Monday, November 9, 2015

Impact of disruptive IT on Business innovations

This blog is inspired by McKinsey's article on 10 IT enabled business trends for the decade ahead.

IT innovations like Social Media, Data Analytics are considered major disruptions in the last decade in IT enabled businesses .  These technologies have become major source of disruptions across different industries like Entertainment, health care,education , oil & gas domains. Technology innovations I believe are going to change the fundamental structure of these industries and can pose a threat to existing big players by minimizing the barriers to entry and by providing a level playing field.

Digital technologies like Facebook, Twitter, Pinterest have provided a open platform for businesses to maximize their consumer reach and do focussed customer targeting. Social media is one of the most talked about disruptions in marketing.  Let's examine health care industry for a while. Currently 31% of health care organizations have specific social media guidelines in writing. (source: Institute for Health). 19% of the smart phone users have at least one health app on their phone. 41% of people said social media would effect their choice of a specific doctor, hospital or medical facility. 60% of the doctors say social media improves the quality of care delivered to patients. Youtube traffic to hospital sites has increased 119% year-over-year.  These indicate social media has disrupted way health care is  administered and sought.

Online streaming services like Netflix, Hulu have made entertainment accessible at home 24 * 7 for anyone at low cost. These online streaming services have a competitive advantage on the traditional streaming services in terms of customer knowledge that they have. Using advanced data analytics and machine learning techniques, online entertainment platforms are able to provide content recommendations and tailor made content based to the users based on their choices in the past and also the choices of their friends.  None of the distributors were ready to distribute House of cards before its release as they assumed political drama would be of least interest at that point in time. But Netflix was intelligent enough to the know pulse of the audience preferences based on customer choices and interactions on their online streaming platform.  House of cards broke all the records and concepts that existed in the past and gained a huge traction and revenues.  This is a hallmark example of digital disruption in entertainment industry.

I would say Massive Open online courses (MOOCs) are one of the major technology disruption in education industry.  They have bought high-quality classroom experience to every home at absolutely no cost. Platforms like Coursera offer MOOCs from a variety of top universities, which students can take any time of the day at any convenient location. Most of the students who take these courses are working in the industry and make the learning experience unique and practical. These courses are posing a significant threat to low quality universities in terms of enrollment.  This is a major digital disruption in education industry making knowledge highly accessible.

The uniqueness about technology innovations is that it is difficult to predict the new markets that these technologies are going to create. Also the impact that disruptive technologies create cannot be measured against traditional metrics.  We have seen several IT innovations that have created new business avenues and we will continue to see them in the future.

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