To me, one of the most exciting and at the same time frightening outcomes of the digital revolution is the extent to which it has been so disruptive and transformative to different business models. Many traditional organizations have suffered greatly from new competitors that take advantage of technology. Often these competitors start business with a clean slate and no legacy products or organizations. Some existing organizations have managed to adapt the technology and continue to prosper, but the number is small.
My interest in this phenomenon has led to a number of papers and a book which are listed below. One of the most exciting transformation studies is the Public Television Documentary the Smith School co-produced with Maryland Public Television. It debuted in the spring of 2008 and is available through University Microfilms. Individual chapters of the documentary may be found at www.rhsmith.umd.edu/transformationage.
The newspaper and recorded music industries have been dramatically impacted by technology while organizations like Kodak and the New York Stock Exchange are trying to re-invent themselves. Google and Amazon are relatively new firms that have demonstrated explosive growth using the Internet and other digital technologies. Apple has gone from a minor computer vendor to a powerhouse in entertainment with iTunes, the iPhone and now the iPad. Apple was able to redefine itself from a hardware vendor to a major content provider. Apple has amassed so much power that it scares the music industry while Amazon’s e-books initiative has thrown publishers into disarray.
What are the important questions the digital revolution raises for all of us?
- How can a manager predict that a new technology or a new application of existing technology will prove disruptive to her business model?
- Given the manager’s belief that a threat exists, how does she enlist the rest of the organization in meeting that threat? This is where Kodak experienced its biggest failure with digital photography.
- How do you meet the threat? Do you use technology to try and defend your existing business model, a la the New York Stock Exchange? Do you capitulate sooner and adapt to the technology? How?
- If your existing business model is not threatened, how do you find opportunities to apply new technologies to become more competitive, and/or offer better products and services? Think of the auto companies who are embedding digital technology in all aspects of their products from antilock brakes to smart cruise control to real-time traffic information combined with a GPS-based navigation system.
- How do you use technology to go beyond number 4 above and transform your own organization and industry? As an example close to home, how do we use information technology to redefine the University, improve the quality of instruction and get our costs under better control?
Transformational technology also raises questions for public policy:
1. Can we demonstrate that electronic medical records and physician order entry systems will reduce the cost of health care and increase the quality of care in the U.S.?
2. What organizational conditions are needed for IT to transform health care in the U.S., e.g. do physicians need to be on salary? Do we need to have a single payer system in place of multiple insurance companies and government programs?
3. How should the U.S. stimulus funds be allocated between fixed and mobile broadband? Is it more important to increase bandwidth or the scope and reach of broadband?
4. How should a power company design incentives so that customers will allow it to control their appliances over a smart power grid?
5. Can the implementation of e-mail, class web sites and social networking software improve communications among teachers, students and parents in underperforming schools? Can this technology bring about greater parental involvement with education?
6. What are the implications if print newspapers disappear and readers obtain all of the news from Internet news sites? Will the public be better or worse informed?
7. What is the likelihood that network television will disappear? Will cable and satellite systems become content producers while video transmission moves entirely to the Internet? What are the implications of such shifts for workers in the industries affected?
I argue that these are some of the most important questions about technology, yet few people appear to be addressing them. I hope this condition will change.
Some of my Research on Transformative and Disruptive Technologies
Co-producer and co-writer of the public television documentary The Transformation Age: Surviving a Technology Revolution with Robert X. Cringely, 2008 (shown on over 200 public television stations, winner of a Golden Eagle award)
Inside the Future: Surviving the Technology Revolution, Westport CT: Praeger, 2008
“The Defensive Use of IT in a Newly Vulnerable Market: The New York Stock Exchange, 1980-2007,” Journal of Strategic Information Systems, (March 2009), (with W. Oh and B. Weber)
“Disruptive Technology: How Kodak Missed the Digital Photography Revolution,” Journal of Strategic Information Systems, (March 2009) (with J.M. Goh)
“The Impact of E-Commerce on Competition in the Retail Brokerage Industry,” Information Systems Research, (December 2005), pp. 352-371(with Y. Bakos, W. Oh, G. Simon, S. Viswanathan, and B. Weber)
“The Information Systems Identity Crisis: Focusing on High-Visibility and High-Impact Research,” MIS Quarterly, Vol. 29, No. 3 (September 2005), pp. 381-398 (with R. Agarwal)
“The Global Impact of the Internet: Widening the Economic Gap Between Wealthy and Poor Nations?” Prometheus, Vol. 21, No. 1, 2003 (with R. Sylla).