What to do when disruptors come knocking

Soitron UK's Daniel Olsson explains why being the middleman is an incredibly valuable position today.

It’s been said so many times before, but the fact that the world’s largest taxi firm, Uber, owns no cars; the world’s most popular media company, Facebook, creates no content; the world’s most valuable retailer, Alibaba, carries no stock; and the world’s largest accommodation provider, Airbnb, owns no property… something big is clearly going on.

The point is clear: companies that control the interface between the consumer and the provider of the goods or services are in an incredibly valuable position. They carry none of the costs of providing the service but take a cut from the millions of consumers that buy from them. The interface is where the profit is.

We live in uncertain times; a particularly disruptive era with communicators facing a perfect storm of challenges. The upturn in the global economy has seen new brands enter old markets and small innovators rapidly expand, challenging traditional brands and industries. The fear that a company’s respected, market-leading brand is about to come to an end is no longer a laughing matter.

For example, if we look at the photography sector and the popular music industry; we still take photographs and listen to new songs, but the days of Kodak and your weekly trip to HMV are gone for good.

From bankers nervously eyeing up the latest fintech trends, to book publishers wondering if they’ll still be in business in five years time; we live in times of rapid change and disruption. To quote the father of the whole disruption trope, Clay Christensen, even the biggest, most dominant players need to realise that they are not there by Holy Writ: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.”

Avoidance of buggy-whip status: quite important!

So, what could businesses do in order to avoid falling afoul of this ‘new’ world?

It’s been suggested that by minimising overheads, making a business leaner and more agile, is key, as it allows a business to move quickly as and when needed. This goes for all departments but it’s absolutely crucial for any internal heads of IT to receptive to.

Why? Because sticking with a rigid outsourcing agreement for your IT development could prevent you from standing up to today’s savage competition and thus make you lose out on important market share.

Better is adoption, say experts like Deloitte, of something called staff augmentation – a flexible project-specific sourcing solution that enable companies to draw on skilled expertise, flexing up and down, as and when needed.

The best way of accessing this type of resource is through staff augmentation and outsourcing through nearshoring of talent in the CEE (Central and Eastern European) region (think Slovakia, Bulgaria and Romania). That’s because the talent is in abundance; they speak the right languages, know the right ‘code’, have track record in building great systems and are extremely cost-effective. Staff augmentation best practice starting to show very strong returns and is starting to replace the traditional contractor strategy.

In this current ever-changing environment, businesses need to learn to adapt; especially when it comes to standing up to competitors.

The opportunities are there so whatever you can grab is worth looking at, quite frankly, unless you want to be what Gartner used to say is: “The best – but last – buggy-whip manufacturer in town”.

Daniel Olsson is the Director at Soitron UK, a provider of near-sourcing and staff augmentation solutions.

Praseeda Nair

Praseeda Nair

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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