Technological advancement often has a major impact on the respective industry. In most cases, the disruption is irreversible. It often leaves most businesses questioning whether or not they will remain operational.
Disruption across industries is spreading at a fast rate, and the need to understand Disruptive Technology is playing will play a key role. Recognizing and incorporating disruptive technologies may be what your business needs to thrive in a new market and create new value. So understanding how disruptive technology influences your organization or sector is crucial.
What is Disruptive Technology?
Clayton Christen popularized the term “disruptive technology” in his book, The Innovator’s Dilemma. According to Clayton, disruptive technology is a technological innovation that vastly changes how customers, industries, or businesses operate. In most cases, the organizations that adapt these innovative models early generate new markets and lead to the disruption of existing, well-established organizations.
These organizations are often small in size and revenue, but their market values continually move up when they adopt disruptive technology.
The Benefits of Understanding Disruptive Technology
With experimentation and a failing forward attitude, a risk-taking company recognizes the potential of disruptive innovations at an early stage. This allows you to Incorporate new business processes into operations. Eventually, you become appealing to mainstream customers and gain a larger market share.
So, if you’re not willing to account for technological advancements, you may find your business losing market share to competitors who implement the technology first.
Amazing Examples of Disruptive Technologies
Over time, disruptive technology has changed how we operate as humans and as organizations. Below are some disruptive innovations that have had a great impact or will greatly impact the next few years.
Internet of Things (IoT) and How it is Connecting Devices Across the Globe
According to Margaret Rose, IoT refers to interconnected and interrelated devices, machines, people, and animals. The devices have unique identifiers that allow them to transfer data across the network with no human-human or human-computer interactions. Such devices are currently being used in various industries.
Which industries are using IoT?
In the consumer segments, devices such as smart appliances and smart thermostats are used to control lighting and electric devices remotely. You can control your home from your smartphone or smartwatch. You can also have all your devices and electronics connected in a way that your lighting and appliances quickly start up immediately after detecting your phone within your home.
Wearable devices with sensors are used to analyze user data and send messages across the internet.
IoT devices are used to monitor patients and send data in real-time to medical institutions. The data is applied in planning appointments, inventory management for medical instruments, and preparing prescriptions.
Despite connecting billions of devices to the internet, IoT uses billions of data points, which bring major concerns with security and privacy. As most devices are closely connected, hackers can exploit a large network through a single vulnerable point. This becomes immensely risky when hackers want to access critical sectors like; transport, financial services, or electric grids. But with the development of new technologies like Blockchain, privacy and security in the IoT will be enhanced.
I’m sure you have probably heard of the term Bitcoin, especially when its price shot up to $20,000 per coin in 2017. If you have, then Blockchain technology is the core of cryptocurrencies. It’s a record for the cryptocurrency transactions carried out on the Blockchain. If you haven’t, then Blockchain’s mechanics may sound complex, but the basic idea is quite simple. Simply put, Blockchain is a decentralized database/storage for data that cannot be owned or controlled by a central authority.
Blockchain technology goes far beyond digital money. It’s changing how digital privacy, security, trust, collaboration, and ownership are conceived in the digital space. Blockchain is disrupting large sectors and industries like; supply chain management, advertising, financial markets, financial institutions, and even general elections in some countries.
Currently, there are various real-world use cases of Blockchain. While some of them will fail to live up to their promise, those who will become disruptive organizations will move on.
Industries that are implementing Blockchain Technology in their Business Processes
Companies like Guardtime have built key-less signature systems using Blockchain to secure citizens’ health records in Estonia.
Companies like Gem are working with the CDC to put real-time data on the Blockchain’s global disease outbreak. This will increase the effectiveness of disease response and control.
In the financial sectors, big organizations like Barclays and Bank Hopaalim are developing financial instruments to ensure security and efficiency when making global payments.
In his video, Dr. Garrick Hileman explains the basic concepts of Blockchain. He outlines some of the current real-world uses of Blockchain while also pointing out a few potential uses. He also covers some of its major concerns: is it really ‘unhackable,’ and are there other reasons to be cautious when implementing it.
With the vast potential Blockchain technology is offering, various platforms and technologies can be integrated on top of it. Technologies like Intelligent Automation can be developed on top of Blockchain to create Global decentralized organizations that operate independently and efficiently.
Artificial Intelligence (AI) and Automation
The term AI is often confused with automation, and In most cases, individuals use them interchangeably. However, understanding how you define the terms is important when judging their potential in your organization.
Most people describe automation as a broad category of technological tools and processes, while AI is categorized as a form of automation. AI enables machines to identify patterns in data inputs and perform tasks that require human intelligence. This automates most of the organization’s tasks by substituting activities that seem secure and highly repetitive—for example, operating machines, controlling driver-less vehicles, delivery services, and food packaging. However, with activities that apply human expertise like decision making, planning, and creative tasks, Artificial Intelligence is implemented. By combining AI and Automation in business operations, organizations use the power of Intelligent Automation (IA).
Traditionally, automation relied on already written rules and structured data. With Intelligent Automation, the entire automation cycle is improved from customer interactions to back-office tasks. The cycle begins with process discovery, where AI tools automatically identify workflow in the business process. The tools also observe the data inputs and identify patterns in the process data. In most cases, the data is unstructured, and it includes human chat conversations, video, or voice calls, which account for 80% of all business data. The result of the cycle is end-to-end automation of any business operations that improve with time.
Industries that are implementing Intelligent Automation (IA) in their Business Processes
Transfers, trades, loan generation, and payment processing are some processes human operations can handle. However, with integrating IA from back-office operations to customer interactions, tools that guide the customer through every stage of financial operations are integrated.
Claims, remittance, reporting, payment processing, verification, and a wide range of operation can be automated by integrating bots to handle daily operations and make decisions based on the available variables and data.
Other industries that are automated or can be automated include; health-care, life sciences, manufacturing, among many others.
Intelligent automation expands the possibilities of business operations by making processes efficient, reliable, and fast. However, with many industries looking to automate most of their regular tasks through intelligent devices and machines, human employees will be affected. Intelligent automation will push most working individuals out of the workforce. With driverless cars, truck and taxi drivers will end up jobless while intelligent machines will substitute human labour. Therefore, there is a great need to prepare yourself for Disruptive Technology.
What would create if you could wield the power to create any material thing, such as machines, cars, or gadgets, only by Printing? This may seem hard to imagine, but it is already happening through 3D Printing.
3D Printing can be termed as the construction of 3-dimensional objects from a Computer-Aided Design (CAD) or a three-dimensional model. 3D Printing uses a layering method to create objects. This involves layering materials like biomaterials, plastics, resins, carbon fiber, or composites to create products that range in size, tenacity, color, and shape.
Industries that are implementing 3D Printing in their Business Processes
Thanks to 3D Printing, prices of materials and equipment have gone down. Manufacturers can also perform trial runs using prototypes, which would have consumed a lot of time and resources with traditional manufacturing.
McLaren Racing provides an example of how 3D Printing is used. Over the years, McLaren has utilized 3D Printing to develop steering wheels for its racing cars. This allows the drivers to handle various prototypes and offer feedback much more quicker. This improves the quality of their formula one car’s parts and enhances performance.
Education and Research
Open-source 3D Printing allows students and research teams to create prototypes without expensive tooling and materials. Students can design and produce actual models that can be reproduced as actual products.
With 3D Printing, you can create just about anything that your mind can conjure up. The evolution of 3D Printing is still early, and new applications will be discovered in the upcoming years.
How to Prepare for Disruption
In today’s business world, the term disruption is often used when referring to companies that upended their customer’s operations. However, contrary to what most think, disruption is a slow and steady process that aims to increase efficiency and introduce a new business model. In the technological era, no industry is disruption-proof. However, their certain steps you can follow to lead the charge in the disruption of your sector.
Take time to understand that it’s not just about technology.
Too often, companies focus on what the technology can deliver but fail to realize that technology alone is rarely disruptive. It’s about how you deploy it. As a business owner, I always consider what operations the technology will affect and the long-term effect. Sometimes, for your business to take over the market share, a complete reboot of the business model may be required.
So how do you recognize and utilize disruption? In his book, “Unlocking the Customer Value Chain: How Decoupling Drives Consumer Disruption,” professor Thales S. states that disruption is not led by technology but by enhancing customer needs and understanding customer behavior. Fortunately, any business can accomplish this. With customer analytics tools, you can better understand your customers and integrate disruptive technology to enhance their experience. Eventually, leading to market dominance.
Always make room for innovation
The question is, how do you track your customers’ needs, scan your competitive landscape, and still deliver cutting-edge innovations at the same time?
In his book, Professor Thales S. also advises the organization to deploy a double transformation approach. One will focus on re-position your traditional core business in the market, and a second one, which creates a new team dedicated to identifying, experimenting, and deploying disruptive technology.
It’s challenging to deploy a strategy that embraces disruption, but it’s always rewarding to catch the wave early.
Ensure your business model is malleable enough to adopt new technology
When Netflix first got into the market, it was just a DVD mailing service. However, when internet streaming went mainstream, Netflix rebooted its business model targeting instant customer gratification. Where Netflix saw an opportunity, big companies like Blockbusters did not flinch at what potential internet streaming could bring. Netflix undercuts most of Blockbuster’s customers.
The interesting fact is that Netflix did not stop there. Leveraging technology, Nextflix continues to innovate and increase customer experience with technologies like Artificial Intelligence.
The key lesson is always to evolve your business model based on technical circumstances.
Disruption often seems like a difficult topic to cover for CEO’s, Business Analysts, and Technical teams. This is so especially when trying to understand how technology will change your organization. Despite the uncertainty, with technological innovations, digital disruptions are inevitable. As a business owner, investor, or investor, you need to keep pushing out of your comfort zone to truly discover and harness the power of disruptive technologies.