digital transformation, technological disruption,


Technological Disruption: the Fear of the Luddite Inside Us

Shifting paradigms and keeping up the pace in a liquid landscape. How can the industrial revolution teach us a lesson on how technological disruption can be a friend and not a foe?

When the spinning jenny was invented in 1764 it radically reshaped the production landscape. Akin to other inventions conceived during the industrial revolution it saved a tremendous amount of time freeing up capital to invest in other areas of business.

The spinning jenny dramatically reduced the amount of work needed to produce cloth, automating a once labour intense activity.

Workers felt threatened by these inventions and feared that automation would make them redundant, which in the short term it did, only to provide greater opportunities in the longer term. It did not take long for angry luddites to storm factories and wreck the machines which had taken their livelihoods. Fast forwarding forward into the XXI century we can find similar analogies with angry cab drivers or hotel owners that feel threatened by digitally native business such as Uber or Airbnb.

Illusration of a textile worker in the 18th century


Taxi driver protesting against Uber

The objective of this post is not however to delve into the impact of modern day disruptors on established traditional businesses. Multiple books, posts, blogs and articles have delved extensively in these conundrums and a reader can thus keep on perusing the extensive materials available on the subject. The core argument here gravitates more on the antro - sociological impact of these shifts compared to impact of the industrial revolution.

Inventions such as the Spinning Jenny or Stephenson’s Rocket did not only change the way of working and production streams, it changed the processes and business models profoundly. Trains and steamboats allowed greater quantity of goods to be delivered at 5 times the speed, yet we have grown accustomed and have had time to adapt to the changes these technologies brought to the market. As a matter of fact, we happen to still use most of the infrastructure which the industrial revolution gave birth to. Trains and ships are still very much a reality today and constantly used ferry goods from point A to point B. What has changed today with the advent of what Jeremy Rifikin (Link to book) coined as the third industrial revolution is the following:

1.    Speed of change brought on by digital

2.    Capability of adaptation and deployment

3.    Continuous learning as a consequence of shifting parameters.

As a result, talent acquisition with the right skill sets will become harder. The sheer speed in which the digital landscape is changing is more than a dilemma for businesses.

If only 20 years ago the average lifecycle of companies could last up to 70 years, it is not down to an average 17 years today. Heavy and costly legacy systems which are still in place tend to bog companies down and countless managers dread the idea of taking responsibility for drastic changes within company workflows. The rewards and opportunities are great but the stakes too high in case of mistakes sparking profound indecision on all levels creating a chain reaction which blocks the necessary innovation process paving the way for more agile competitors that can easily seize the gaps in the market.

The other ingredient in this lethal cocktails of events is brought on by our current education system which was devised and designed at the turn of the 20th century. If we take the average speed of change occurring today it is not difficult to imagine how rapidly our education systems need to adapt in order to be able to deliver talent with the required competences. Yet it is not all about skill sets learnt, we will be moving more into a world of constant learning at a quicker pace. Individuals like companies will need to constantly refine their skills in order to remain relevant in the future as more jobs will be automated by AI and robots. 

If you can’t beat them, buy them. 

When the learning curve is too steep and time is a tyrant, established companies tend to buy or partner with more agile and digitally native companies. The financial services sector for example is a ripe example of a disrupted landscape. The wave of Fintech companies sprouting and competing in niche sectors such as money transfers (Revolut, Transferwise), P2P loans (Zopa, Lendingclub) and crowdfunding has put pressure on established financial institutions to redesign their business proposition and the same is occurring in multiple industries.

Some financial institutions have ended up partnering with P2P platforms to provide loans directly into these platforms which slowly have become mainstream. The British Government has even gone as far as lending directly as well or offering Cash ISA’s to investors in these platforms

Others have bought tech platforms in a bid to onboard the know how to change the internal processes and the DNA of the company. The mistake which tends to happen in this case with traditional companies is that innovation tends to remain confined in a particular area and departments across the board do not benefit from the acquisition. 

So whilst acquisition might prove to be a solution to captivate talent and bring fresh knowledge to the room, a correct insertion across all company sectors is key to drive a strategic change on how day to day business is brought forward.

The conundrums of the modern age which I have briefly illustrated with the aforementioned examples only confirm that as humans and therefore as businesses we will experience the effects of change at an unprecedented level. The extent of how change will affect human beings from a socio anthropological stance can only be imagined but if trends in nature have dramatically shifted with temperatures rising of a single degree, how will human brains react to constant information overload? Businesses are already faced with an increasingly educated plethora of demanding clients with a pre filtered attention span as a result of the constant information bombardment. Staying relevant is tied to a company’s ability to embrace and optimising internal and external digital transformation.

The human brain can adapt rapidly and the effects of convergence will only enhance the speed with which we process new information, learn, experience and so forth.

Fitting in the bigger picture

Osudio has developed across the years a strong know how in guiding companies through the most complex approaches in E-Business. The approach is very much centred around how people interact with technology in the quest to define the correct balance between cutting edge user experience and robust technology. 2018 will see further developments in our offering which will be advertised on the website, stay tuned for more to come.

The digital transformation in a simple graph
Source: Digital Transformation: A Model to Master Digital Disruption

Can you use some help with your digital transformation and its impact on your organisation? Contact one of Osudio’s experts for an informal conversation.

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Business Consultant

Ask Roy

January 22, 2018


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