John Sheridan

John is CEO of Digital Business insights!

Who is being disrupted? Part 3

Easy access to information and the capacity to discuss it meaningfully with others is powerful. Google and other search and analytic tools have shifted power from the traditional "high priests" in our society to the customer.

This new "customer power" is now affecting the relationships we have with general practitioners, lawyers, CIOs, the insurance industry, the investment industry, politicians and education. These “middlemen” historically stood between knowledge and information, and the customer offering specialist insights and interpretation as a service.

These sectors are all connected in various ways and are linked directly to government - for policy. regulation and legislation.

GPs are under more pressure than ever. It is not just the patient case load creating stress, but nearly every patient walking in the door has already visited Dr Google.

GPs also visit Dr Google. Keeping up to date with medical information is a nightmare for doctors under the pressure of enormous workloads. Smart systems have been developed to help with diagnosis and prescriptions. Practice management systems help to administer patient appointments and timetabling.

But technology is a two way street. Health authorities will increasingly use technology to monitor GP performance, track patient outcomes, check prescriptions and medical mistakes for good and for bad.

The ever-increasing cost of the health system has reached a crisis point across the OECD. Governments can’t afford business as usual and the vested interests of the pharmaceutical companies, the medical profession, government and the customer (patient) are now in conflict over exactly where the health system will go. 

We can’t afford to keep buying more expensive medical machines, building and running more hospitals and paying for more expensive drugs.

The crisis point is upon us, and the discussion and decision-making by government takes place largely behind closed doors, under “Chatham House” rules.

Digital technology offers new options, but once again leadership, vision and decision are the key factors to consider. Collaboration is part of the answer and that has to involve all vested interests equally.

Add to that the disruptive pressure from better informed citizens and families with more power to negotiate and manage their health outcomes, and the arrival of new players into the marketplace focused on health not sickness, and the journey towards wellness not chronic disease and death, and you can see that the revolution is real. There is a lot of change under way and even more to change in this sector.

Lawyers are using digital technology to make their practices more efficient and profitable, but not too far down the track smart systems will become freely available and replace much of the mundane bread and butter legal activity that keeps smaller law firms alive. The sector is one of the few with a Law Society (association) that is abreast of these issues and so is likely to surf the waves of change rather than drown like many others.

The CIO – the Chief Information Officer - has been hit hard by the trend towards mobility, open source software development and “bring your own device” – BYOD.

Decisions are being taken by CEOs and marketing departments without reference to the CIO who is still expected to manage the outcome. CIOs are juggling with the cloud and its implications, and they are struggling to stay abreast of the constantly changing technology landscape, as well as managing the traditional internal IT.

It is not easy, and many are still not part of the decision making managerial team in businesses and not-for-profit organisations, when they should be.

The insurance industry relies heavily on data. As data becomes more open and accessible, insurance becomes increasingly commoditised. Price is really the only variable and options can be bundled by insurance aggregators, so that customers can always find the best price. Chicanery of any kind by the industry will quickly be exposed, shared, and commented on in social media and government regulation is bound to increase as a result.

Internationally the financial investment industry has been high-jacked by high frequency traders (HFT) and “dark pools” (private trading) effectively creating insider trading casinos that exclude normal people, where the bets are rigged by and for the traders.

This is a by product of digital technology, high speed fibre networks and fast processing creating a nightmare result that is largely beyond the knowledge or willpower of governments anywhere in the world to address. And no part of the financial world is disconnected from any other. It has already created one GFC and is likely to create another.

Locally we have Combank. When trust is destroyed so completely in a market, it creates a trust vacuum into which new players stroll. It will be interesting to see if Apple, Google, Amazon, Paypal or even Facebook will take on the task.

Politicians and the digital revolution?

They still don’t get it, though some have used the power of social media effectively to raise funds. That is one outcome of connection and collaboration. What they don’t understand is the implications of more connection, more collaboration and more integration.

Connecting everybody up creates a new shared value environment, where policies that are “in sync” with shared value make sense and feel right, and policies that are “not in sync” with shared value make no sense and feel wrong. This is a by-product of the digital revolution. It is deep, fundamental and universally transformational. But not everyone recognises this for what it is - an irreversible change.

This will get even “worse” or “better” over time (depending on your world view), as more people connect, collaborate and integrate.

Honesty works. Dishonesty and party line doesn’t.

Being real resonates. Repeating the script doesn’t.

It will get increasingly difficult for politicians to succeed unless they wake up to the new paradigm. And I don’t mean using social media to raise funds, I mean using the informational and collaborative power of the digital revolution to steer Australia safely forwards with vision, not backwards.

In the meantime, individuals with access to information are disengaging from politics and looking at other options. Politicians need to take their role more seriously. The game playing and grandstanding doesn’t stand up to digital scrutiny in the 21st century.

Politicians need to put the theatre and history to one side and get on with some serious discussion, vision and management.

Education is a natural benefactor of digital technology. It is an information revolution after all and education has changed because of it. PCs, laptops and tablets are ubiquitous in schools and universities. But education policy is miles behind where education and learning are heading.

Access to information and knowledge is becoming universal. Countries like South Africa, India, China and Brazil have adopted and committed to using technology platforms to springboard themselves ahead of the first world.

The control of learning has shifted forever from the traditional comfortable environments of school and university to devices that deliver access to courses, modules, people, teachers, mentors and trainers anywhere and everywhere.

There is a battle between the value of “the certificate” and the value of the “person who can”, the academic skillset and the real world “hands on”, practical skills and the theoretical.

Where certificates apply, there is a battle between the value of Caltech, Harvard, Oxford, Stanford, MIT, Princeton and Cambridge certificates and the rest.

When certificates don’t apply, there is a battle between where to find the best skills module to solve an immediate problem, address an issue, anywhere at any time.

What is education for in the 21st century when the very nature of a job has changed? What does an individual need to know to succeed in the 21st century anyway? Not an easy question to answer at this time.

Connection and communication technologies are impacting and disrupting property developers and marketers, because traditional office space becomes less relevant and valuable every day. People can work from anywhere and they do.

Videoconferencing improves year by year and telework has created new networks and business options. And even more reasons not to have or use a traditional office. The “commercial property for lease” signs become more common every day.

The aged care industry is already impacted by legislation and regulation, but will be even more disrupted by a new connected and collaborative group of baby boomer customers not willing to engage on old world terms. And they have been practicing disruption since the nineteen sixties.

Digital technology provides the means to connect ageing people in the home to each other, to schools, to libraries, to doctors and healthcare providers, to social services and to the world. Power will continue to shift to the customer.

So the aged care industry and government needs to understand that this is not business as usual and they haven’t yet. But they will.

Councils are losing any relevance beyond “roads, rates and rubbish” as citizens become regional, national and international not “local council”.

The banking industry has disrupted itself, through greed and stupidity, exposed by digital media and is now in competition with startups who have lost trust in the traditional banks – post GFC – and are now working on ways to replace the out of touch institutions with newer options for investment. This will be slow, but it will happen.

Lose trust as comprehensively as the banks have lost it internationally and it will take generations to rebuild.

The big ICT vendors are already disrupted and diminished. The giant old world of HP and IBM has taken a beating from the new upstarts and nothing has changed on that score. The traditional IT distribution model is busted.

Cisco has taken a beating in the BRICs countries where trust in any product or service coming from the USA has fallen through the floor as a result of Edward Snowden and the NSA revelations. There is suspicion about possible “back doors” in routers, boxes and switches that has hit sales dramatically.

This distrust undermines and disrupts all business connections with American based ICT companies and that issue hasn’t gone away. Some people don’t care about it but a significant number do.

Utilities are being disrupted (their own fault) by smart technology, smart metres and the “internet of things” making locally generated and distributed energy a real possibility, stimulated by the greed and gold plating of the big distribution networks, and the exorbitant charges of energy retailers. And they weren’t caused by the carbon tax.

The internet was originally created as a nationally distributed communications network to ensure communication in the event of a nuclear war. Through its actions the NSA has now encouraged countries across the planet to consider creating their own internet, managed and controlled nationally or regionally. Some have already moved in this direction.

The same principal can and will be applied to energy in due course, with groups of households, groups of businesses and industrial estates looking at this local distribution option more seriously especially if the price of energy remains high. Legislation makes this difficult at the moment but where there is a will…

For wholesale and manufacturing, digital technology is about efficiency. But once you begin to connect customer demand to production directly, a new paradigm emerges. We have barely begun to explore what this means. Amazon provides some clues as does iTunes, but we need to get ahead in the new game and get it right, if we are going to survive and thrive as a nation.

It is the same with Agriculture in this country. Digital technology can be a valuable tool in mapping, soil testing, planting, harvesting, fertilising, water management, pest management, stock control and farm management.

Connect production to customer demand and we get intelligent supply chains, and the ability to match our national ability to produce to worldwide demand for value added produce.

And finally government is itself being disrupted, by informed citizens taking control of their own interests and destinies through frustration and self-reliance.

What do they all have in common?

They are all a result of digital technologies impacting “middlemen”

They are brokers or sellers of products or services or information, and those can all be accessed in non-traditional ways because of the digital revolution.

The disruption comes from hardware and software. It comes from the drop in price, making technologies accessible. It comes from the drop in price, because of efficient distribution and delivery. It comes from disintermediation. It comes from reintermediation.

It comes from reaching the tipping point of enough users adopting a technology to make it viable and disruptive. It comes from developers then using their imaginations and fast development tools to build new tools that take advantage of the new platform or the new market…to disintermediate, to disrupt and to transform.

And so it goes.

What are the options? Surf the wave, move or drown.

Frog in the well? Or tree frog high up the tree?

Disrupted or disrupter?

Your choice.

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Wednesday, 21 March 2018