also rated lower for firms which rejected
the innovation, in part because the firms were working in the North American market
where analog geological and geophysical data had already been digitized.
However, some new key variables surfaced in this study. Firms which rejected
the innovation seemed to seize market opportunities in the form of acquiring new firms
to increase productivity and profit, instead of bidding for new projects. Users
consistently complained about having problems with data and had no knowledge of the
innovation or its prototype. Users who rejected the innovation also spent more time
with the vendor, observing the demonstration.
Market Opportunities
Exploration: As with adopters, exploration appeared to be the major economic
focus and potential 'performance gap' for small oil and gas firms that rejected the
portable digitizer. Four out of the five firms which rejected the innovation were
Calgary- based oil and gas exploration and production companies actively seeking
exploration initiatives. At the time of this study, Case # 8 (Jordan) had planned to
complete its largest exploration and development program ever. It had already
contracted additional drilling rigs with the expectation of accelerating its drilling
activity to drill thirty new wells following the 1997 spring break up. Case # 10 (Pan
East Petroleum) Corporation had also been an aggressive explorer for high quality
natural gas reserves in Western Canada. At the time of this study, three out of the four
oil and gas exploration companies which rejected using the portable digitizer were
trying to develop new properties.
Development: As with adopters, development appeared to be the major
economic focus and potential 'performance gap' for small oil and gas firms which
rejected the portable digitizer. Three out of the four oil and gas exploration companies
which rejected the innovation were trying to boost their development opportunities. In
Case # 8, Jordan's recent transaction with Transwest Energy Limited had given the
company additional exploration and development opportunities. In Case #10, Pan
East's ownership of the new K3 plant, the largest and most sophisticated oil and gas
processing facility in western Canada, was expected to have an increasing economic
influence over the company's natural gas exploration and development areas. At the
same time, Case # 9 (Summit Resources) had just completed drilling 29 wells. Of these
wells, 10 were exploratory wells and 19 were in the development phase.
Production: It appears that all four oil and gas companies in the exploration and
production end of oil and gas which discontinued or rejected the innovation were
heavily involved in the pursuit of quality, non-competitive acquisition merger
opportunities, resulting in significant growth in production, reserves, cash flow and
earnings. The four companies that rejected the innovation had increased production
through the acquisition of other properties or firms, and had not pursued economic
opportunities through new projects.
Drilling: At the time of the study, only one of the four oil and gas exploration
firms that rejected the innovation, was involved in drilling opportunities. In Case # 10,
Pan East's operations in 1996 were weighted heavily toward activities other than
drilling. In particular, much time and effort were spent on production facilities issues
and on consolidation. During the last quarter of 1996, the company shifted its
operational emphasis in the latter part of the year back to drilling. Meanwhile, in Case
# 9, Summit's primary objective was the creation of long-term shareholder value by
exploring, acquiring and developing high quality oil and gas assets. Summit's
operational strategy to reduce its 'performance gap' included the successful acquisition
of properties at competitive prices and the selective drilling of high quality prospects.
During 1996, Summit participated in the drilling of a total of 29 wells. Of these wells,
10 were exploratory, 19 were development, resulting in nine oil wells, (5.3 net), nine
gas wells, (5.5 net), and 11 dry holes, (6.0 net).
Acquisition: Acquiring new properties and firms was the economic strategy
used by the four oil and gas companies which rejected the innovation. It appeared that
the firms which rejected the innovation relied heavily on the expertise and past
successes of other companies, which they gained through merger and amalgamation
situations. For the firms which rejected the innovation, acquisitions were perceived to
be more critical than projects for economic survival. Acquiring new properties,
facilities and firms were the primary economic strategies to bridge perceived
'performance gaps'. (Note: the fifth company that discontinued the innovation, Capella,
is a consulting company).
Technical: The four exploratory firms which rejected the innovation appeared
to be more concerned about technical problems than those that adopted it. Founders
(Case #6) added several key people to its technical and management team. Perhaps
this was an indication of a need for improvement in its technical base. The company
was concerned about the technical literacy of its employees. A user in Case # 10 (Pan
East) admitted that one of the reasons he was hesitant to adopt the innovation was poor
technical support. Meanwhile Case # 9 (Summit) had three technicians. None of the
three had ever heard of the innovation. Technical concerns included: 1) an awareness
of lack of technical expertise; 2) the need to hire people with more technical expertise;
3) complaints about lack of technical support from the vendor; and 4) admissions of
lack of awareness about the innovation.
Requirements and Problems
Data: The most recent problem facing rejecters appeared to be the increasing
frustration in dealing with data requirements and problems. In the area of information
technology, rejecters of the innovation complained about the lack of IT development
for the oil and gas industry. Related problems included: 1) the lack of 'off the shelf '
software products from which to select; 2) the inability to combine different formats
for large amounts of data; 3) requirements to constantly supply high quality maps for
presentations; and 4) the lack of an industry format. Users stated that they had little
time to learn a new software/hardware product or were very comfortable with their
existing practices. There appeared to be a variety of methods in which users combined
software packages to solve problems and ultimately meet the requirements of their job.
Rejecters seemed discouraged and impatient. They had less time to learn and continued
to perpetuate their requirement problems by using traditional methods that were
cumbersome and time consuming. The users who rejected the innovation and its
accompanying software package were extremely entrenched in established methods for
processing data. The use of microfiche, slide rules, paper and pencil was common.
Rejecters had such strong allegiances to traditional methods that there appeared to be
little reason for them to change.
New: Some of the small oil and gas firms that had rejected the innovation and
its accompanying software package had done so in favor of free upgrades offered by
vendors. Some users rejected the innovation because they viewed themselves as 'old
fashioned ' and did not see any real advantage to buying new information technology.
It appeared that users who balked at trying new technology were proud of using
traditional methods and were very closed-minded on the topic of adopting new modes
of information processing.
Time: Rejecters of the innovation and its accompanying software package felt
they had little time to learn new technology. Rejecters had less time, overall, because
of the time consuming, laborious methods they continued to use for analyzing and
disseminating geological and geophysical data.
Digitization: The users who rejected the innovation were comfortable using
existing methods of digitization. The geologists and geophysicists from Jordan,
Capella, and Summit, for example, passed on their requirements to their technicians
who used 'digitizing tablets' (a slightly older technology). Some used other software
packages, such as 'Photon' or 'HighJack', for seismic interpretation. Users who rejected
the innovation did not appear to have as great a need to digitize logs or to do
volumetrics. Little digitizing was done in-house and, if logs were needed, the digitizing
tended to be out-sourced. It appears that rejecters had little use for the portable
digitizer. (Note: The rejecters were not involved in the international market. In the
domestic market, most of the geophysical and geological data have already been
digitized, so rejecters did not have as urgent a need).
Technology: Technology did not appear to play as important a role in firms that
rejected the portable digitizer. Rejecters seemed as frustrated as their adopter
counterparts about the difficulty of combining different formats and software
packages. However, rejecters appeared to be more accepting of analog information and
were more willing to tolerate the confines of traditional methods to process their work.
Cost: Cost was not the primary reason for rejecting the portable digitizer and its
accompanying software package. Two of the rejecters opted to try to buy a
competitor's software product. Pan East (Case # 10) had just purchased a $20,000
software package named 'GeoGraphics', while Summit (Case #9) had just purchased a
small $2,500 software package from Veritace. Two other companies, Case #7
(Capella) and Case #6 (Founders), opted for free upgrades through a pre-existing
contractual agreement with another vendor. Rejecters appeared to be more interested in
upgrading their current software packages through existing vendors. Such an approach
did not involve learning a new software package and in most cases was free.
Rent: Rejecters did not rent the innovation and had very little knowledge about
or opportunity to try the innovation. In Case # 7, the Vice-President of Capella
Exploration went through a short four week trial period but ultimately rejected the
portable digitizer because of the time and expense he would have to incur to convert
the existing data base. Similarly, in Case # 10 the Manager of Pan East Petroleum
discontinued using the innovation after trying it for several weeks. The portable
digitizer and software product (GEOCAD) were discontinued at Pan East Petroleum
because the vendor would or could not re-invent the product for another purpose. It
appears that 'giving' users new technology to sample and try was not the same as
renting. Renting implies a real need and users are committed to paying for a
technology, at least provisionally. Free trial periods by vendors did not appear to
encourage adoption.
Knowledge Development
Demonstration: According to Magill and Rogers (1981) change agents often
seek to speed up the innovation-decision process for individuals by sponsoring
demonstrations of a new idea. Magill and Rogers (1981) have evidence that this
strategy can be quite effective, especially if the demonstrator is an opinion leader. In
this study, the vendor or salesman was a geologist and a knowledgeable professional
who had worked previously for several oil and gas firms. The salesman was very
knowledgeable about the hardware, but the 'GEOCAD' software package was a new
product that had just been developed by the company. Rejecters were very critical
about the salesman's lack of knowledge concerning the new software package. As
Magill and Rogers(1981) point out, demonstrations can be effective but they must
show the effectiveness of the innovation. If the demonstration leaves a poor impression
on users and in fact highlights the difficulties associated with using a new technology,
the innovation will possibly be rejected.
Vendor: Ironically, the study revealed that rejecters had more contact with the
vendor than did adopters. The vendor was persistent in demonstrating the new product
and had more contact with users in setting up appointments to demonstrate the
innovation. When the vendor did not give a convincing demonstration, users opted to
upgrade their existing technologies or to buy a competitor's product.
Technologies
Use: Rejecters were more comfortable using traditional methods to meet
requirements and solve problems. Users who rejected the innovation were far more
comfortable using traditional technologies such as microfiche, diskettes of data and
even paper and pencil. Using traditional technologies appeared to be far more
laborious and time-consuming and undermined the amount of time users had to
complete required tasks and solve problems. Therefore, rejecters actually had less time
to learn about new technologies.
Product: Users who rejected the innovation and its accompanying software
perceived no relative advantage to using or adopting the portable digitizer. Rejecters
had different requirements and needs than adopters, and had little use for the portable
digitizer. Once again, part of the problem was that there were few available off the
shelf software products for users to select from. Rejecters of the technology appeared
to have different usage requirements than adopters. Users who rejected the technology
also complained about the lack of service from the vendor and lack of technical
support. The lack of specialized products available to geologists and geophysicists
working in the oil and gas industry must also be noted. Some users were simply more
impressed with a competitor's product.
Decision-Making
Need: Rejecters complained about the lack of a uniform industry format and
the need to incorporate seismic data. Rejecters also complained about needing map
processing capabilities in something other than a MAC platform, as the oil and gas
industry operates mostly on an IBM platform. This need further complicated the
integration of data. Users interviewed said they had no need for the innovation and its
accompanying software. They seldom digitized and, if they did, they would either ask
their technician to digitize data using a digitizing tablet, or out-source their digitizing
tasks.
Tools: Rejecters appeared to be more concerned about the tools they needed for
completing required tasks. Rejecters agreed that the innovation and its accompanying
software were high end tools. Users who rejected the innovation agreed that they were
interested in the GEOCAD software package primarily as a mapping tool; however,
some found it too complex to try.
Decision: The hierarchies of the small oil and gas companies which rejected the
innovation were similar to those which adopted the innovation. Rejecters had to seek
approval from their corporate leaders for new technology purchases. However,
rejecters never sought approval for a technology they had already perceived as having
no relative advantage. Rejecters were basically never involved in the technology
innovation process. Most of the users interviewed from the small oil and gas firms
which rejected the innovation did not search for a better way to analyze or present their
data. The vendor usually contacted the user with the hope of demonstrating the
product. Of the few users who did search for a better or easier way to complete
required tasks, the choice was made to purchase a competitor's product. Part of the
choice to purchase another product was the incentive of free upgrades. This strategy
usually was sufficient to bridge the 'performance gap' resulting from immediate
technology needs.
Conclusions
Market Opportunities: The introduction of new technology into an organization
can be framed as a process of innovation. The adoption of the portable digitizer
followed the technology innovation process. All five companies which adopted the
innovation employed users who searched for a better way to access and analyze
seismic data, leading to a choice to try the portable digitizer. This study confirms that
the adoption process takes place in the context of an organization’s strategy and market
situation. Perceived characteristics of the technology also are critical.
This study confirmed that innovation in an organization is typically stimulated
by a “performance gap” between actual and desired results involving competitors’
practices, missed opportunities in the marketplace, and unmet customer expectations.
The data confirmed that a “performance gap” between actual results in the firms'
exploration, development, management, production and drilling operations resulted in
missed opportunities in the market place. All five adopting companies desired a
stronger foothold in the market place, especially in the international arena. By adopting
the innovation, economic opportunities presented them with increased exploration
projects.
In the international market, the portable digitizer proved extremely valuable
because of its portability. The innovation helped to interpret and analyze the
geophysical data required for the development of oil and gas fields. Successful
development drilling resulted in significant increases in oil production, and hence in
profits. This confirmed that companies that knew how to apply the portable digitizer to
the problems at hand were more likely to adopt the new technology. Such
“performance gaps” motivated five companies to adopt the portable digitizer.
Rejecters of the innovation were less involved with exploration and
development. Acquisitions were far more important to rejecters than adopters.
Rejecters tended to find market opportunities through merging or acquiring other small
firms, thereby extending profits in an economic ‘financial play' to increase share
prices. Rejecters would then depend on the use of the other firm’s facilities and
information technology.
Rejecters were more concerned about technical problems including: 1) an
awareness of lack of technical expertise; 2) the commitment to hire people with more
technical expertise; 3) complaints about lack of technical support from the vendor; and
4) admission of lack of technical awareness about the innovation itself.
Requirements and Problems: The incapacity to combine different formats of
large amounts of geological and geophysical data was a frustration discussed by all the
users whether they adopted, discontinued, or rejected the innovation. The difference
between adopters and rejecters was that adopters appeared to be willing to 'search' for
and to 'try' a new technology in the hope of improving the quality of their work,
whereas rejecters appeared to be so frustrated that they merely plodded on using
outdated traditional information technology. Willingness to digitize their data appeared
to be the strongest predictor of adoption of the innovation. Because of the increasing
globalization of small enterprises combined with new economic opportunities in the
international market, the standardization of information to a digitized format is
becoming the norm used by almost all oil and gas companies.
The competitive nature and economic conditions surrounding oil and gas
exploration and development are important factors in securing new business in the oil
and gas sector. In the past, calculations were traditionally done by hand, section by
section. This was a laborious and time-consuming endeavor prone to miscalculations
and errors. Thus a strong motivation for users to adopt the innovation was its time
saving capabilities, especially for large tasks. The data collected supported the finding
that end users must be educable in the new processes involved in using the portable
digitizer and see some benefit to them if they and their companies are to gain full
advantage of the new technology.
Some of the requirements and problems facing users included the question, "At
what point should the new technology be purchased?" A technology is usually not
adopted unless there is justification for its purchase. The justification can be a new
project that presents an opportunity to link user demand with upper management
control. Users are always in need of upgrades and want new technology while, on the
other hand, upper management is usually trying to curb financial costs. Renting new
technology and outsourcing are temporary measures to keep production flowing.
However, to save time, to reduce costs and to gain in-house control, a new project can
be a strong incentive for users to try a new technology, and for upper management to
agree to its purchase. It is at this juncture of the technology innovation process that
market opportunities guide the decision to rent new technology in order to secure and
complete new projects. It is also interesting to note that all five firms studied for this
research project rented the innovation for some time before purchasing it. This
substantiates the finding that the longer a new technology is rented, the more likely
users will become more knowledgeable about the innovation's relative advantages and
the more likely it will be adopted.
Not surprisingly, adopters' frustration levels with existing methods seemed to
be higher than those of rejecters. This in turn forced them to search for a better way to
conduct their work. The search led them to try or to rent various technologies. The
technology innovation process was never undertaken by rejecters. In other words,
rejecters did not go through the various stages which encourage adoption.
Rejecters appeared to be more frustrated when dealing with data requirements
and problems, compared to the adopters of the innovation. Frustrations and complaints
were often voiced over the requirement to constantly supply high quality presentational
maps. Rejecters consistently faced the problem of amalgamating large portions of data
using different software packages. There appears to be a variety of methods by which
rejecters cobble software packages together to solve problems. The difference was that
adopters seemed to overcome the problems in amalgamating different software
packages. Rejecters became discouraged and impatient. They devoted less time to
searching for new technologies to meet their data processing needs.
Users who rejected the innovation and its accompanying software package also
did not have as great a need to digitize logs or calculate volumetrics. Little digitizing
was done in-house by rejecters. All five small firms which rejected the portable
digitizer outsourced their digitization work. It appeared that rejecters had little use or
need for the innovation. Most of their work was conducted in the domestic market
where geological and geophysical data had already been digitized.
Knowledge Development: The championing process appeared to be a strong
factor influencing adoption. In all five cases in which adoption occurred, there existed
an employee or person in upper management who supported the technology.
Champions made a decisive contribution to the innovation process by actively and
enthusiastically promoting the innovation by: 1) building support; 2) overcoming
resistance and; 3) ensuring that the innovation was implemented. Champions made a
decisive contribution to the innovation process. Rejecters and adopters saw
demonstrations put on by the same salesman. The difference was that adopters
searched out the vendor and product, while rejecters did not conduct any form of
search for a new technology.
An interesting process revealed by this study was that most of the adopters had
been exposed or had previously used the prototype to the portable digitizer. The
prototype had either been demonstrated to or used by each champion. This fact
supported the finding that clients who have used the prototype of an innovation will
more likely find the innovation compatible with their past experiences and needs and
be more likely to adopt. A demonstration is clearly an important factor influencing the
adoption of new technology, and is a tactic that vendors utilize to sell new
hardware/software. Hence, the data collected for this research support the
generalization that the more amenable to demonstration an innovation is, and the more
visible its perceived advantages are, the more likely it will be adopted.
Ironically, the vendor spent far more time and effort in demonstrating the
portable digitizer and the new ‘GEOCAD’ software product to clients who ultimately
rejected the technology. Demonstrations can be effective but, in addition to having a
knowledgeable opinion leader, they must show the relative advantage of a product.
This research leads to new evidence that a less than expert demonstration leaves a poor
impression on potential adopters, as it may highlight the difficulties involved with
using a new technology. Rejecters were not impressed with the vendor’s demonstration
and most eventually decided to upgrade or buy a competitor’s product, even though the
vendor was far more persistent (in his contact time) with those who rejected the
innovation. This confirmed the finding that the more complex the portable digitizer is
perceived to be by the end user relative to available alternatives, the more likely it will
be rejected or discontinued.
In addition, there was a complete absence of championing among firms which
discontinued or rejected the innovation. In all of the five firms that rejected the
portable digitizer, the championing process was non-existent. Users had: 1) no
knowledge of the innovation; 2) never used or heard of the prototype; 3) never rented
the innovation; nor 4) knew of colleagues who used the innovation. Rejecters never
searched for a more efficient method of meeting requirements and solving problems
through the use of new technology. In conclusion, a technology innovation process was
largely absent in firms which rejected the innovation. Adopters searched out vendors
along with the latter's innovation, product and services. Rejecters did not.
Technologies: The adoption of new technology constitutes a series of historical
perceptions and cumulative decisions made by users over time. This research shows
that potential adopters have strong perceptions and knowledge of new innovations set
over time during different phases of the development of an innovation. Potential
adopters of the portable digitizer used the innovation in different contexts at various
companies. There was usually more than one potential adopter in each small firm and
each potential adopter used the innovation for different purposes. Not only did the time
frame, user, and usage change over time; companies also changed, over time. The
market changed as well, changing the usage of the innovation from use in a domestic
market to use in an international market. Usage also highlighted the changing nature of
the oil and gas job market. Tasks for geologists, geophysicists and technicians had
converged over time with the advent of continued downsizing and the convergence of
job requirements. In addition, all of the adopters interviewed only used the innovation
on a part-time basis for specific requirements that appeared to be project driven.
Familiar innovation characteristics such as accuracy, flexibility, utility,
simplicity and reliability appeared to have very little impact on the actual adoption
process. Portability was a much stronger factor for the adoption of the innovation.
Rejecters did not have as much need to digitize and saw no advantage to using the
innovation. This was in part because most of their new projects were in the domestic
market, where the relevant geological information had already been digitized. Factors
leading to rejection included: 1) complexity; 2) compatibility issues; and 3) the
perception among users of there being no relative advantage to the innovation, along
with 4) a lack of knowledge about the product. Issues surrounding the need to re-invent
the product surfaced only among the rejecters. Rejecters of the technology appeared to
have different usage requirements than adopters. Users who rejected the technology
also complained about the lack of service from the vendor as well as lack of technical
support and, in general, the lack of specialized products available to geologists and
geophysicists working in the oil and gas industry. Some users were simply more
impressed with a competitor’s product.
Decision-Making: Among adopters, the portable digitizer was important to the
decision-making process. It provided quick maps outlining potential exploration and
development opportunities. In other words, the innovation increased small firms'
efficiency. Also, the portability of the portable digitizer was particularly advantageous
in international markets. This study confirmed the prediction that companies that know
how to apply the portable digitizer to the problems at hand will be more likely to adopt
the new technology.
The portable digitizer also enhanced a small firm’s image by producing
reliable, high quality presentational maps of seismic and oil field data. The product
enhanced the organization’s image when generating presentational maps in bidding
competitions for new projects. The data collected for this study therefore support the
conclusion that the portable digitizer enhances the adopter’s image and the firm's
image.
This research also highlighted the fact that champions have a tremendous
influence on the decision-making process leading up to adoption. Champions articulate
a compelling vision about the potential positive impact of information technology on
the organization. In all five firms where the innovation was adopted, champions of the
technology helped to build consensus or navigate through a difficult decision-making
process. This study also showed that the more levels of management or hierarchy
needed to build coalition or to approve purchase of a new technology, the longer the
innovation decision process. (For example, of the five firms adopting the innovation,
the manager and champion at the firm of Petrel Robertson (Case #3) took the longest,
a full six months, to gain widespread informal and formal support to purchase the
product). The data collected from this study also support previous research indicating
that the more levels of management and the more complex the hierarchy in a small
firm, the longer the technology innovation decision process will take.
Rejecters and adopters referred to the portable digitizer and its accompanying
‘GEOCAD’ software as a high-end tool. However, unlike adopters, rejecters decided
that the innovation was too expensive, complex, or difficult to learn. This study
confirmed that the more complex the portable digitizer was perceived to be by the end
user, relative to available alternatives, the more likely it was to be rejected or
discontinued. Adopters appeared to overcome these hurdles, rejecters did not.
AREAS FOR FUTURE RESEARCH
Areas for future research include the effect of mergers and acquisitions on the
adoption of new technology in small firms. It would be prudent to examine further
technology adoption in a merger/acquisition situation, especially when the acquiring
firm is using one form of technology, while the acquired firm is using another.
Organizations cannot function properly with mixed technology. They must operate in a
common operating and software environment. The benefits of standardization and
integration are huge; but how are such goals achieved in a duel system environment?
Time constraints and multiple users competing to use the technology also appear to
create bottlenecks in organizational efficiency. What happens when one technology
must be shared by multiple users?
This study showed that novelty played a large part in the competitive oil and
gas market. By not using traditional methods and by creating newer methods for
exploring, discovering and producing oil and gas, small firms appeared to gain a
competitive edge. It would be interesting to investigate if there is a strong positive
correlation between the adoption of new technology and a company's success, and if
the adoption of new technology is project-specific. Does economic opportunity drive
the innovation decision process?
For the future, more research also needs to be conducted during the trial stage
of adoption. Why do some firms and users have a longer trialability stage than others?
Also, are small firms searching for new technologies that are capable of multi-tasking
by multi-users in a variety of contexts (i.e., both in domestic and international
markets)? Is this a new development in the adoption of new technology among small
firms? Research to examine the relationship between the economic climate of
particular sectors and the adoption of new technology might also be worthwhile. Is
there more adoption of new technology during eras of high gains and profits in a
particular market? Is there less adoption of new technology when markets are sliding
and economic conditions are poor?
Finally, in the past non-adopters have been referred to as ‘laggards’. Perhaps
they are not laggards, but rather innovators waiting in the wings for newer, improved
technologies to come along to meet their needs. Instead of relying on an intermediate
technology to solve immediate problems, some 'laggards' might be more cautious,
waiting for more powerful technology tools to improve work processes within their
organizations.
APPENDICES
A. THE PORTABLE DIGITIZER
B. RESPONDENT QUESTIONNAIRE
C. RESEARCH TIME FRAME
APPENDIX A. THE PORTABLE DIGITIZER
The portable digitizer is a recent information technology, developed in-house
by DigiRule, a Canadian-based company located in Calgary, Alberta. The innovation
was designed by geophysicists to compute and display potential well sites and to
prepare for oil well drilling. It is a tool developed by DigiRule specifically for seismic
lines, and consists of hardware and software components.
The hardware component, called “The Rat”, was named by the developer as a
spin-off of “The Mouse". It consists of a body weighing 1.1 kg. (2.5 lb.), width and
length 33 x 7.6 cm. ( 7.25 X 4.75 in.) and a cursor length or ruler of 33X 7.6 cm. (13
X 3 in.)
The software component or Ratware includes full CAD capability, which
allows for the instant addition of objects and text. The software package is specifically
designed to take full advantage of the hardware features of both the Digitizer and the
prototype, The Ruler. The system requirements are Windows Version 3.1, a 486 - class
PC or compatible, and 8 MB RAM. The software also operates on any UNIX Version,
SunOS, Solaris 2.3 or later, HPUX 9.x or IRIX.
The portable digitizer is promoted by Digi-Rule as a faster, more versatile and
more convenient way of digitizing well logs, dipmeter logs, seismic section picks,
velocity charts and planimetry. The software generates several end products, including
synthetics, contour maps, volumetric reports and posted maps or profiles of seismic
data. The traditional method for converting geological data involved hand-drawn or
computer assisted designs which had to be taped together in order to examine multiple
lay-downs of information for oil and gas companies to accurately determine well site
and drilling. The portable digitizer can digitize multiple documents and integrate
digital data from various sources that then can be manipulated into various formats.
The digitizer is totally portable and goes to the work site, is more convenient than the
traditional methods of taping multiple lay-downs, and is promoted to be cost effective,
to save time, and to increase productivity. Digi-Rule claims that the digitizer allows
seismic interpreters to produce professional, accurate synthetic seismograms quickly
and easily. At the time of this study, (1998), approximately 300 systems had been sold
worldwide. More than 150 had been sold to various oil and gas companies in the City
of Calgary alone.
APPENDIX B. RESPONDENT QUESTIONNAIRE
H1: A “performance gap” between actual and desired results involving competitors’ practices, missed opportunities in the marketplace, or unmet customer expectations will most likely motivate companies to adopt the portable digitizer.
a. Do you know of other users who are using the portable digitizer?b. Does using the portable digitizer present any opportunities?c. Does using the portable digitizer help you to be competitive?d. Does using the portable digitizer help you to meet client expectations?
H2: Companies that know how to apply the portable digitizer to the problems at hand will be more likely to adopt the new technology.
a. What do you use the portable digitizer for?b. Why did you decide to try the portable digitizer?
H3: End users must be educable in the new processes involved in using the portable digitizer and see some benefit accruing to them if they and their companies are to gain full advantage of the new technology.
a. Does using the portable digitizer make your work more interesting?b. Does using the portable digitizer make your job more enjoyable?c. Does using the portable digitizer help make you more efficient?d. How does using the portable digitizer make you more efficient?e. How does using the portable digitizer benefit the company?f. Would you say your firm encourages the adoption of new technology?
H4: The more amenable to demonstration the portable digitizer is, and the more visible its perceived advantages are, the more likely it is to be adopted.
a. Where did you first see the portable digitizer in use?b. Who was the first person to demonstrate the portable digitizer to you?c. Does using the portable digitizer enable you to accomplish tasks more
quickly?d. Does using the portable digitizer improve the quality of the work you do?e. Does using the portable digitizer make it easier to do your job?f. Does using the portable digitizer improve your job performance?g. Does using the portable digitizer give you greater control over your work?h. Does using the portable digitizer improve your effectiveness at work?k. Does using the portable digitizer increase your productivity?
H5: The perception that a company's usage of the portable digitizer enhances an individual’s image is positively related to its adoption.
a. Does using a portable digitizer improve your image in the organization?b. How does using a portable digitizer improve your image in the
organization?c. Would you say that by using the portable digitizer, others in your organization see you as a more valuable employee?
c. Do you think people who use the portable digitizer have more prestige than those who do not?
d. Do you think being able to use the portable digitizer is viewed a status symbol in this organization?
H6: Users who have tried the prototype (the Ruler) of the portable digitizer will be more likely to find it compatible with their past experiences and needs, thereby enhancing the likelihood of its trialability and adoption.
a. Is using the portable digitizer compatible with all aspects of your work?b. What do you use the portable digitizer for?c. Is using the portable digitizer compatible with the way you like to work?
H7: The more complex the portable digitizer is perceived to be by the end user relative to available alternatives, the more likely it will be rejected or discontinued.
a. Do you find the portable digitizer complex to use?b. Does using the portable digitizer require a lot of mental effort?c. Are you often frustrated when using the portable digitizer?d. How long did it take you to learn how to use the portable digitizer?e. Was it easy for you to learn how to use the portable digitizer?f. How did you learn to use the portable digitizer?g. Did you learn from the manual?h. Did you phone up for technical support?
H8: The longer a new technology is rented, the greater the likelihood users will become more knowledgeable about the innovation's relative advantages, and the more likely they will be to adopt.
a. How did you find out about the portable digitizer?b. Did you initially 'rent' the portable digitizer?c. How long did you rent the portable digitizer?d. What date was the first week in which you used the portable digitizer for
two weeks or more for work related purposes? (includes training and demonstrating activities).
i. What are the advantages of using the portable digitizer?j. What are the disadvantages of using the portable digitizer?
APPENDIX C. RESEARCH TIME FRAME
December 1995 - April 1996 Theoretical Framework, Literature Review.
May 1996. First meeting with Sales Representative Lorne Fugimoto of DigiRule to discuss research objectives.
June 1996. Second Meeting with Sales Representative Lorne Fugimoto of DigiRule. Discussion of the innovation the portable digitizer. See Appendix A for more information on the innovation the portable digitizer. Discussion of whether management (DigiRule) would approve of the disclosure of sales information and names regarding end-users.
June 1996. Letter to Sales Representative Lorne Fugimoto of DigiRule. See Appendix B.
July 1996: Third Meeting with Sales Representative Lorne Fugimoto of DigiRule and demonstration of the portable digitizer. Management approval granted for the research. See Appendix C for Field Notes. See Appendix D for Functions of the portable digitizer.
August 1996: Ten companies selected for adoption/rejection case studies.
September 1996-October 1996. Re-writing Theoretical Framework.
December 1996: Beginning of data collection.
August 1997: End of data collection.
April 1998 - May 1998 Analysis.
June 1998 - August 1998 Analysis, Findings and Conclusions.
September 1998 - February 1999 Re-Writes.
July 1999 Defense.
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BIOGRAPHICAL SKETCH
Diane Howard was born in Montreal, Quebec and now lives in Calgary, Alberta
with her husband, Daryl Howard, and their two children Brianne and Drew Puffer. Ms.
Howard's research involves the adoption of new technology. At Florida State
University, she taught Broadcast Performance. Prior to her teaching post at FSU, Ms.
Howard was an instructor at Calgary's Mount Royal College, teaching on air radio and
television performance.
Ms. Howard is employed by the University of Calgary where she teaches three
undergraduate courses: An Introduction to Communication Theory, Computers and
Society and Canadian Mass Media.
Ms. Howard has had a long history involving work as a radio and television
news reporter, anchor and media consultant. She is currently presenting a series on
radio, with the Canadian Broadcast Corporation examining new technologies and their
impact on society.
