WITH A FOCUS on core competencies, CIOs have been charged to get back to basics, squeeze maximum efficiency out of current infrastructures, and bring IT planning into closer alignment with shareholder expectations. At the same time, however, planning must not turn a blind eye to the potential of disruptive innovations.
How important are disruptive technologies to enterprise planning? For that answer, we need only look to examples from recent history. Look to the pricing models of the traditional members-only club of brokerage houses now facing competition from online discount-broker upstarts. Look to changes imposed on the retail marketplace by Amazon.com, now with a market capitalization nearly twice that of longtime players such as Kmart that are still struggling to capitalize on efficiency. Or look to minicomputer manufacturer Digital Equipment (A personal computer? Where's the market for that?), swallowed up three short years ago by PC manufacturer Compaq.
Identifying the importance and gauging the immediacy of disruptive innovations are challenges for businesses and investors alike. Some technologies immediately find their niche in the market, whereas others may fail to deliver on their promise for years. For enterprise IT managers, timing is everything: Adopt too early, and the result is extended delays for ROI; adopt too late, and competitors gain the upper hand in efficiency and new sales opportunities.
Disruptive innovations may also represent an opportunity for growth, so a company's ability to manage them should not be left to chance. Managing a transition to a new technology is a balancing act that must leverage disruptive initiatives without compromising core business objectives.
Companies must develop strategies to identify potential disruptive technologies, recognize their importance, and form plans of action for creating growth through new business models and revenue streams. Involve management at all levels to get an accurate reading of the impact of adoption across the enterprise, to isolate potential trouble spots, and to take pre-emptive remedial action as necessary to help streamline the adoption process.
To discern which technologies may currently threaten to disrupt your enterprise, be sure to turn to the Test Center In-Focus in this issue for our analysts' evaluations of the important technology trends for 2002.
Disruptive innovation is inevitable. Its negative impact needn't be. By implementing a long-term management strategy for harnessing the power of disruptive technologies, you'll ensure your company's sustained success through the technology transitions to come.
Let me know what mechanisms are in place at your company to identify disruption by writing to me at email@example.com.