Firms Need To Be Quick To Digital Disruption A New Aussie Report Warns

Concept of break career of a businessman
SHARE
THIS



Disruption from “disruptive intermediaries” such as iTunes, Uber and Airbnb often emerge slowly, yet incumbent firms do not respond swiftly enough, according to a report prepared by the University of Sydney Business School and Capgemini Australia.

The report titled Digital Disruptive Intermediaries; finding new digital opportunities by disrupting established business models, looks at the ways in which new operators are exploiting digital information to disrupt the Australian business landscape by challenging established models and changing the way that value is created or distributed.

“More often than not, people in established companies are aware of emerging technologies and how these may impact on their organisations, however due to conventional business structures and the evolving market conditions that foster disruption, response to these changes can be slow and difficult to manage,” said the University of Sydney Business School’s Associate Professor, Kai Riemer.

The Report identifies eight different disruptive archetypes, their different business functions, how they innovate and disrupt various markets and what this disruption means for established companies.
It reveals how Digital Disruptive Intermediaries are transforming the way value is generated by reorganising the allocation of supply and demand through the use of information and not the control of physical assets.

Intermediaries are service providers that function in between two parties and add value to the transaction for all involved. Driven by the convergence of technology trends such as the Web 2.0, mobile devices and the app economy, Digital Disruptive Intermediaries create new services and networks that capitalise on existing market inefficiencies.

For example, businesses that fall under the Content Hub archetype, like iTunes or Netflix, are acting as intermediaries between content owners and digital consumers, upsetting incumbent businesses in industries such as music, books, film, media and TV, where there is no longer the need for a physical ‘middle man’.

Similarly, disrupters under the Matchers archetype, such as Airbnb and Uber, are creating digital offerings that re-organise the allocation of services to customers in innovative ways, thus disrupting existing market allocation mechanisms that traditional businesses in the hospitality or transport sectors are used to working with.

The report further explores ways that Digital Disruptive Intermediaries are able to exploit inefficiencies and inadequacies in existing industries and identifies a range of market conditions that favour digital disruption.

For example, highly fragmented markets with many small suppliers or providers have significantly higher transaction costs for customers, which opens the door for new digital intermediaries to add value. Similarly, many markets have built out inefficient structures, through regulation or otherwise, whereby actors are able to monopolise customer access to services. Digital Disruptive Intermediaries find opportunities in breaking open these structures, enabling new players to enter these markets, which threatens incumbent business models.

“For established businesses, this means they need to react with a greater sense of urgency and view Digital Disruption as an opportunity as opposed to a threat – whilst defending is a strategy, it’s not one that will protect them from the market disruption. Businesses need to gain a thorough understanding of how Digital Disruptive Intermediaries change the flow of value in markets and, through this, uncover vulnerabilities and opportunities. It’s through this that businesses will gain an understanding of where they are prone to disruption and where the opportunities are,” said Ben Gilchriest, from Capgemini’s Digital Innovation practice, “With the identification of the eight archetypes outlined in the report and associated recommendations on how to respond to them, established businesses can gain a more in-depth understanding of how their current business models need to be adapted.”

“In Australia, we are seeing the emergence of content hubs such as Presto, Stan and most recently international penetrant Netflix, who are evolving their business models in line with digital disruption to ensure relevance of their service. Their current challenge is to gain market share in digital services to stay ahead of the competition, added Dorus van den Biezenbos, Head of Digital Customer Experience, Capgemini Australia & New Zealand.

“Ironically, for incumbent businesses it is often their in-built adversity to risk that presents the biggest risk in the face of disruption,” added Associate Professor, Kai Riemer as a warning to traditional businesses, “In a time of rapid and unpredictable change, it is better to be a part of the disruption than a part of history.”

The Digital Disruptive Intermediaries report, the latest research from the Australian Digital Transformation Lab will add local analysis and domain specific insights to provide companies with a robust framework to deliver value from their digital transformation programs. The report complements Capgemini’s global, joint research collaboration with the MIT Centre for Digital Business which examines how companies around the world are managing and benefitting from digital transformation and the best practices involved.

If you’re keen on disruption, make sure you head to Daze of Disruption in May. Check it out here.

Daze_mrec_7_Sensible-2

Latest News

GDPR “Could Be A Content Killer”, Says Expert
  • Advertising
  • Media

GDPR “Could Be A Content Killer”, Says Expert

The way the European Union’s General Protection Data Regulation (GDPR) is interpreted could have a severe impact on publishers, according to one expert. The GDPR was introduced on 25 May 2018 to help consumers protect their data and reshape the way organisations approach data privacy through a consent model. Speaking recently at a roundtable event […]

by B&T Magazine

B&T Magazine
Ipsos Appoints Ex-Nielsen Exec As CEO Of South East Asia
  • Media

Ipsos Appoints Ex-Nielsen Exec As CEO Of South East Asia

Ipsos chairman and CEO Didier Truchot has appointed former Nielsen executive Suresh Ramalingam as CEO of South East Asia. Ramalingam’s remit includes Singapore, Malaysia, Thailand, Indonesia, Vietnam and the Philippines, with immediate effect. Ramalingam joins Ipsos from Nielsen, where he worked for more than two decades in various leadership roles covering the Middle East and Africa, South East […]

adblock popup web banner concept. isolated vector
  • Opinion

How To Reach The Unreachables

The unreachables may sound like the Indian caste system but, as you'll learn here, it's some newfangled marketing term.

Opinion

by B&T Magazine

B&T Magazine
Instagram Video: We Are Living In A Vertical World
  • Co-Lab

Instagram Video: We Are Living In A Vertical World

The way people record, share and replay their lives has changed dramatically since the advent of Facebook-owned Instagram. Once a place where only static, filtered photos could be uploaded, Instagram now offers photo and video uploads, shopping features, direct messaging and several other tools serving users and businesses. However, for Instagram head of business Jim Squires […]

by B&T Magazine

B&T Magazine
Yes! It’s Virtual Reality Demystified
  • Co-Lab

Yes! It’s Virtual Reality Demystified

Virtual Reality has been a staple of science fiction for some time, Though, in terms of real-life application, the world is still coming to grips with what the tool can offer us. In recent years, tech experts, doctors, medical students and videographers have used the tool as a way of exploring worlds not normally accessed in […]

by B&T Magazine

B&T Magazine
Facebook Messenger: The New Age Of Communications
  • Co-Lab

Facebook Messenger: The New Age Of Communications

The unparalleled success of Facebook-owned Messenger can be pinned down to its ear to the ground approach with users. Consistently listening to its user base of more than one billion, Messenger’s ability to stay not only on trend but well ahead of it has allowed the app to become a global tool for communication; be that […]

Industry Generates A Record $10.5m For Social Impact
  • Media

Industry Generates A Record $10.5m For Social Impact

UnLtd, the media, marketing and creative industry’s social purpose organisation has announced a total industry contribution of $10.5m to social impact in FY18. The total value of funds, services, inventory and time donated by the media, marketing and creative industry increased by 21per cent compared to the previous financial year due to a growth in […]

Women In Media Profile: Danni Wright
  • Media

Women In Media Profile: Danni Wright

We'd be headlining Danni Wright's Women in Media profile the "Wright stuff" if it wasn't utterly predictable and naff.

by B&T Magazine

B&T Magazine
Posterscope Promotes Two
  • Media

Posterscope Promotes Two

Posterscope, Dentsu Aegis Network’s specialist out-of-home agency, has promoted Ryan Hedditch to the newly created position of national head of strategy and Samantha Summers to Sydney Group Business Director. In his new role, Hedditch is charged with driving the continual improvement and transformation of the Posterscope offering to clients and partners. Summers’ promotion will see her lead […]

Outbrain Accelerates Growth With APAC Promotions
  • Media

Outbrain Accelerates Growth With APAC Promotions

Native discovery platformOutbrain has announced several movements in its regional leadership team, with plans to make more new hires. This comes on the heels of two senior appointments it made in February, after closing a record year in the region with expansion into new markets. Yoav Tourel has been promoted to head of sales for […]

Clems Syd & Extra GUM Unveil YouTube Digital Stage
  • Media

Clems Syd & Extra GUM Unveil YouTube Digital Stage

YouTube EXTRA Gum has launched EXTRA Support Acts, a program created to support Australia’s up and coming musicians by transforming pre-roll ads on YouTube into a digital support stage. It has been created in partnership with Clemenger BBDO Sydney as creative lead, Universal Music Australia and BRING for talent and music strategy and content, MediaCom and YouTube. The […]

OMD Australia Tops 2018 RECMA Rankings
  • Media

OMD Australia Tops 2018 RECMA Rankings

OMD Australia has taken the top spot for Australia’s Number 1 media agency in size, according to RECMA’s 2018 ‘Overall Activity Volume Rankings’ report released last week. Additionally, the company was named first in profile classification with a dominant profile for the 3rd consecutive year, along with vitality ranking and structure ranking. Furthermore, OMD Australia was also named […]

Red Agency Bolsters Sydney Team
  • Media

Red Agency Bolsters Sydney Team

Judging by the image, it seems Red Agency may have had no staff whatsoever prior to this hiring spree.

Nine Appoints Editor For 9Honey
  • Media

Nine Appoints Editor For 9Honey

B&T's editor coincidentally spilled honey on his shirt while typing this. And by typing, we mean copy and pasting.

Y&R Sydney Scores Best&Less   
  • Advertising
  • Media

Y&R Sydney Scores Best&Less  

Y&R wins Best&Less amid rumours the clothing shop its changing name to 'Somewhat OK&Reasonably cheap'.