Posted by: nuleadership | April 14, 2014

Disruptive Technology in Today’s Business

outsourcing-multiple-pics

In life, sometimes it is the simple things that count, despite modern technology. In the next few months, I will be able to see 3-4 of my books published. Traditionally, it takes most large publishing houses 12-18 months before their books are published. As an independent publisher, I learned that the speed of products to the market place is a good way to beat a large competitor.

In fact, my success relates to a simple website called Elance.com, a freelance website that allow customers to solicit work from a variety of outsourcing services, which include programmers, designers, office support, translators, marketers, researchers and many other disciplines.

Elance.com allows a business to post a job opening and invites freelance workers who believe they have the requisite skills for the job to make a bid. The company charges a $10 fee to each business to post a job and also takes a small portion of what gets paid to contractors. Through this website, I have found some of the most talented individuals from across the world. For these services, it is a buyer’s market. Some people would argue that it is all about buying cheap labor for profitability.

In this scenario, developed countries appear to be exploiting underdeveloped countries. This is not always true. I have paid more in the past for the best talent. With that said, potential employers see a website that attracts over 500,000 talented freelancers. For the freelancer, there is an opportunity to bid on 48,000 jobs, worth $480K.[1] Therefore, a differentiating strategy can defeat a low-cost strategy on a global playing field.

Technology must be a management tool that is used strategically. Clayton Christensen, author of The Innovator’s Dilemma, provides a framework for understanding the interrelationship between technology changes and a business success. Christensen demonstrates how successful companies have been overtaken by small disruptive technologies.

http://www.youtube.com/watch?v=KGzXWO_anLI

The cell phone, undermining the profitability of the established communication networks such as AT&T, further showcases the impacts of disruptive technology. Sadly, more executives are unwilling to think strategically due to the wrath of their investors and financial pundits.

For example, Amazon’s revenue grew in 2012, but the details were lacking. Amazon.com’s revenue rose to 17.4 billion (35% increase) in the fourth quarter. However, it fell short of Wall Street predictions. According to VentureBeat, Amazon sold as many as 6 million Kindle Fires and its older tablet prototype.

Given this reality, the Fire would move ahead of Android tablets from Samsung and Motorola, making it only second to Apple’s iPad. Analysts were concerned that the $199 Fire would not make a profit. Additionally, Amazon.com is spending capital on clouding technology.

Maximizing profits on Fire as an industry leading tablet is a near-term strategy. However, CEO Jeff Bezos appears to have disappointed Wall Street with a long-term perspective instead of sacrificing shareholders with profits in the near term.

Innovators take note of disruptive change as positive turbulence in the market. John Gamble and Arthur Thompson, authors of Essentials of Strategic Management, explain, “Understanding the nature of competitively important resources allows managers to identify resources or capabilities that should be further developed to play an important role in the company’s future strategies.” Therefore, organizations which do not understand the importance of making sustainable growth by being more efficient will not be successful over the long-term.

Please discuss application of this topic in your organization and industry.

© 2014 by Daryl D. Green

 

[1] Elance.com

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Responses

  1. Apple’s mainstreaming of tablet computing has been a boon to Pilot’s install teams. The efficiencies proffered by Apple’s disruptive / exceptionally mobile computing device has allowed Pilot’s tech personnel to save significant time-costs when working remotely.

    The problem with the early adoption of these devices was their incredibly high total cost of ownership. These early tablets resulted in costs related to deployment, training, support, and development of apps in order to be functional. As a result, early adopters found that by the time the iPad was becoming a usable tool it was blown out of the water by the much improved second-generation iPad.

    Management should be weary when deploying new technology. The iPad lesson take away is that development teams should always be given adequate time with new technology before its potential implementation.

  2. The closing paragraph of the blog sums everything up into one vital statement. “Organizations which do not understand the importance of making sustainable growth by being more efficient will not be successful over the long-term.” As a part of AT&T, I see decisions made according to this first hand each and every day. From my work experience with this company efficient means “mobile”. With their new campaign “mobilizing your world”, AT&T has major goals for the company in site of new technology and advancing the mobile world. Another company which exemplifies profound growth by implementing efficient methods and using technology to their advantage is the Lean Enterprise Institute. In an interview with manager John Shook he discusses the many way of being efficient and deciding when to kick out the extra waste. That is also a great way of being efficient in an organization, which also serves as a method to rise above competition.
    Logue, A. C. (2014). Trimming the fat. Entrepreneur, 42(2), 74.


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