Impact of digital disruption starting to be felt by business

28th October 2016

By: David Oliveira

Creamer Media Staff Writer

  

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Availability and business recovery company Veeam hosted its VeeamON Tour conference earlier this month, where trend analysis consultancy Flux Trends owner and top South African trend analyst Dion Chang discussed global digital and technology trends that are promoting the “on-demand economy” and disrupting traditional business operations.

He noted that every industry is experiencing disruption and will continue to be disrupted, owing to the rapid rate of technological developments.

“We are currently in a technology industrial revolution,” Chang pointed out, adding that digital technology and humanity were rapidly merging and would continue to accelerate to the point of technological singularity.

Technological singularity refers to the hypothesis that artificial superintelligence would usher in an era of unprecedented technological development that would surpass human capabilities.

Chang noted that companies with the greatest impact on today’s technology-driven world were those that responded quickly to customer demands and new trends.

Legacy companies, which had a life span of about 70 years, were finding it difficult to keep pace with the rapidly changing business environment, Chang pointed out, explaining that this was because of the hierarchical structures of companies that operated within in-house silos and were “too large to respond with agility to the ever-changing digital landscape”.

Conversely, agile companies, with an average life span of about 15 years, were able to remain relevant, owing to their ability to respond quickly to new trends and developments, further enabling them to evolve and pivot their businesses accordingly.

Chang noted that there were a number of industries that “were standing on a burning platform”, as digital technology was condensing value chains and “cutting out the middle man”.

For example, he pointed out that CD manufacturing had largely been displaced by online streaming services, creating a direct link between consumers and music artistes who use social media platforms to inform the public of their latest releases.

Another important technology trend is automation, mechanisation and robotics, which is resulting in a number of jobs becoming obsolete. Chang stated that developing nations are adopting these technologies too rapidly, which is proving detrimental to the poor in those countries.

Robots replacing people was not as far off as most people thought, he noted, highlighting that autonomous robot developer Savioke’s Relay delivery robot was being used in several hotels in the US for room-service duties.

Further, Chang added that, last year, financial institutions believed that online-fund management programs, known as robo-advisers, were a far-off development; however, this year, robo-advisers generated about $21-billion in the US.

Robo-advisers use algorithms to help customers with their investment decisions and Chang highlighted that their services were becoming increasingly popular, especially among tech-savvy millenials.


Chang highlighted that a number of megatrends materialised following the economic crisis of 2008.

The first, he noted, was digitisation and the migration of services and products to online platforms, known as ecommerce. Digitisation had significant impacts on the print media industry, which entered the digital arena by offering free content, he added.

Companies in print media were subsequently trying to reverse this by placing pay gates on their websites, said Chang. However, consumers had become used to receiving content free and could bypass these pay gates by searching for similar content on sites that did not charge a fee.

Social media, another megatrend, impacted severely on other media platforms, specifically magazines, Chang pointed out, adding that editors had lost their “voice of authority”, owing to the immediacy of social media and peer-to-peer dissemination and assessments.

Further, social media had also had an impact on consumer behaviour. For example, research found that a significant number of users who saved products on content-sharing application Pinterest subsequently bought the same product, Chang elaborated.

He added that, while several industries, including the retail industry, had been disrupted by digitisation, consumers had happily accepted the disruption, as was the case with transport network service Über.

“While legislators fight about disruption and argue whether Über is a taxi company or a technology company, or if their workers are full-time employees or independent partner drivers, consumers are happy to use the company’s service.”

Chang added that the retail food sector would also be affected by digitisation, owing to the adoption of on-demand food applications such as ÜberEats, which was launched in Johannesburg last month.

He argued that the most significant on-demand disruption to the retail industry would be drone- based delivery services, such as global ecommerce company Amazon’s Prime Air service, which uses drone technology to deliver products to a customer’s location.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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