Digital disruption – a positive force for change
DIGITAL DISRUPTION may be a major motivator for business change, and that need not be a bad thing.
To quote Steve Hallam, customer practice leader, Deloitte Digital Australia, “Disruption quite often has very negative connotations, but I actually think it is quite positive.
“I think consumers and businesses do derive a lot of value from how disruption affects the marketplace.”
According to The Age Of Disruption: Are Canadian Firms Prepared? – a new report in Deloitte’s Future of Canada series – only one in ten Canadian organisations (13 per cent) are ready for significant technology-driven disruption, and a company’s size, age or industry sector has little bearing on how ready it will be to adapt. The report found that almost nine out of ten (87 per cent) organisations aren’t fully prepared to handle the impacts of technological disruption, yet Canadian firms seem unaware – nearly half (43 per cent) think they are better prepared to handle the impacts of technological disruption than they actually are.
Deloitte surveyed 700 business leaders across Canada to better understand whether Canadian companies have what it take to withstand significant technology-driven disruption. Each firm’s performance was measured in four key areas of importance to disruption preparedness: awareness, culture, organisational agility, and resources. The good news is that highly prepared firms provided a roadmap for other organisations on how to prepare for disruption.
There are four key areas organisations should assess to determine their preparedness for disruption: awareness of the forces that have the potential to disrupt the firm’s business or industry; a culture that promotes, encourages; and provides incentives for innovative behaviours and practices; organisational agility to embrace new ways of working and make decisions that make it easier to rapidly redeploy systems, assets, and people to address external opportunities or threats; and effective resources, like advanced technologies, human capital and financial assets, that can be used to enable change often through the crowd.
The impact of disruption can have a positive effect for organisations, both in the private sector as well as the public sector. Here are some examples of positive disruption. Deloitte is of the view that for “digital natives” (consumers born in the post-1980s digital era), traditional financial service providers may no longer be front of mind when finding solutions to their financial needs. To succeed in this new world, finanial institutions will have to differentiate products and services through a significant investment in data and analytics capabilities. This will position them to dramatically increase customer understanding and insights that will enable them to build and deliver a tailored experience in every customer interaction.
The big advantage that incumbent financial institutions have in this regard is the vast amounts of data that is currently being collected and stored. How this data is used to provide real value and predictive insights is a key factor to staying ahead of the competition.
Today’s students have more choices in classes, better facilities, and a wider variety of learning experiences than ever before. But the fundamental way in which most children are taught has not changed significantly in more than a century. Online learning, or a blended learning environment of digital learning and traditional instruction, may be capable of introducing positive disruption. How? By personalising the learning experience according to individual student learning styles and pace, and doing so without increasing the number of teachers.
One of the most disruptive education models started off as Salman Khan’s side project to provide tutoring help to his cousins, nephews and nieces. The simple but effective math and science videos Khan posted to YouTube quickly went viral as thousands and then millions of students started to watch. All told, the Khan Academy’s disruptive model has delivered more than 30 million lessons to students around the world.
Every college and university wants to have the leading researchers who publish in top journals and lure federal grants, while also offering the most state-of-the-art academic, sports, and leisure facilities. The belief is that controlling costs would mean lower quality, reduced course selection, more teaching assistants and adjunct lecturers and fewer professors, and staff lay-offs. But are these assumptions actually true?
The key to disruptive innovation in higher education is to unbundle the different services colleges provide, and to bring a greater range of providers into the market. Online learning is the technology offering the most potential, allowing unbundling of some of the services colleges now provide, allowing students to pay only for what they need. Disruptive entrants such as the University of Phoenix, DeVry, Western Governors University, MIT’s OpenCourseware and MITx, Britain’s Open University, and many community colleges, unbundle the cost of sports pavilions, student unions, and administration. Online learning allows their low cost business models to scale upward and compete against traditional colleges and universities.
The enabling of disruptive technologies and business models that can help drive down health care costs are fairly well understood. Retail clinics, telemedicine, surgical robots, medical tourism, and personalised medicine are just a few of the disruptive health-care models that hold tremendous promise for breaking traditional price and performance trade-offs in this sector. Virtual patient visits, for example, can cut costs by one fourth. Cataract surgery costs, meanwhile, have fallen five to seven per cent per year for decades due to technology, process innovation, and the establishment of specialised clinics.
Meanwhile, patient visits to health clinics, where care is 30 to 40 per cent less than a physician’s office and 80 per cent less than an emergency room, grew ten fold between 2009 and 2011. The critical question is how to make disruption real and positive for an organisation while also ensuring that the organisation can keep up with the rapid evolution of disruptive trends.
Roger Hennis is manager, consulting, at Deloitte Barbados. Email: [email protected]