Will Pay By Touch be a $100 Billion Market-Cap Company?

TECHNOLOGY As a Change AGENT - RedOrbit

IN THE BUSINESS WORLD, TECHNOLOGY MATTERS - EVEN IF SOME HIGHLY INFLUENTIAL THOUGHT LEADERS MIGHT SAY, OR WRITE, OTHERWISE.

Former Harvard Business Review editor Nicholas Carr did just that three years ago, when his article, "IT Doesn't Matter" sparked heated debate among chief information officers (CIOs) and business executive from some of the world's top companies, Actually, it was Carr's that raised hackles. Readers brave enough to venture into the article discovered a premise that is difficult to argue with today: IT's core functions within a business - the processing, storage and transmission of data - have become less expensive and more easily replicated, and they should be measured accordingly.

In the late 1990s through early 2000, many technology and business executives subscribed to what Carr describes as the "IT changes everything" school of thought. "In the height of the dot com boom, we felt that the Internet was changing the rules of the game," notes Baylor University assistant professor of Information Systems, Hope Koch. "Many companies put aside the traditional rules of the game or ways that they evaluated business investments and invested in Internet initiatives. We saw many of these initiatives fail with companies losing millions in the process. As connectivity increases and technology advances, organizations have to stay abreast of the possibilities, consider how it can help the company achieve value, and in cases where it will, they need to adopt it."

To effectively conduct the evaluation Koch describes, executives should understand the recent important technological breakthroughs, the implications of those breakthroughs on how companies conduct business and the other elements that need to be in place for the technology to make good on its promise.

BIG BREAK THROUGHS

Brett Moore, CFO of the McLane Group, in Temple, Texas, can recall when his company introduced the first personal computer to one of its operation divisions in 1985. Since then, Moore says, technology developments have dramatically changed how the company, which focuses on grocery distribution among other offerings, interacts with its customers and, ultimately, makes decisions.

Moore points to three technological advancements in the past two decades that have greatly improved business processes: information standards, e-mail and workflow possessing.

BUSINESS IMPACTS

Since its inception in 2002, San Francisco-based Pay By Touch has demonstrated a commitment to integrating new technologies to help its customers. The company provides "biometric authentication, loyalty, membership, and payment solutions."

When enrolled consumers check out at a Pay By Touch customer's grocery store, they simply slide their finger into a small device that scans their unique print, enter their access code and then select their payment mode (electronic check or a full range of credit and debit cards) from the "electronic wallet" on the screen in front of them.

Many of the grocery stores link the customer's purchasing history to their loyalty programs through another Pay By Touch offering called personalized marketing.

"We think that this will be a $100 billion market-cap company," says Bill Townsend, Pay By Touch executive vice president and a graduate of the Hankamer School of Business.

"It will be just like a Visa or MasterCard, and people will just expect that when you walk into a store, you put your finger down to access your account."

It's a bold claim, but, so far, a legitimate sounding one: customers have embraced the technology, and the company's venture funding is off the charts.

Pay By Touch is approaching the market with a global view. They have already launched in both the U.K. and partnered with Citibank in the Pacific Rim, first in Singapore, with more Pacific Rim territories planned in the near future.

But Townsend also understands that technology is a double-edged sword for companies that sell technology. Townsend was part of the founding management team at Internet search engine Lycos, Inc., and has launched and managed several companies including YouthStream Media Networks (now Alloy), GeoCities (now Yahoo!), NewsAlert (now MarketWatch), Deja News (now Google and eBay), and voice-over Internet Protocol (VOIP) pioneer Really Easy Internet (now Hey, Inc.).

"A mentor once told me that you do not solve problems with computers," Moore recalls. "You use people to solve the problems and computers to help you do it. A common mistake businesses make is that we think by putting in a system it's going to solve our problem."

What truly solves problems, he adds, involves a more comprehensive change-management effort: putting best practices in place, implementing technology to support those processes, training employees to properly execute the new processes and technology and then establishing internal controls and quality controls to ensure that the people, processes and technology are performing as designed.

Adapting the company's processes, people and technology is vital, particularly in today's fast-paced marketplace and global business climate.

"You may have a wonderful idea for a business that is highly dependent on what is happening in the marketplace today," Townsend explains. "But if you don't build a culture that can adapt to the changing marketplace, you'll just be another 'dot.bomb.'"

To avoid that fate, Pay By Touch has invested in proven technology, a strong intellectual property (IP) portfolio and talented employees.

"And we have adapted the business model and the product offering almost on a quarterly basis while still maintaining our vision of making Pay By Touch the most trusted, secure way to pay for goods and also to be a trusted intermediary of a consumer's personal information," he says.

Technology matters, but it matters most when it is embraced by people to support and strengthen business processes.