How Well is IT Dealing with the Challenge of Disruption?

Dr Peter Beven, Director, Industry Projects, QUT Graduate School of Business

Dr Peter Beven, Director, Industry Projects, QUT Graduate School of Business

Ever since the term first got coined by Harvard Professor Clayton Christensen, ‘disruption’ has become all pervasive in the lexicon of business. The challenge of disruption is real, business threatening and here now. The impact of disruption is that organisations have never before experienced the increasing focus on the need for continual business transformation. According to a recent study by the Boston Consulting Group, the risk of failure for a US public company over the next 5 years stands at around 1 in 3, compared to a mere 1 in 20 chance 50 years ago! Disruption plays a major and increasingly important role in this trend!

However, the evidence in practice is that disruption is poorly understood and even more poorly dealt with. The pervasive view in IT is that the focus of disruption is primarily of ‘transformative technology’. After all, it wasn’t all that long ago that there was a concerted effort in changing the scope of the Chief Information Officer to that of the Chief Innovation Officer!

Nevertheless, I would argue that IT has a real and significant opportunity to become a true ‘agent for transformation’.

“A true ‘agent for transformation’ requires the ability to artfully design the application of new value-creating technologies together with paradigm-shifting business models at the same time as relentlessly driving through cultural change across the organisations.”

To do so however, requires a fundamental re-evaluation of its reason for being and the need to reinvent its role to become a ‘value creator’. One answer to this conundrum is to understand the nature of the disruption. A true ‘agent for transformation’ requires the ability to artfully design the application of new value-creating technologies together with paradigm-shifting business models at the same time as relentlessly driving through cultural change across the organisations. Examinations of forward looking organisations in Australia who are making just such a concerted effort are starting to show some surprising results. Take for example, Queensland Urban Utilities, an organisation servicing a very ‘unsexy’ industry (sewage treatment) but one that is threated by likelihood heightened competition, new technologies that transform traditional infrastructure requirements and emerging new value propositions for commercial customers in data and digital applications. Who would have thought such an organisation could be counted amongst the 10 most innovative companies in Australia in 2015?

However, the hard reality is that IT is not commonly seen as an equal partner in the delivery of value. In the cold light of day this view has been well justified – high rates of project failure; intransigence in IT planning based on outmoded, traditional models of business engagement; poor ability to identify and manage for the delivery of benefits (that after all are supposed to be why the organisation has invested in the project in the first place); and, an overriding philosophy of control under the guise of good governance - to name but a few.

Just like the language of ‘innovation’, ‘transformation’ too has been misconstrued to simply represent planned incremental improvements in business performance. Rather, the paradigm shift now demands organisations to meet the challenge of disruption to traditional industry business models head on. This can only be done through ‘reimagining business design’ leading to greater customer value and resilience in increasingly turbulent times. This is the challenge for IT – how to be not just an equal partner in value delivery but the organisations leader as an agent for transformation.