Disruption is a word many business managers may not relish hearing, expect perhaps in the past tense as in, 'We have successfully gotten through the disruption stage'.
But it became something of a running sub-theme at NetSuite's SuiteConnect event in London this week, to the point where one keynote speaker, Nathan Furr, Professor of Strategy and Innovation at INSEAD, took on the task of telling delegates about some strategies that could help them not just avoid it, but actually exploit it to their advantage.
It would be easy to assume that, as customers of one of the first vendors to offer core business management applications as a cloud service, NetSuite users would readily see themselves as on the bleeding edge of disruption, if not well beyond it. But even if that is true, they will then know that there is always something new to learn, and the lesson Professor Furr had in mind is another long-running meme of the cloud services world – hybridisation.
But it was not the hybrid of the mixed public and private cloud environments, with or without a soupcon of on-premise infrastructure thrown in for good measure, he was talking about. What he suggested to the delegates was taking a long term, objective look at where their business stands at the moment, what parts of it might be targets for disruption, and what might be coming at them over the horizon that could prove to be the disruptor.
This is about not fearing disruption, nor trying to avoid it. But neither is it about running towards disruption misty-eyed and wearing rose coloured glasses, either. That is the way that many businesses have dug expensive holes and jumped in them. It is, however, about seeing the point – and the time – when the disruptor and the disrupted might just be hybridised into what he termed a 'tool to conquer change'. Furr explained:
This is the disruption dilemma. There is a need to look at the time it can take for a development to become genuinely disruptive. The temptation is to say that disruption must be done now and set about implementing it too early, well before the marketplace is ready to accept it or the technology is capable of delivering at a scale or reliability that make business sense. There is a right time to do this.
There are already some classic examples of successful hybrid-based disruptions in widespread use already. The professor pointed, for example, at the Toyota Prius, which combines the old technology of internal combustion engine with the new one of battery-powered electric motors. Despite the appearance and popularity of the later Tesla cars, the now widely adopted hybrid model first seen in the Prius is still the most practical mix of the technologies, with internal combustion engines for long runs, flexible speed options and, perhaps most important of all in practical terms, widely available refuelling points that offer a short cycle time.
This is then combined with battery powered electric motors for short-range, low-speed, start-stop requirements, a role where they are far more efficient than traditional car engine technologies. The combination can also exploit energy recovered under braking – usually when using old technology motive power – to recharge the batteries of the new technology motive power.
And if one looks at the state of play in what most people expect to be the final format of the disruptor – fully electric cars – it is easy to see that there are still many years of development to be gone through before they really match users’ needs in the way that a typical Ford or General Motors car has done for many years.
They are either very small single seater units designed to get someone the 10 miles or so to the office and back home, in a city where speeds in excess of 30mph are rarely achievable. As a single purpose option they work, but are largely impractical. At the other extreme are 'real' cars, even fast ones. But they tend to be expensive and have an adequate range at best - and they all still suffer with the Achilles Heel of battery charge cycle times.
This is a good example of the key lesson Professor Furr was keen to deliver. Engaging with the disruptor early – not too early but early enough – created the opportunity to develop a hybrid that advanced the existing product or technology in need of disruption. And by selecting those elements of disruptor technology that have reached the point of being fit for purpose – even if that is only a sub-set of the aspirational capabilities its developers see for it in a future time – a hybrid intermediary can be developed that helps take the marketplace from the old to the new at a pace they can understand and go with.
And as the Prius and its followers have demonstrated, that can be a market that succeeds for a good few years.
Furr sees IT as an area now ripe for such hybrid developments, though his first chosen example – the way the Microsoft Surface Pro hybridises the best aspects of the laptop and tablet – is actually more about slicing, dicing and re-assembling technology in a different order. The key hybrids in IT will be in using digital transformations to create new ways of doing business. The technology selected to achieve it will be secondary.
An example of what he means is the hybrid business model established by hand-tools maker and seller, Hilti. The company’s business had been a straight business-to-X model (where `X’ equals either business tradespeople or consumer end users). But it spotted the opportunity to use the cloud as lever to open up a variant on the fleet management model for the tradespeople. Here, it now provides a service for them which essentially rents the tools and always ensures that they have both the latest/greatest tools and full maintenance and support facilities available, said Furr:
The idea is to turn what appear to be business threats into business opportunities. Perhaps the best example is Apple’s Steve Jobs who, when the iPhone app store was being proposed, resisted the idea that it should be opened up to third party apps vendors. Persuading him that it was a good idea meant that Apple became the classic example of building and owning the platform that all apps vendors targeting a marketplace have to go through.
How does this feed back into NetSuite's worldview? Furr's themes were picked up by Netsuite CEO Zach Nelson in his own keynote at the conference:
Every company is now a cloud company using the disruptive power of data aggregation and manipulation. The cloud enables entirely new capabilities, usually because collaboration is much easier in the cloud. Be aware that change is the only constant.
He suggested that one specific area to consider is how and where it might be possible to embed AI into business processes, particularly when embracing the ideas that underpin hybrid business models. These days, a product-based company has to also be a service-based company and also be able to provide all that `as-a-service’. So business systems must now be able to cope with that, and must be customisable and re-customisable quickly and easily.
This is a good example of how the 'T' of IT is now no longer the issue – and with SaaS delivery models is genuinely irrelevant to users and solely the concern of companies like NetSuite. Now it is all about the 'I' and the imagination and wit of users to exploit the hell out of it. It is also a role model for other tech vendors in moving customer thinking beyond the technology.