The motivation for this blog was sparked when I was recently asked to host a VIP lunch at the Gartner Sourcing & Strategic Vendor Relationships Summit in London. I was asked to drive a conversation on the topic of Disruptive Technologies – Solving Challenges. Delivering Value. Easy I thought – spark some conversation about the new breed of ‘asset light’ and highly disruptive multi-billion dollar companies (Uber, AirBnB, Netflix) – everyone has an opinion on these!
But when you stop and analyse the term disruptive technology, placing those two words together doesn’t make any sense. Why? Technology is disruptive and it doesn’t need to be called out specifically. The whole point of technology is to do things faster, better and/or cheaper – therefore disrupting the status quo. There is a constant requirement to make technology more efficient, through initiatives like automation, greater use of intelligent computing (IT for IT, Machine Learning, Cognitive Computing, etc) and the adoption of improved processes (LEAN, DevOps, etc) to name but a few. But all of these are just the evolution of technology – think Moore’s Law! They are not disruptive.
Over 50% of the attendees to the VIP lunch are IT Sourcing Executives. These are the people that companies employ to deliver the required business outcomes at a competitive price (note – this is a summary view, I am sure they do a whole lot more!). When we use the term disruptive technology, the word disruptive could be more relevant to these Sourcing Executives. Why? Because it is the application of the business model that is disruptive, and not the technology. Should these Sourcing Executives, who are often the interface between a company and the IT market, play a more active role in underlining how the disruptive part of these disruptive technologies can add value to a business? Maybe they should – isn’t that why they attend the Gartner Sourcing & Strategic Vendor Relationship Summit?
What evidence would I bring forward to support my argument? In my role I get to see the requirements (RFI, RFP, ITT, etc) that businesses present to the IT market. When I think back over the years the requirements, and associated commercial arrangements that sit with them, haven’t changed that much. The expectations on quality have increased (and rightly so) and range of services has expanded. But ultimately the requirements are ‘do A, B & C for X years’. These kind of arrangements between a business and an IT service provider work well, but they are focused around delivering certainty – certainty of cost and quality.
I don’t see any synergy in the words certainty and disruption – you could argue they are in conflict! Therefore if businesses are looking to extract value from disruptive technologies the Sourcing Executives really need to think about how IT services can be procured and delivered differently. Perhaps the answer lies within what Gartner are terming ‘Bimodel IT’. This is an IT department with two modes of operation. Mode-1 is traditional, emphasizing scalability, efficiency, safety and accuracy. Mode-1 would be applicable to systems of record, for example ERP services. Mode-2 is non-sequential, emphasizing agility and speed. Mode-2 would be applicable to any business challenge or opportunity where technology can be disruptive through the application of a new business model.
When sourcing future IT services, where there is a desire to ‘do things differently’ through the use of technology, you cannot expect success using the ‘do A, B & C for X years’ model. We need a model for the Mode-2! What will this model look like? I don’t know but I will probably create another blog entry for it. What we can say is that it cannot be constructed for certainty – either in quality or price! The application of disruptive technology is often about trying something new – testing, measuring, failing and learning – with an informed belief that it will deliver business value.