Technology and business
Fergus Caheny 17 Aug 2017 03:27pm

Business needs to adapt to disruptive technology

Businesses are staring the next disruptive tech event in the face, so need to be aware of what opportunities and risks they face.

The iPhone recently made news as it celebrated its tenth anniversary. By embracing and consolidating new technology and innovations in unrelated industries, Apple managed to entirely disrupt the mobile phone industry, driving it in a new direction. This disruptive influence created a seismic shift that led to even further innovation, not only in the mobile phone industry, but in the creation of new industries.

Uber serves as another example. It used innovation and consolidation of new cutting edge techniques to such a great extent that it disrupted something so mundane as taxi hire. Disruptive companies recognise and embrace waves of innovations that enable them to become market leaders.

Today we are at the dawn of a new disruptive period. The constant innovation of the recent past has brought about the next disruptive phase through the development of new industries, such as Artificial Intelligence (AI).

AI has witnessed a leap forward in the past couple of years due to the increased financial backing that has commercialised the sector. This, in turn, has led to even more funding as the AI sector establishes itself as a stand-alone asset class. In recent months we have seen the launch of a number of dedicated investment funds, expanding it to an even wider audience.

Even now we are only scratching the surface of what these new industries have to offer and, as these areas grow and become more refined, it seems likely that the next major disruptive shift is now upon us. This new disruptive phase will not be isolated to a handful of visionary companies but we expect to see a tidal wave of cutting edge companies, in multiple industries, breaking through.

Your business needs to be adaptable and receptive to change. The adoption of AI does not necessarily mean the transition of your entire human workforce to a computer but rather the re-deployment of human capital away from mundane tasks, such as data entry, to positions where lateral thinking is prized.

Technology is unlikely to fully replace the workforce because at the heart of almost all businesses is the human to human relationship. Your skilled employees are the most critical asset that any business retains and embracing technology, such as AI, to compliment and enhance the skills and attributes of individuals would likely increase the productivity of a company.

One crucial risk area to businesses we’ve seen in recent times is that of cyber security. Recent attacks such as the WannaCry in May, the attack on Parliament or the Petya ransomware attack on WPP in late June have brought this further in to focus.

We recently conducted research that indicated that close to 50% of businesses did not even have a cyber security plan in place for their business. A plan for cyber security needs to form part of any business plan as the absence of one for an outside investor looking in could prove disastrous.

Fergus Caheny, partner and head of the technology group at Smith & Williamson