Dealing digitally with disruption
“But in general people are accustomed to apps and new technology products and in turn business is more willing to accept the new ecosystem of apps, cloud and certainly the power of analytics. They are becoming more open all the time to disruptive innovation.” An example Thompson uses is his team’s work on introducing a new business model to the logistics industry. “The starting point is making the industry greener and common sense suggests that could begin with utilising spare capacity. The first problem is that we don’t know where that capacity is. In fact, often the particular operator does not really know.”
“Look at Uber and Hailo,” he says. “They were industry disruptive, very quickly, but in fact it was not the technology particularly — just an app with GPS — so much as the business model. Now applying similar thinking to the logistics industry across Europe would enable it to become greener — and more efficient — by sharing surplus capacity. That of course implies sharing information, competitors cooperating. But they would be extremely cautious about what data they would share and the balance of advantage.”
One line of thinking being pursued by IBM is to use blockchain as a secure information-sharing technology. “That would be shared through cloud and Big Data platforms, hosted in a collective manner. That is a concept that is essentially disruption by design across an entire industrial sector,” says Thompson.
In Thompson’s view, IT companies are increasingly realising they will have to work on an ecosystem basis. The monolithic systems and projects of the past have been well and truly superseded. “That concept for the logistics industry across Europe could not possibly be carried out through one giant project, by one company. We have to start thinking about providing services that are consumable in the same way that apps are. Platforms and ecosystems that are pluggable and put together and developed over time in a natural evolution — but an architecture that protects data and exchanges it appropriately and securely.
“A key challenge in such complex systems, whether commercial or personal like health, is that we need mechanisms to share information appropriately and to agreed standards. The benefits of participating need to be balanced with well-governed levels of data protection and probably new trading conventions.”
He tells an interesting story of aspects of information sharing that would not be at all obvious in discussing the concept. “Talking a to major logistics company the topic came up of avocado shipments to Europe from South America, which is seasonal. When certain ships are loaded with fresh avocados in a port, that can and does affect the market prices in Europe. What outsider would think of that? So it does illustrate, and there will be thousands of other examples across industries with transportable goods, that developing such a system demands close engagement with the potential stakeholders. The innovative disruption must be planned, not reactive.”