Impact of Disruptive Technology in Businesses

Disruptive technology is likely to play a major role in improving the quality of life of people, global economies, business models of companies. Technology will be accepted if it contributes into the value chain of the company. Few disruptive technologies are discussed below. Case studies of couple of companies such as SFEG and Amazon are taken to understand the impact of disruptive technology in their business. The steps taken by a business leader such as using big data analysis, acquisitions etc to take advantage of disruptive technologies coming their way Lastly, supply side economies can become a primary economic parameter in coming future if the technology enables the manufacturers produce in abundance.

          Technology is evolving at a very fast pace. The advancement in technology is changing the way we work, live and do business. There are two types of innovations in technology: Sustaining and Disruptive. Sustaining technology is the technology which innovates successively from time to time. Disruptive technology is a newly developed technology that creates much more value than the existing technology and has the potential to drastically change the way to work, live, do the business and increase the economic output. A disruptive technology may take longer time to develop than the existing technology had taken and it involves more risk that existing technology, but it can achieve a faster penetration and replaces the established technology leaving a huge impact. Disruptive Innovations improve products or services in ways that the market neither demands, nor expects, but which become rapidly recognised as the optimum consumer choice. It therefore makes critical for business and leaders to understand the technology, build their technical proficiency , implement technologies which matter to them and gain an advantage into the way they manage their organisation.

          A disruptive technology changes a product that was generally so expensive and complicated that just a few number of individuals with a considerable measure of resources had access to it. A disruptive technology makes it more open and affordable to a much bigger population. At a point when the innovation that has the potential to change an industry develops, established organizations mostly consider it to be unattractive: it's not something which their customers need, and its anticipated profit margins aren't adequate to take care of huge organization technology expense for it. Subsequently, this new innovation gets overlooked. After some time another organization manages to bring the innovation to a new market. Once the disruptive innovation establishes, small scale innovation rapidly raise the technology’s performance on attributes of that of mainstream customers’ value.

          Every CEO must consider which disruptive innovations might influence their value chain and plan to respond to them or figure out whether they should use it in their business. They should understand their capability and limits to meet the outside dangers and opportunities of digitisation.

          The invention of the Spinning Jenny 250 years back tremendously expanded the speed with which cotton could be transformed into yarn, altering the textile business and introducing the industrial revolution. The revelation of penicillin in the mid 1900s permitted already fatal contaminations to be dealt with, opening the door to modern surgical methods. In the mid-twentieth century, the creation and development of the transistor started an innovation revolution that is still driving economic and social development.

          Let us discuss some of the technologies which have produced great disruption in business and global economy and what are the risks they have –

1. Wireless sensor network – They are spatially distributed autonomous sensors which monitor physical or environmental conditions such as temperature, sound, pressure etc. and pass this data through the network to a main location. Sensors can be used in Defence, Health care monitoring, Air pollution monitoring, Forest Fire detection, Landslide detection, Water quality monitoring, Machine condition monitoring, These sensors have significantly added value to the economies, business models and people.

2. 5D Printer - With the help of internet it is possible to share the blueprint of a product with anyone at any place in the world to be replicated by a 5D printer . An additive manufacturing route that enables programming and fabrication of synthetic microstructures within a five-dimensional design space. Besides the 3D shaping capabilities of additive manufacturing, such a design space also includes local control of composition (+1D) and particle orientation (+1D).5D printers are used widely in apparels, automobile, medical, art industry.

3. Cloud - The use of computer hardware and software resources to deliver convenient, ondemand network access and services over the internet to a shared pool of configurable computing devices. Cloud can prove to be of immense help in big data analytics and mobile computing as compared to other traditional alternatives of IT infrastructure. Its others use are file storage, cloud bases backup, disaster recovery. Potential use of this technology is in IT services, education, banking etc.

4. Internet - Increasingly inexpensive, mobile and computing gadgets with the help of internet network has brought advantages in all the sectors. Online shopping and Banking, Virtual Private Network, VoIP, Digital advertisement, E-commerce industry has led to an increase business, improved efficiency of business activities and ultimately added value in the life of people. The digitisation enables the projects and processes to increasingly manage information in digital form, whether that information was born digital (e.g. email, Word doc, Excel spreadsheet, eForms) or was converted from hardcopy (e.g. scanned documents). The key benefit of digitisation has been in improving the efficiency of core business processes. Capturing documents and data at the point of origin or receipt into an organisation allows for many tactical advantages like improving accessibility to information, integrating business systems, using Big Data for enhancing the process of Big Data

5. Internet of Things - The Internet of Things (IoT) is the system of identifiable objects and their virtual representations such as—gadgets, vehicles, structures and different things which are inserted with electronics, software, sensors, and network connectivity, which empowers these items to gather and exchange information . There can be dangers as well, as the connection of billions of smart devices can represent a real security threat.The areas in which IoT has a wide application are media, environmental monitoring, infrastructure management, manufacturing, energy management, medical and healthcare systems, building and home automation, transportation etc.

6. Advanced Robotics - Advanced Robotivs corresponds to increasingly capable robots or mechanical instruments, with improved ability, and knowledge. These innovations can convey astonishing advantages to society, including mechanical surgical frameworks that make methodology less intrusive, automated prosthetics and "exoskeletons" that restore elements of amputees and the elderly. These disruptive technology manages automated machines that can assume the position of people in hazardous situations or manufacturing processes, or take after people in appearance, behaviour , and or cognition. The robots can carry out tasks which are very difficult, monotonous or hazardous for human beings. Both programmable and reprogrammable robots are used to carry out certain tasks with high precision and accuracy in industries, aerospace, healthcare , military etc.

7. Renewable Electricity - Renewable sources, such as the sun, wind, rain, tides etc are put to use to generate electricity resulting in reduction of harmful climate impact. Advantages of renewable electricity includes environmental benefits, reliable energy source, economic benefits, stabilized energy prices etc. This disruptive technology can help business in cost-cutting and improving efficiency.

8. Automation of Knowledge Work – Knowledge work automation is the utilization of computers to perform activities that depend on complex analyses, subtle judgments, and creative problem solving.These capacities not just extend computing into new domains, it additionally helps make new connections between knowledge workers and machines. Along these lines, instead of assigning a team member to draw all the information on the performance of a certain product in a particular market or sitting tight for such a request to be turned into a job for the IT department, a manager or executive could simply ask a computer to provide the information. This has the potential to provide quick access to information and raise the quality and pace of decision making and performance.

9. Autonomous or Near-Autonomous Vehicles - The vehicles which can navigate and operate autonomously or semi-autonomously in various situations, using advanced sensors and systems of communication from machine to machines. The use of these vehicles are in farms as drones to perform crop surveys and field vigilance. Architects, Real estate agents use drones to scan building, form maps etc. Drones are used by many companies for delivery of products to the customers. These autonomous or near autonomous vehicles have made a large increase in efficiency by reducing man-power and cost.

10. Neuromorphic technology - Neuromorphic chips aim to process information by mimicking the human brain’s architecture to provide a ramp up in a computer’s thinking and responding power in a fundamentally different way from its conventional hardware. Potential applications include: drones which can process and react to visual signals more precisely, smart cameras and phones, information crunching on a scale that might open the mysteries of financial markets , banking sector, e-commerce sector,weather forecasting.

          Let's take few examples to understand this topic -

Case Study 1 - Scott Fetzer Electrical Group based in U.S. provides intelligent power solutions with the help of innovative technology in designing, delivering and manufacturing high-quality electrical power products. They employed a Universal Robot(UR5) to perform pick and place tasks. It has the speed and precision of a standard industrial robot with the ability to move around and work next to humans. It is also be used for data collection in the live testing of new designs and push the design faster into production.They have won orders against Chinese competitors and brought back work that used to be sourced in China owing to the advantage of low cost and faster production. The advantage of employing UR5 is to automate monotonous and potentially dangerous tasks. UR5 being a pace setter, reduced implementation time up to 50% for SFEG.

          Value of the global market was up to US$10.7 billion.In 2014, robot sales increased by 29% to 230,000 units and it is the highest level ever recorded for one year. Between 2010 and 2014, the average robot sales increased by 17% per year (CAGR). Main drivers of the growth in sales of industrial robots were automotive industry and electrical/electronics industry. In 2014, the average robot density in the following regions was: 85 in Europe, 79 in the Americas, and 54 in Asia

Case Study 2 – Amazon is one of the biggest e commerce giant, Amazon has always used data analytics to their advantage. Talking of the days, a decade back, the companies used to be reactive to the demands of the customer. Now-a-days companies try to predict the demand of the customers using the data generated by the customer over internet.The company tries to ship goods even before customer makes a decision to buy it, all based on their predictive big data analytics. It uses one on one item collaborative filtering on many data points such as order history of customes, customer’s wish list, products reviewed by customer, location of the customer etc. to customize the customer browsing experience. Amazon utilizes Big Data to track and secure its billions of items in its retail store that are laying around it 200 distribution centers around the world. Amazon stores the item list information in S3 which is a straightforward web administration interface which is utilized to store any amount of information at any time and from anyplace on the internet. It can compose, read and erase objects up to 5 TB of information each.

          Amazon has given a lot of attention to Big Data recently over the past 18 months and Amazon has grown large as a result over the past couple of years. If we analyse the performance in 18 months of Amazon through the Return on Investment of Amazon, we can see a increase in percentage of ROI in each quarter. The investments can be many along with the Big Data, but the Big data has surely played a major role in this performance of the Amazon.

          The business leaders should have enough knowledge of the upcoming technology either to prevent their business from the side effects of the technology or to benefit the company from the same.Leaders should disrupt themself before the technology disrupts the business. In this age of information technology and artificial intelligence, every company is a technology company now. Companies should look forward to build partnerships and supplement its strengths. The upcoming e-commerce industry are aggresively involving themselves in mergers and acquisitions to increase their spectrum of business. The data collected from the customer should not be wasted and rather turned into knowledge using big data analytics. Supply side economics may become the future parameter of economics and the willingness of the producers to create goods and services will set the pace of our economic growth and replace the the demand side economics . Demand side economics may turn out to be a secondary economics in coming future. Supply side economics can happen mainly with the use of disruptive technology, which can help in the production of goods and services at large scale and meet the demands of the over growing population. Conclusion – The technology surely has an impact on the better efficiency of the business. Business leaders ought to keep their organisation techniques upgraded despite persistently developing disruptive technology, guarantee that their associations keep on looking ahead, and use advancements to enhance internal performance. Disruptive innovations can change the diversion for organizations, making totally new products and administrations, and additionally moving pools of worth between makers or from producers to purchasers.

Sources – 1. International Federation of Robotics website 2. McKinsey reports on technology 3. CSIMarket 28.61 24.49 53.77 58.43 0 20 40 60 80 Dec 31 2014 March 31 2015 June 30 2015 Sep 30 2015 ROI(%) Month , Year Amazon ROI