Dealing digitally with disruption
“The point is that just a few years earlier that would have been a major project that the bank would have just had to abandon. Today, such disruptive changes in the legal and business environment are almost daily — and we can cope.”
New generation, new expectations
Jonathan Maguire, Accenture’s senior manager on the Digital team, makes an interesting point: “We have gone through a global recession and now on the back of it there is accelerated change and disruption, as has happened after every modern recession. In major enterprises, for instance, the level of strategic change and progress they were accustomed to making slowed down in the downturn. As we came out of it, technology adoption certainly picked up pace at an unprecedented rate. A key phenomenon is that the high-tech companies like Google, Microsoft and Amazon did not slow down so the technology continued to advance and was ready for the surge in take-up.
The second thing was that a new generation of people came into the market with a different set of expectations, he says. “On the consumer, mass market side there were people — not just millennials — who were natively digital. In the workforce, those digital consumers brought their habits and expectations. Many companies that were leaders in their markets, and probably investing in the smart tech of the day back a decade ago, emerged from the recession and began to realise that they had to embrace the new generation — of people and tech — if they were to continue. Many of them did not initially grasp the relevance of the new technologies to their business.”
“Today there is a pervasive culture of fast-moving business, with engineering at the heart OK, but driven by the need to be customer-centric, innovative and agile,” Maguire says. “The hierarchies and governance models have changed almost completely. Organisations of all kinds are more collaborative, which in turn is based on the technology and more and more on the data. Data-driven decisions have become the norm, frequently automated within business rules. Combine that with the customer-centric business norm and it means that change and advances are now evolutionary rather than the big project, big step forward approach of a decade ago.
“Being customer-centric with rich data and analytics is also a route to innovation, because you can proof-check your ideas and reduce the risk in introducing new products or services. There is also, for many organisations, the need to marry newer IT with the systems and infrastructure it already has. But that in turn is served by the ability to be light and agile, to make changes in an iterative way that takes out much of the risk. Governance has also changed, from the hierarchical oversight committee structures to a decentralised partnership between the business and IT working together in teams.”
“One of the ways in which business is coping with this world of constant change,” Maguire says, “is decoupling the agile and customer-facing front end from the legacy infrastructure, effectively making the IT two-speed or in fact multi-speed. In banking and insurance, to take two premium examples about to be accelerated by Brexit, there is regulatory change on an almost daily basis and new standards that have to be adopted. The answer is modern systems which are much more modular yet work seamlessly together. In a sense, you are then connecting across the organisation or organisations as opposed to everything connecting ‘into’ the organisation. We are talking about ecosystems, of IT and of business, all aligning to the necessary standards.”
“What we are also now seeing, of course, is ever greater complexity,” he adds. “In turn that brings on greater concerns about key data, corporate or personal, and cybersecurity. That all ranges from financial institutions to wearable personal tech that might be monitoring aspects of health. So today we can connect almost anything, for functionality and data. That is how we are overcoming disruption and change. But we have to be correspondingly careful about how we do it.”
Disruption or innovation
In the past, and certainly in business, disruption was used in terms of failures or other events and circumstances that significantly interrupted the supply of goods or services. Recently we have used ‘disruptive’ to describe new market entrants and technology. But that is also innovation, certainly viewed from the point of view of the organisation responsible — and probably the customers. It is only disruptive from the point of view of the market incumbents.
That is broadly the view of Gary Thompson, information and cognitive architect in the Dublin-based IBM Innovation Exchange. “We work with academic and a wide range of industry partners on projects that aim to be disruptive, principally employing leading edge cognitive and cloud technologies. It’s simply disruptive innovation. Mostly, it’s a combination of technology and business model innovation. In the tech sector we have been taking for granted that disruption is positive for that reason. But there are still many sectors where disruption is still negative or regarded as such.