The EY upside of disruption

Tue, 21 Mar 2017 10:43:34 +0000


(An adaptation from EY’s Upside of Disruption Publication)

By Kelvin chungu

There has been a lot written about the death of the rising promise of the Africa continent. In the midst of that flawed narrative, there are changes that are ongoing that continue to reshape the world and successful businesses in Africa including Zambia are adapting their business models and in some case reinventing either their distribution models or their customer engagement models and the disruption they have brought fourth is inconceivable.

That alone reminds us that being a disrupter has its upsides and can drive future success. And to become a disrupter, companies need to be aware of the global trends and adapting faster than the competitors.

In 2015, EY had reported and analyzed the six megatrends that had the present and future capacity to disrupt and reshape the world in surprising and unexpected ways.

EY has once again released a 2016 publication titled ‘Upside to disruption’ which present a new set of observations and facts of global trends affecting the world of work and society however they also share the questions that organizations must ask themselves to stay relevant in this disruptive era. The 2016 mega trends as defined by EY are summarized as follows;


  • Industry redefined – Is every industry now your industry?
  • The future of smart – What intelligence will we need to create a smart future?
  • The future of work – When machines become workers,
  • Behavioural revolution – How will individual behaviour impact our collective future?
  • Empowered customer – How will you change buyers into stakeholders?
  • Urban world – In a fast-changing world, can cities be built with long-term perspective?
  • Health reimagined – With growing health needs, is digital the best medicine?
  • Resourceful planet – Can innovation make the planet resource rich instead of resource scarce?

These trends are briefly discussed below;


  1. Industry redefined – Is every industry now your industry?

Disruption is driving industry convergence resulting in competitors entering new industry categories, including unrelated ones underpinned by technology powered by the growing software content and an empowered customer thus creating new levels complexities at extraordinary speed which in turn reduces barriers to entry and altering an invaded industry’s basic features.

Companies to succeed must therefore embrace new opportunities beyond their own industry as competition increases from start-ups with disruptive business models emerge from previously unrelated sectors.

Therefore those companies that look beyond traditional industry borders, asking not what they can sell but what problems they can solve, will see significant growth opportunities.


  1. The future of smart – What intelligence will we need to create a smart future?

Smart brings technology to life by taking an asset, infrastructure, or even transaction and ensuring that it is connected, does data analysis autonomously thus creating a smart revolution.

In an aging, resource-constrained, globalized and urbanized, world, governments and organizations see the need to invest in more efficient and smart solutions.

Second, the internet of things, Artificial Intelligence and robotics are facilitating the wave of digital disruption.

Artificial Intelligence can now autonomously assimilate inputs, perceive and understand a need and deliver the best possible decision however the next step will likely feature a combination of Artificial Intelligence autonomous reasoning with “deep learning and experience and when combined with robotics it could lead to decision-making power with the ability to execute perhaps superseding human capability.


  1. The future of work – When machines become workers

An unprecedented reinvention of work is coming by the displacement of labour by technology and globalization powered by the disruptive technology — Artificial Intelligence, robotics, virtual reality, Internet of Things and sharing economy platforms that are poised to increase labour displacement.

In this new revolution, even white-collar and creative jobs long considered immune to technological displacement are no longer safe, however not all jobs will be affected and not all affected jobs will be eliminated, as always, will be the exception rather than the norm.

Labour-intensive firms will have to reinvent their business models by deploying more smart technologies while labour is used more productively in the most efficient manner. The potential radical disruption of work will have profound political and social implications.


  1. Behavioural revolution – How will individual behavior impact our collective future?

Behavioral economics will become a growing resource for business particularly that some of the biggest, most tenacious challenges confronting humanity  stem from human behavior such as unsustainable energy use and excessive consumption etc, which challenges have been around for decades, however demographics changes and globalization  have made this more urgent bringing behavioural economics (BE) into the mainstream. Global challenges and technology will drive the growth of behavioral economics to demonstrate our irrational behavior in a number of ways, because our behavioral biases are consistent and unidirectional, which means incentives can be built that correct them help us make better decisions.


5.Empowered customer – How will you change buyers into stakeholders?

Empowered customers know their worth and are willing to pay for what they value and can no longer be conveniently categorized.

The growing dominance of delivering differentiated experiences will have profound effects on how value is created and measured both for companies and economies because today’s customers want multiple routes to transaction and want their providers to have a deep understanding of their needs.

The power of analytics therefore will be about not just about understanding consumer behavior but also influencing it because tomorrow’s success requires innovation in lockstep with customers.


  1. Urban world – In a fast-changing world, can cities be built with long-term perspective?

In 2008 for the first time in history, the majority of the world’s population lived in cities. By 2050, at current rates of urbanization, the world will be two-thirds urban and one-third rural, a reversal of the global distribution pattern of 1950. Most of that growth will occur in Asia and Africa and those urban regions are expected to receive an additional 1 million inhabitants every week for the next 40 years and such growth puts pressure on existing megacities to expand and for new cities to form, heightening infrastructure demand.

Mature cities must upgrade or replace infrastructure and public-private partnerships will be the foundation of the urban world and to meet the challenge.

This will require the creativity and investment of the private sector alongside the long-term vision and funding of the public sector, as well as a dedication to inclusive growth.

As a result, the potential for megacities to emerge as the world’s most important economic entities will have profound effects on future geopolitics, governance, and corporate plans.


  1. Health reimagined – With growing health needs, is digital the best medicine?

Disruption and economic sustainability will drive the health care revolution as the search for economic sustainability in healthcare spending and compatible digital disruption increase to balance three fundamental imperatives: expanding healthcare access, while improving its quality and reducing unit costs. The digital health (mobile apps, wearables, social media, and analytics) will be providing a key part of the answer by enabling approaches that are dramatically more cost-effective. Sophisticated analytics and algorithms that diagnose and prescribe will allow providers to focus on prevention and disease management and health care to be available wherever patients happen to be with greater accuracy in diagnosis and treatment.


  1. Resourceful planet – Can innovation make the planet resource rich instead of resource scarce?

The resources transformation is at a point when demographic trends push the world’s population to 9.7 billion by 2050, natural resource constraints whether in availability or infrastructure will challenge established modes of consumption, from the individual through to global corporate supply chains. Of necessity, the future will be resource-efficient, carbon-constrained and resilient because of the growing political will, rise of renewables aided by falling costs.

In conclusion, disruption is in our midst and the speed is unprecedented. EY in this publication proposes a list of five question for those looking to seize the upside of that disruption. The first, and most important is challenging long-held assumptions about matters as fundamental as what the entity’s business is and secondly who your customers are, because disruption has a way of changing the very business that companies are in and clarifying the Company’s core activity must be the first step in reinventing the business model and because disruption more than empowering customers creates entirely new customer segments, with different needs and expectations that must be met.

The third question is about what your value proposition has become to be able to respond to the new customer expectations which may be different from the Company’s traditional customers.  The fourth question to ask is who your competitors are because responding to disruption requires making the right comparisons, including comparing yourself with the appropriate competitors since disruption attracts non-traditional entrants from other sectors.

The final question to ask is what the risk of standing still is since we tend to underestimate the speed of revolutions and make cost benefits analysis in the context of a world similar to todays, when the more meaningful comparison is against the environment that will exist in the near future.  For more in-depth analysis, read 29 page EY’s The Upside of disruption 2016 publication.

About the Author

Kelvin Chungu is an Associate Director in the Assurance, Advisory and business development service department of EY Zambia and can be contacted on for a copy of EY’s The Upside of disruption 2016 publication.


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