INTRODUCTION TO DISRUPTIVE TECHNOLOGY

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INTRODUCTION TO DISRUPTIVE TECHNOLOGY

Disruptive technology is an innovation that significantly alters the way that significantly
alters the way that consumers, industries, or businesses operate. A disruptive technology
sweeps away the systems or habits it replaces because it has attributes that are recognizably
superior. Recent disruptive technology examples include e-commerce, online site news, ride-
sharing apps, and GPS systems. In their own times the automobiles, electricity service, and
televisions were disruptive technologies.Clayton Christensen popularized the idea of
disruptive technologies a magazine in 1997. It has since become a buzzword in startup
businesses that seek to create a product with mass appeal. Even startups with limited
resources can aim at technology disruptions by creating something entirely new, whereas
established company tend to focus in what they do best and pursue incremental
improvements rather than revolutionary changes they cater to their larger and demanding
customers.Disruptive technologies are difficult to prepare for because they appear suddenly,
there are very few cases where we can be prepared in advanced.

POTENTIAL OF DISRUPTIVE TECHNOLOGY

Risk taking companies may recognize the potential of disruptive technologies in their own
operation and target new markets that can incorporate it into their business processes. These
are the innovators of the technology adoption cycle, whereas there will be other companies
that may take a risk-averse position and adopt an innovation only after seeing how it
performs for others. Companies that fail to account for the effects of disruptive technology
may find themselves losing market share to other competitors who have found ways to
integrate the technology into their operations.

BLOCKCHAIN AS AN EXAMPLE OF DISRUPTIVE TECHNOLOGY

Blockchain is a technology behind bitcoin, it is a decentralized distributed ledger that records
transaction between two parties. It moves the transactions to a cryptographic network. It uses
peer-to-peer consensus to record and verify transactions removing need for manual

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verification.Blockchain as a technology has enormous implications for financial institutions
such as banks and stock brokerage firm. Ex. A stock brokerage firm could execute peer-to-
peer trade..Confirmations and totally removing the need for custodians and clearing houses,
which will reduce financial intermediaries.

DETERMINING TECHNOLOGICAL TRENDS BY A HISTORICAL REVIEW

The advancements in technology have changed the ways in which we live our lives today.
One way of looking at the technological advancements can be from the perspective of
hardware and software changes that have taken place in information technology. Another
way of understanding the evolution of IT is to look at the specific contributions of
technological inventions like digitization and the growth of digital data being created and
shared.

The computers have changed drastically from the era of their invention to the present era.
One way of classifying the computers can be on the basis of generations, where in each new
generation the circuit has become smaller and more advanced than the previous generation.

1.) First Generation (1940-1956) Vacuum Tubes

The first generation computers were enormous in size taking up the entire room and used
vacuum tubes for circuitry and magnetic drums for storage. They consumed a great deal of
electricity and in turn generated a lot of heat. In 1946, ENIAC (Electronic Numerical
Integrator and Computer) was built by two Americans Eckert and John Mauchy. UNIVAC
and ENIAC are examples of first generation computers.

2.) Second Generation (1956- 1963) Transistors

In this generation transistors were used in place of vacuum tubes which were a huge
improvement over the previous generation as transistors were cheaper, used less electricity,
faster and produced negligible heat as compared to the vacuum tubes. Moreover the second
generation computers moved from binary language to assembly languages which allowed
programmers to specify instructions in words. Early versions of COBOL and FORTRAN
(high level programming languages) were developed at this time. Examples of second
generation computers are IBM 1620 and CDC 3600.

3.) Third Generation (1964-1971) Integrated Circuits

The third generation computers used IC’s which consisted of large number of transistors,
resistors and capacitors. This made the computer smaller in size, more cost effective and
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reliable. Computers became accessible to a mass audience because of their size and cost.
Examples of third generation computers are IBM- 360 series, Honeywell – 6000 series , TDC
-316 etc.
4.) Fourth Generation (1971- present) Microprocessors

The microprocessor (a single chip that could do all the processing of a full scale computer)
was invented by Marcian Hoff which is a feature of the fourth generation computers. The
reduced size and cost lead to the development of the first personal computers. In 1976 Apple
II, the first personal computer was developed and in 1981 IBM introduced its first PC.
Concept of internet also emerged and later on other handheld devices were developed.

5.) Fifth Generation (present and beyond) Artificial intelligence

Artificial intelligence is a branch in computer science that interprets the methods of making
computers think like human beings. AI includes robotics and development of expert systems
to make decisions in real life situations.

Another way of understanding the evolution of IT can be according to the specific

technological inventions which have occurred.

1.) The development of PC made giant calculations easy and helped in digitizing transaction -
oriented business like airline reservations. But still most of the computer related activities
involved interaction between a person and a computer. PC’s helped in digitizing major
businesses and helped in their growth.

2.) The major evolution took place when PC’s were connected to each other via LAN (Local
Area Network) and later on via WAN (Wide Area Network).LAN helped in connecting
devices in the same building whereas WAN helped in connecting various LAN’s and is
relatively expensive and faster. Computer networks helped in creating and sharing of data.
With so much of data the company improved its decision making through data mining. There
was a rise in the competition among the players focussed on one IT component as opposed to
end to end business solution model. Example – Intel in semiconductors, Microsoft in
operating systems etc.

3.) The next major leap happened with the invention of the World Wide Web (www). The
World Wide Web helped in creating and sharing of data across the globe. It helped in
connecting millions of people.

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The upcoming technologies which are evolutions in the field of IT which we are currently
experiencing also are the cloud, IOT, big data, blockchain, robotics, Business intelligence etc.

HOW TECHNOLOGICAL DISRUPTION HAPPENS

Before understanding how technological disruption happens, it is important to know what
exactly a disruptive technology is. A disruptive technology is the technology which makes
the existing technology obsolete and creates a new market for the new technology. Today our
world is full of disruptions with new ideas everywhere. A disruption is not related to an
individual only but is a function of networks.

THE INFLUENTIALS

The most prominent explanation available for disruption has been that certain people with
great influential power can change the way one thinks and acts. But this is a myth since
empirical research has shown that influential people are not necessary to create social
epidemics. Changes occur when individuals act in unity.

THE THRESHOLD MODEL OF SOCIAL CHANGE

The model explains that influence is a function of groups rather than individuals. For
example when we visit a new country and encounter people with strange ideas we might not
agree with their ideas in the first instance but later on we will find ourselves agreeing on
majority of the issues. This was proved by a study done by Solomon Asch in the 1950’s.
Taking this concept further we can understand that an idea takes hold among the people who
are most receptive to it and as the number increases, more people join in.

For example when a person watches a funny video and passes it on to his friends, they, in
turn share it and in this way the video becomes viral. As human beings we take cues from our
environment and we start acting the way majority of people act.

THE DIFFUSION MODEL OF INNOVATION

The diffusion of innovation model reveals that an innovation’s adoption follows a particular
pattern. The rate of adoption has normal distribution i.e. slow at first, then accelerating,
peaking and declining .It classifies individuals into 5 groups on the basis of their preference
for adoption of an innovation:

1.) Innovators (2.5%)

2.) Early adopters (13.5%)
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3.) Early majority (34%)

4.) Late majority (34%)

5.) Laggards (16%)

The disruption does not happen all at once but it happens over a period of time when a small
portion of enthusiasts try it first and then spread it to others who are reluctant. Moreover the
role played by media and the progress of disruptive technology and associated innovations
are equally important. There are stages in perceptions of technologies that have the potential
to enable disruptive innovation:

1.) Innovation trigger – in this stage the technology enters the consciousness of public and
creates interest.

2.) Peak of expectations - in this stage the supplier launches the product for innovators and
early adopters thereby creating excitement.

3.) Trough of disillusionment- in this stage the media coverage features the challenges rather
than the opportunities of innovation.

4.) Slope of enlightenment- early adopters get the benefits and knowledge grows about how
to innovate successfully.

5.) Plateau of productivity – in this stage there is mainstream adoption because benefits are
shown and the risks of innovation reduce.

DISRUPTIVE TECHNOLOGIES: UNDERSTAND, EVALUATE, AND RESPOND

A disruptive technology supersedes an older technology, product or process and has superior
features. It alters the way businesses and industries operate. Recent examples of disruptive
technology are ride sharing apps, e- commerce etc. In their own times television, electricity,
automobile were disruptive technologies.

Disruption is driven by a number of factors of which five dimensions are as follows:

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  Cost - the new technology makes old one uncompetitive in terms of production cost as
the old ones become unprofitable and the new ones become cheap.
 Quality – the new technology improves the quality of products and services.
 Customers- changes in consumer preferences make previous products or services
unattractive.
 Regulation- with new technology in the market, the new laws does not permit the old
ways of conducting business. Example environment or labour laws
 Resources – most of the important resources are not readily available for a variety of
reasons, one of the reasons being exhaustion of natural resources.

In reality the above mentioned factors overlap. For example, the combination of changes
in cost and quality significantly change the value of existing products or services relative
to new ones. Industry leadership in terms of technology moved from Sony to Philips, as
‘walkman’ technology was replaced by ‘compact CD’. Further development of
compression technology, especially MP3, enabled further changes.

The disruptive innovation can be at various levels:

 Industry segment
 Industry structure
 Social system

POSITIVE AND NEGATIVE EFFECTS OF DISRUPTIVE TECHNOLOGY

‘Digital disruption’ is a term that seemingly combines hope and fear into one catch-
all phrase. After all, ‘digital’ is positive, conjuring images of newer, faster, better and
more awesome technology. ‘Disruption’, on the other hand, is inevitably negative in
its connotations, bringing to mind thoughts disturbance and interruption.

POSITIVE EFFECTS

1) GO SOCIAL- The increasing number of channels which customers expect to interact

with businesses, including text, email, chat, and the various social media platforms, to
name a few. This has led directly to the desire for omni channel contact centers. These
this channel can multiply the effects of a bad customer experience – simply due to the
audience - it can do the same for good service. More importantly, a new generation of

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 tech-savvy young customers are now entering the market, and for these Millennials,
social media is often the communication channel of choice.
2) GET PERSONAL- Analytics can then make the relevant connections around
customer preferences that will provide the business with a picture that allows it to
anticipate customer needs precisely. And of course, once you can anticipate their
needs, you can personalize the offerings you provide to them, which creates increased
value for both the business and the consumer. The new digital world has also erased
concepts like normal office hours, and customers today expect 24/7/365 support; they
expect to be able to contact the enterprise anytime, anywhere and via any device.
Fortunately, disruptive new technologies like robotic process automation and artificial

intelligence are enabling chat bots which can provide exactly such a service .
3) IMPROVE INTIMACY- Video chat is another technology that has had a disruptive
effect on the contact center because it requires an entirely different range of skills to a
standard phone call. Not only does it mean your agents must be smart and presentable,
but they need to be able to control their facial expressions while correctly reading
those of the customer.

However, despite these challenges, the opportunity presented here is fantastic. As

video calls move towards true live support, the face-to-face contact with the client that
this ensures presents the contact center with a wonderful chance to establish a much
more intimate relationship with each customer – one that can be leveraged to increase
loyalty and brand advocacy.

4) BEHAVIOURAL SHIFTS-Perhaps the biggest disruptive aspect of the rise of digital

is not so much the emergence of the new technologies discussed, but rather the shift in
customer behavior ¹. Deloitte suggests that the market leaders of tomorrow will not be
decided by the amount of technology they deploy, but by how they evolve their whole
service operation to respond to the changing customer.

For example, companies need to start proactively reaching out to customers with
information, advice and where necessary, forewarnings. This means acting more like
a partner than a service provider to customers, by advising them how to make the

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 most out the organization’s services and reduce costs for themselves. These are the
kind of high-value services that will differentiate businesses from their competition.
NEGATIVE EFFECTS

Just every technological innovation or advancement has its positive, it does have its fair share
of negatives as well. Some of the negatives of disruptive technology as a whole are as
follows;

1. Disrupts the flow of the business

2. Some of the technological trends are difficult to adjust to for some of the people.
3. Some business and organizations are not in a position to adapt to the change in the
technology and hence fail to cope.
4. Some lack the financial prowess to implement the technological change.

APPLICATIONS OF VARIOUS DISRUPTIVE TECHNNOLOGIES IN

BUSINESS

1) WIRELESS SENSOR NETWORK– They are spatially distributed autonomous sensors

which monitor physical or environmental conditions such as temperature, sound, pressure etc.
and pass this data through the network to a main location. Sensors can be used in defence,
Health care monitoring, Air pollution monitoring, Forest Fire detection, Landslide detection,
Water quality monitoring, Machine condition monitoring, These sensors have significantly
added value to the economies, business models and people.

2) 5D PRINTER - With the help of internet it is possible to share the blueprint of a product
with anyone at any place in the world to be replicated by a 5D printer . An additive
manufacturing route that enables programming and fabrication of synthetic microstructures
within a five-dimensional design space. Besides the 3D shaping capabilities of additive
manufacturing, such a design space also includes local control of composition (+1D) and
particle orientation (+1D).5D printers are used widely in apparels, automobile, medical, art
industry.

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3) CLOUD - The use of computer hardware and software resources to deliver convenient, on
demand network access and services over the internet to a shared pool of configurable
computing devices. Cloud can prove to be of immense help in big data analytics and mobile
computing as compared to other traditional alternatives of IT infrastructure. Its others use are
file storage, cloud bases backup, disaster recovery. Potential use of this technology is in IT
services, education, banking etc.

4) INTERNET- Increasingly inexpensive, mobile and computing gadgets with the help of
internet network has brought advantages in all the sectors. Online shopping and Banking,
Virtual Private Network, VoIP, Digital advertisement, E-commerce industry has led to an
increase business, improved efficiency of business activities and ultimately added value in
the life of people. The digitization enables the projects and processes to increasingly manage
information in digital form, whether that information was born digital (e.g. email, Word doc,
Excel spreadsheet, eForms) or was converted from hardcopy (e.g. scanned documents). The
key benefit of digitization has been in improving the efficiency of core business processes.
Capturing documents and data at the point of origin or receipt into an organisation allows for
many tactical advantages like improving accessibility to information, integrating business
systems, using Big Data for enhancing the process of Big Data

5) INTERNET OF THINGS - The Internet of Things (IOT) is the system of identifiable

objects and their virtual representations such as—gadgets, vehicles, structures and different
things which are inserted with electronics, software, sensors, and network connectivity,
which empowers these items to gather and exchange information. There can be dangers as
well, as the connection of billions of smart devices can represent a real security threat. The
areas in which IOT has a wide application are media, environmental monitoring,
infrastructure management, manufacturing, energy management, medical and healthcare
systems, building and home automation, transportation etc.

6) ADVANCED ROBOTICS- Advanced Robotics corresponds to increasingly capable

robots or mechanical instruments, with improved ability, and knowledge. These innovations
can convey astonishing advantages to society, including mechanical surgical frameworks that
make methodology less intrusive, automated prosthetics and "exoskeletons" that restore
elements of amputees and the elderly. These disruptive technology manages automated
machines that can assume the position of people in hazardous situations or manufacturing
processes, or take after people in appearance, behaviour, and or cognition. The robots can

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carry out tasks which are very difficult, monotonous or hazardous for human beings. Both
programmable and reprogrammable robots are used to carry out certain tasks with high
precision and accuracy in industries, aerospace, healthcare, military etc.

7) RENEWABLE ELECTRICITY - Renewable sources, such as the sun, wind, rain, tides etc
are put to use to generate electricity resulting in reduction of harmful climate impact.
Advantages of renewable electricity include environmental benefits, reliable energy source,
economic benefits, stabilized energy prices etc. This disruptive technology can help business
in cost-cutting and improving efficiency.

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