Looking at the most recent group, Generation C, Jessica Dye said this stood for con- tent but commented in her website that it could stand for creativity, consumption or connected. Roman Friedrich and his colleagues at the international management consultancy Strategy& (previously known as Booz & Company) stated that the ‘C’ rep- resented connect, communicate and change. The key factor is that this demonstrated the lack of consensus with these terms.
1.4 DIGITAL DISRUPTION Every era sees disruption from newer technologies that replace outmoded methods of delivery, service, production or communication. The introduction of the internet removed the need for the telex machine and soon replaced fax machines as methods of urgent and business communication.
Although the phrase ‘digital disruption’ probably came about following the creation of the law of disruption, named by journalist Larry Downes (Downes, 2009), we don’t have an official definition, so we could describe digital disruption as ‘major mar- ketplace changes or sector transformation, following the application of technology’.
Bain & Company, one of the world’s leading management consultancy firms, has explored the application of digital disruption across industry sectors, as shown in Figure 1.2.
Digital disruption started with the introduction of the internet and initially we had ‘brochureware sites’ or what Fareena Sultan and Andrew Rohm described as ‘the com- munication of basic Web-site content’ (Sultan and Rohm, 2004, p. 8). We gradually moved into online shopping, and today Amazon has extended the disruptive shopping experience with the ultimate disrupter – the Amazon Dash Button, where shoppers simply press a button to re-order specific products (Amazon, 2017).
The internet has evolved from super-slow dial-up to super-fast with data being retained and easy to access. The internet has only disrupted our lives in the last few years, with the rollout of broadband at consumer rather than business level, which enabled faster and easier access for mass markets (see Discover More on the Past and Future History of the Internet).
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R&D Manufacturing Distribution Retailing Sales &
Oil & gas
Oil & gas
Industrial goods & services
Tech & consumer products
Industrial goods & services
Healthcare Internet of
Digital data exchanges
Automation and digitalization of
Figure 1.2 Application of digital disruption across industry sectors
Source: Bain & Company, 2015. www.bain.com/bainweb/media/interactive/disruption
DISCOVER MORE ON THE PAST AND FUTURE HISTORY OF THE INTERNET Written by the who’s who in internet development, ‘The past and future history of the Internet’, published in Communications of the ACM, provides great background information to the early impact of the internet and how it evolved (Leiner et al., 1997).
All digital disruption is driven by technology, especially as it becomes smaller, faster and easier to access. Examples of technology-driven digital disruption include:
• 1995: Amazon disrupted the traditional book-selling market
• 1997: Netflix disrupted the traditional video-hire market
• 2008: Airbnb disrupted the accommodation sector
• 2009: Uber disrupted taxi services
What is interesting to note is that some disruption takes years to gain scale. As an example, Amazon is heralded as the next new easy-to-use online supermarket, yet it has existed for over 20 years.
Activity 1.2 What’s Your Digital Disrupter? 1. Thinking about one of your favourite brands, what innovations could disrupt and change how
2. Describe and assess how disruption would bring benefits and differentiate the brand.
See Template online: Assessment of Disruption
1.5 INTERNET OF THINGS The Internet of Things (IoT) (see Key Term) is one factor that has contributed to digi- tal disruption. Understood as connectivity technologies where devices are joined up, the IoT ecosystem relies on sensors such as barcodes and RFID tags (radio-frequency identification) within a WiFi zone. From this it can identify physical properties such as: Are there people in the building? How is your health? Is your heart beating at the usual rate? What’s the date on the barcode? What’s the thermostat temperature? This is combined with autonomous machines being accessed via a remote control source such as an app on your phone or your wearable device.
Having identified the tags and what’s happening means that we are more intelligently using the data. One commonplace example is a Satnav system that finds the fastest way to your destination, suggesting alternatives routes to avoid congestion. Some Satnav systems have greater connectivity where marketing is involved, showing the nearest Starbucks, BP petrol station or McDonald’s.
IoT has developed dramatically in healthcare and medical devices, such as pacemak- ers that can be adjusted while the patient is at home and the cardiac consultant is in their office. This does scare some people (what if it goes wrong?) and there have been rumours about issues with US presidents and their pacemakers being hacked!
In domestic situations we are already witnessing the start of how the IoT is develop- ing, with devices like Google Home and Amazon Alexa that can connect to lighting, heating and security within the house. This means if you leave the house and can’t remember if you left the lights on or not, you can check the app and switch off the lights. Equally if you’re arriving back late, you can switch on the lights, the heating and the oven 10 minutes before you arrive home.
Based on a discussion group, Professor Peter Verhoef and many colleagues explored consumer connectivity and they created a framework for a consumer-centric IoT, as shown in Figure 1.3. This is a simplistic matrix approach where they have used two variables – ecosystems and interactions – and from this identified four business models.
In ecosystems they have noted the idea of open and closed systems. For business model (I), which is a closed system with utility, they used Amazon Echo as the exam- ple. It is closed as it is only available in a specific geographic area, it is linked to an individual or family account and it may be passcode protected.
Open networks are available to others, such as the smart meters which are shown in model (II). This means that instead of the requirement to stay at home when the
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electricity, gas or water meter usage is checked and recorded by an engineer, this could happen remotely from the supplier’s office. Model (II) facilitates better energy use as washing machines could be intelligently managed and switched on when there is less power usage on the grid, or timed to complete the wash cycle five minutes before the alarm clock goes off.
The group discussed levels of interaction between business and consumers. Business model (III) is a closed system for use by consumers. In this example, they used Nest, the technology company that enables consumers to connect devices and send com- mands remotely from an app to switch on the lights, measure the amount of heat, light and power used that month or check the security cameras.
Model (IV) explored consumers interacting with each other on a peer-to-peer basis. So if there is a day in your calendar when you are not using your car, one of your neighbours could rent or borrow it, and their example was Relay Rides, a firm that enables this functionality in the United States, similar to Airbnb, but for cars.
Amazon Echo Nest
Figure 1.3 Consumer-centric IoT business models
Source: Verhoef et al., 2017, p. 5
It is an interesting model, which, in a utopian world, would work well, but there may be privacy concerns about sharing your calendar with your neighbours – do you want them to know when you’re away or at home all day?
Amazon Echo had challenges when initially launched as children were making pur- chases via their parents’ Amazon accounts. Amazon has solved this with the option to enter a passcode before confirming purchases. There are additional concerns about the devices being hacked so that snoopers can monitor your conversations. The dif- ficulties ahead may be about the fear of use and potential misuse of systems, rather than the technology.
As the technology evolves and as we become more comfortable with its use and security improves, we could use the IoT in other ways, for example:
• Scanning food into the fridge, which will tell you what’s needed for the menu that night before sell-by dates are reached – less food waste.