Does Technology Really Transform Business?

Innovation drives transformation; and increasingly technology is making that easier, or even possible

Every new technology labels itself as “disruptive”, and the next claimant to business “transformation”. Before we address whether this is true or not, let us see what transformation means. It is a radical shift in paradigms that creates value. This value may be whatever the organization’s priority is: Economic, social, cultural, etc. The assertion here is that transformation is not always dependent on technology.

Many transformations had nothing to do with technology at all. One example is that of one of the world’s largest package delivery service removing door handles from door trucks, making them simple sliding doors. This saved the delivery driver a few seconds at each delivery point. The savings are millions of dollars per annum. The second example is a major airline removing one grape from each meal served onboard. No one noticed and they saved millions per annum.

So, transformation is driven by innovation; an idea in any business area, be it sales, finance, manufacturing, logistics, technology, and so on. Oxford Dictionary defines innovation as “the introduction of new things, ideas or ways of doing something”. So technology is not a necessary component of innovation and thus of transformation. However, of late, technology is taking on a much larger role; let us examine this assertion.

Let us start with fundamental attributes of innovation. Firstly, it is usually a zero-one game. Secondly, correct cost benefit analysis is the key. Thirdly, it has to be able to have SOPs. Technology by its very nature enforces the third attribute; it makes the second attribute easier and faster; and therefore moves the needle more towards the first attribute. Let us look at some interesting examples.

“NO STORE” followed by “NEW CUSTOMER OUTSIDE THE STORE” was a pipedream for retail industry for many years. And then e-commerce and logistics technologies made it possible overnight. What is really interesting is that e-commerce was first used by the pornography industry, and logistics by the manufacturing industry. Neither was created for retail industry per se.

Let’s look at a second example from the reverse direction: The need to move humans out of dangerous jobs like moving hot metal led to adoption of the first robotics. This then grew into error-free and exact replica production capabilities. And now robotics is in almost every industry including space exploration; it has enabled innovations like lights-out warehouses that can operate 24X7 without a hierarchy of personnel, customer service that can handle agitated customers graciously, and micro-surgery without the risk of a surgeon’s hand shaking, amongst other things.

The takeaway is that technology may be created for some purpose, and an innovation may lead it to be used elsewhere (also). However, some still argue that it is technology that drives innovation (and not the other way around), and therefore transformation. Let us examine why, with another example.

A classic example of “let us build it and they will come”, is the ATM machine. Its original creator was convinced that it was a great idea. It failed. Two generations later, an inventor missed the bank closing hours two days in a row, and was thus unable to withdraw cash. So he invented the 24-hour cash machine and sold it to the bank as an innovation. As the cliché goes, the rest is history. Let us not forget that the ATM has now been repeatedly used in many innovative ideas like cash anytime-anywhere, less tellers/cost savings, full-fledged bank branch, insurance agents, etc.

In all the examples above, and many such more, the idea came first. Then technology enabled it; in many cases many years after the idea itself originated. So, the bottom line is that innovation drives transformation; and that increasingly technology is making that easier, or even possible

 

The author managed large IT organizations for global players like MasterCard and Reliance, as well as lean IT organizations for startups, with experience in financial and retail technologies.

 


Add new comment