Disruptions key to solving basic issues

Customer experience is the ultimate factor that leads to survival and success of companies. In this tech-savvy era, disruptive innovations are bringing forward solutions for organisations across all industries, leading to enhanced client experience.

These solutions include digital transformation, tweaking business models, better service ecosystems, managing customer expectations, commoditisation, and changing workforce expectations.

Disruptive innovation could lead to a small new entrant in the market defeating an industry veteran on its own turf. Well-known companies are disrupted by emerging technologies and start-ups, who redefine markets and bring value to the market in new ways.

Former vice chairman of Deloitte and author Jay Samit quoted “disruptors don’t have to discover something new; they just have to discover a practical use of new discoveries.”

When a gap is noticed in markets, quick thinking techies grab the opportunity to introduce a disruptive innovation that can alter a product and service making it more accessible and perhaps affordable. Most of the big players focus on supporting innovation, improving existing products and services to attract higher-paying consumers.

It is not surprising that they gradually begin to ignore all regular customers who just want simple low-cost alternatives. That is the opportunity where an entrepreneurial company jumps in with that basic offering.

Larger organisations mostly stay focused on more profitable customers and begin to over-serve, usually adding non-function-related bells and whistles no one wishes to pay for.

Attracting more clients

Meanwhile, a disruptor improves their core product by attracting more clients. By the time an organisation notices the disruption, the disruptor has already started to take over the market. Strong brands such as carmaker Toyota first launched the economy models thereafter added luxury features and brands to their repertoire.

The only way industry leaders can claim back their market share from the new entrants is to launch their own disruptive innovations, treating each project as a separate unit with a different business model and growth expectations.

Former chief executive officer of America Online (AOL) Steve Chase stated “the pace of change and the threat of disruption creates tremendous opportunities”. This is evident with most organisations embracing digital methods of operation. The finance sector has witnessed many innovations in its operations.

The impact on regulation and customers is noteworthy. The world has witnessed banks moving from solely branch-based models to mobile and virtual systems over the years.

Emergence of fintech competitors has led to banks having to adapt their business models to deal with the competitive industry and environment, low credit growth, and low-interest rates, while ensuring profitability is not threatened.

 Innovative technologies have been gradually transforming the way the banking industry has been conducting business over the past many years. However, it took the Covid-19 pandemic for the banking sector to propel its activities into the digital arena at a whirlwind pace.

According to various global surveys, a majority of organisations across industries have fast-tracked their digital transformation programmes during the year 2020. Work-from-home model has been globally embraced more so over the past 24 months.

The East African Community has been at the forefront of digital services since 2007. During the Covid-19 pandemic, Kenya alongside regional countries has become a leader in encouraging the use of mobile money platforms to address the health and economic dimensions.

Fintech and e-commerce giants who are using technology to augment, enhance and mechanise financial services and procedures are disrupting the banking industry.

 Financial markets

Over the past few years, all banks across the globe have been working towards becoming digital-ready. Digital disruption is bringing change while solving problems in the financial markets such as high switching or transaction costs.

Historically, financial markets have seen tension between competition and stability. Though there are regulatory bodies in place, this has not always been sufficient to ensure stability and has intermittently been superseded by innovations.

A thought to ponder on is whether the various existing and emerging FinTech and BigTech actors create systemic risks, which are similar to those inherent in the traditional banking model.

During the month of June 2019, a discussion was organised by the Organisation for Economic Co-operation and Development (OECD) to have a dialogue on the magnitude to which the digital disruption from FinTech and technological advancements compromises the stability of the banking industry, and whether the technology players need a different type of regulatory oversight, which they do.

Disruptors are uncomfortable with the status quo, they do not try to fit in, and instead, strive to stand out. They are not afraid of failure to know that setbacks are part of a creative process.

French author Andre Gide famously quoted “man cannot discover new oceans unless he has the courage to lose sight of the shore”. With the many challenges faced by the Kenyan population with regard to the unsteady supply of essentials, can disruptive thinking and models assist in resolving for instance electricity and water shortage issues?

This problem is not unique to Kenya. Experts estimate that over one billion people across the world do not have access to electricity but this means there is a huge market for off-grid renewable energy. Over the past decade, the sale of off-grid solar renewable technology has grown by 60 percent or more. It is a new and growing market with innovative companies pushing for a position in most of Africa and Asia.

Deep within the rural interiors, introduction of solar panels as an alternative to electricity brought a glimmer of hope for those not connected to the electric grid. Solar panels and battery power systems continue to serve deep within the interiors and are being utilised well.

For many people, battery power systems are the only way of getting electricity that they can afford. Companies including BBox, Azuri, MKopa are changing the narrative and bringing disruptive power solutions in parts of sub-Saharan Africa that are off the electricity grid.

 Introduction of technology like this is helping to close the gap between supply and demand. The time for all the new innovations is here and some of them are going to be tested through fire before they become part of the business ecosystem. However it is surprising that even during these times of progressive technological, intellectual, and great advancements, we are still struggling with poor access to essentials including electricity, water, and healthcare.

Ritesh Barot is a business and financial analyst, humanitarian, conservationist, occasional artist, recipient of OGW honor. [email protected]