A 2016 McKinsey report explains the hesitancy incumbents face when approaching the possibility of disruption ( Figure 1 ):
Faint Signals with lots of noise |
Emergence of a validated model |
Critical mass of adoption achieved |
At scale and mature |
Decisive Impact
New Business Model
Profit
Incumbent ’ s Business Model
Negligible Impact
Time
Figure 1 : Matrix of Incumbent ’ s Hesitancy in Disruption
Modified from McKinsey
“ In a disruption , the company heading toward the top of the old S-curve confronts a new business model at the bottom of a new S-curve . The circle of creative destruction is renewed , but this time the shoe is on the other foot . Two primary challenges emerge . The first is to recognize the new S-curve , which starts with a small slope , and often-unimpressive profitability , and at first does not demand attention .”
The essence of this concept is the fact that those who invest in digital disruption are often “ unimpressed ” by the value that it is able to generate in relation to the investment . For example , take leveraging IoT-based technology to track production . While the initial investment in those systems is significant , the disruption that it causes may not be seen for a year or more . Thus , those enterprises that are able to invest in digitally disruptive technology are often the ones that obtain the most gain , although that gain may not be immediate .
Disruptors Emerged
There are many examples of digital disruptors in the market today . Here are a few selected industries that have been disrupted by key players and first movers leveraging cloud technologies .
22 | THE DOPPLER | WINTER 2017