We previously reviewed the definition of disruption as the displacement of an established technology which disturbs or shakes up an industry. It could be a groundbreaking product or a solution that gives birth to an entirely new industry.
In a recent Forbes published article the reality of digital disruption how to stay ahead it revealed 51 percent of the surveyed executives believe there is a high level of risk to their organization, in terms of both market share and revenue, over the next five years, due to technology driven disruption.
The impact of disruption in business is enormous! The agility of smaller companies makes it easier for them to disrupt or adapt to the disruption.
Startups are finding significant opportunities using new technologies to dominate markets and penetrate markets that used to be controlled by named brands. Larger companies are more challenged by disruption due to legacy systems, outdated processes, and resistance to change.
Large organizations are finding it difficult to respond. Some are new to building a structure and culture that enables innovation to cope with the demands of the marketplace.
Organizations that have been successful disruptors have created “patterns of acceptability” within their markets, so much so, that the disruption becomes a norm, a standard, a way of life. For example, the New York City Yellow Cab app known as CURB is now in place to respond to Uber and Lyft.
The impact of disruption and business is further strengthened by consumer behaviors. Customers dictate and demand more than ever. We are always looking for new and alternative ways – a better experience for a lesser cost.
Disruption is more evident today and will even become fiercer in the near future. It is impending and no business should ignore it.
So, what about IT organizations? What can they do? Well for the IT organization, the questions are:
- Should they actively embrace disruption?
- How are they going to adapt and thrive in a rapidly changing environment and marketplace?
- How will IT organizations turn disruptions into opportunities and enable businesses to benefit from it.
Change always happens, and it is uncomfortable and terrifying. It has been proven, however, the companies that efficiently adopt new technologies have a higher probability of surviving and thriving despite any disruption. Often, they can emerge as industry leaders.
Consider for a moment the automotive industry in Europe. In response to increasing petroleum costs establish European car makers started developing alternative fuel vehicles. According to “best-selling-cars.com,” hybrid, electric vehicles (EV) and diesel-powered cars account for over 42 percent of all new cars sold in Europe. Alternative fuel power was disruptive but now it is fully adopted and allowing European automakers to thrive.
In fact, the threat of the competition leveraging emerging technologies is an opportunity for legacy companies to innovate and offer updated solutions, thereby improving customer experience and further strengthening their position in the playing field. This is exactly what happened in the European automotive industry.
Let’s now take a deeper look at IT organizations. How does disruption impact IT operations and innovation? Technology creates disruption and it can also be the key to avoiding it. Businesses can choose to transform and use technology to disrupt and avoid being disrupted at the same time.
The boardroom is now looking to the IT organization to show how it can support and lead the company and becoming the disrupter, and not the disrupted.
IT disruption impacts IT organizations in many ways. Here are some critical areas where disruption from competitors can come into play:
- Emerging Technologies. Emerging technologies powered by networks and virtualized infrastructures have given rise to securely-supported computing platforms residing in the cloud.
- Slow Transformation. IT organizations that take too long to transform their legacy systems and processes promote operational inefficiencies, increasing their maintenance costs, which leads to poor customer experience and evident declines in market and revenue shares for the business. These are candidates for being disrupted.
- To be sustainable, IT organizations are now forced to handle operational and user support – and innovation – at the same time. Given challenges in resources and bandwidth, this is usually a lose-lose proposition.
- Expansion Woes. IT infrastructure continues to expand; for example, most organizations must manage at least 5X the number of devices to end-users, thereby increasing the specialization, increasing the complexity, and further reducing the bandwidth to innovate.
With end users demanding emerging new technologies, and with the increasingly greater scope and complexity of today’s computing systems, it is no wonder that several companies feel they are being disrupted. Therefore, it is vital for businesses today to assess their capabilities and re-study their marketplaces. The behaviors of consumers and customers have evolved, and the way organizations conduct business must change according to the demands of the marketplace.
While new technology models can completely disrupt and displace incumbents, it doesn’t have to be the case. Companies that embrace disruption like Amazon, Netflix, Google, Uber, Samsung, Microsoft, Cisco, Citrix, HPE and others, understand the importance of investing in transformative technologies that enable them to continuously innovate and set themselves apart.
The use of intelligent automation, cloud computing applications, “as-a-service,” and soon, quantum computing, are available today. Note that qubit algorithms for quantum computing are actually available today. They’re supposed to create geometric, some say astronomical, improvements in computing results. However, the actual quantum computer is still in R&D.
All these tools can be used to create disruption or assist in responding to a disrupted marketplace. Now don’t get me wrong, sure adapting to these new technologies may be a challenge to most companies, especially industries with historically below average investment in technology, and especially since it is not like flicking on a switch.
For instance, selecting the proper tools and equipment, and integrating these with existing systems and processes, is never easy. Learning how these new technologies work is another roadblock for speedy implementation and adaptation. Funding technology investments is another hurdle for companies operating in highly-competitive margin markets.
Of course, there is always the presence of legacy systems and existing business models, which are difficult to change with organizations and cultures that may be resistant to change.
In 2017 a survey commissioned by Dell Technologies, 52 percent of the surveyed global business leaders had already experienced significant industry disruption from digital technology. Sixty-two percent had seen new competitors enter the marketplace as a result of these technologies. And 72 percent say they are not innovating enough organization-wide.
So how to embrace disruption and shift gears to make disruption work for your organization? Here are three simple areas where you can start:
- Be the disruptor. Choose to use technology to disrupt. Use technology to gain and maintain your competitive advantage against your peer competitors. Enable the bold leadership critical for transforming your core business. Stay ahead of the curve while minimizing cost by adopting lean systems and processes that entail quick testing and iteration.
- Become data-driven. Take advantage of the influx of data in your digitally transformed environment. There is no better time to predict what your customers are looking for and what they will be demanding in the next few years than today when AI and predictive analytics are at your fingertips. This enables your business to build solutions that will solidify your customers experiences.
- Innovate or die. In the boardroom become the Architect of Change and enable the making of sound business decisions. Push for innovative ways to transform the business by staying ahead of the game. Better yet, take advantage of innovation before your business gets beaten by it. This calls for proactively spotting disruptive innovation even before it launches, putting up levels of defenses, and rapidly deploying disruptive innovation to become first in the game.
I can’t stress enough that innovation is imperative to survive in the marketplace. It is directly correlated to the company’s brand and value proposition, its relevance, and most importantly, its top line growth.
At MTM Technologies we help many organizations become strategic and start to put in place a plan for their digital transformation. It is in the consulting process that our clients realize how critical it is for them to hedge and take advantage of the convergence of these new technologies to better position themselves so as not to be taken out of the equation.
For us, it is critical that we work with our clients in a collaborative partnership to find the proper solutions to help them establish longevity in the marketplace or even aid them to transition to a new business model to survive as well as to sustain growth.
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