Disruptive businesses grow fast, are flexible and can change tack at a moment’s notice, and while there’s no standard definition of what ‘disruptive’ is, there are plenty of examples of businesses that operate in a disruptive way. Take US mobile start-up Instagram, for example. Facebook recently bought the company for a little over $715 million – a huge sum when you consider that Instagram had just 13 staff. However, those members of staff were responsible for an application that is used by over 40 million people worldwide.
Obviously, not all businesses can be this successful, but there are a number of disruptive techniques and tools that any business can use to help give them an edge over the competition. These include being agile, using cloud-based services and rethinking the approach to research, funding and growth.
A recent report by PM Solutions showed that, typically, just 47 per cent of IT projects were successful, with the majority 53 per cent failing altogether, over-running or going over budget. Why is it that after more than 60 years of undertaking IT projects, we are continuously getting things so wrong?
The answer lies in the techniques and tools that we use. Most projects follow the standard waterfall methodology. The project is specified and then split into sections, project teams are assigned specific parts of the project and the teams then work towards the solution. Or that’s the theory. In reality, there usually ends up being a change (or changes) to the specification, which adds more time to the project. This could mean extra work, or certain aspects of the project taking longer to complete than originally estimated. These changes inevitably result in over-runs and businesses end up throwing resources at the project at the last minute to try and rescue it.
From a disruptive perspective, the way to undertake projects of any description is to forget the model and to use an entirely different approach. Agile is one such method: the Agile system splits the project into lots of smaller goals, which are typically worked towards in fortnightly or monthly batches (known as sprints). To ensure continuity and avoid unnecessary delays and procrastination, the specification is locked down during sprints, and it simply can’t change.
The intention of Agile is to try and reach a functioning stage of the project at the end of each sprint – this way there’s always something that can be delivered. Additionally, the work is re-assessed every fortnight and priorities are re-assigned, so should a more important project come along, it can then be prioritised and worked on.
Agile projects have a very good track record for delivering projects on time, and on – or under – budget. According to a 2011 survey in DR Dobb’s journal, the average success rate for Agile is 67 per cent. However, this way of working is not for everyone. Despite its proven success in the IT field and a less studied success rate for other areas, it is still a relatively new and unchartered approach to projects, which requires an entirely new way of thinking and working that won’t suit every type of business.
Working on cloud
Cloud technology is another important part of the disruptive toolkit. Cloud allows businesses to grow quickly, negating the need to risk large amounts of capital on projects and tools that might not be needed in the long run. Many businesses haven’t yet embraced the full functionality of cloud, and thus far have only been thinking in terms of online applications such as contact management, or accounting and payroll. However, if used to its full potential, in theory you can replace your entire infrastructure – including telecoms systems, IT servers, back-up devices, storage, and even desktops – for a completely flexible, capital-free and easily accountable system.
Additionally, by using cloud technologies you are no longer responsible for the running and maintenance costs, or the security of the hardware and software. You simply pay for what you use. The fee is fixed so you know exactly how much to budget. If you no longer require the service, you don’t pay any more, and if you need to expand to match your growing business requirements, you just add the additional services that you need.
Cloud also allows your business to expand without having to take on additional staff. Returning to Instagram, this is just one business that has reaped the benefits of cloud technologies. By using cloud for distribution and credit card transactions (in the guises of Apple iTunes and Google Android Play Store), the company immediately saves a huge amount of time, money and resources by not having to distribute themselves. On top of this, images are stored using the Amazon S3 cloud storage system. With over five billion images to store, the only alternative would be for Instagram to create their own vast infrastructure.
The last stage of being a disruptive business is using the web to help grow your business by hitching a ride on another business’ infrastructure. Harnessing the power of another business brand is not a new thing – the franchise industry is essentially built on this premise – but the web offers scope for so much more.
One of the basic ways to use another business infrastructure is to set up a shop on a site like eBay or Amazon. You are essentially using the huge existing brand awareness and infrastructure of these companies to attract customers and handle the transactions – even the delivery in Amazon’s case. Best of all, you only pay if you’re successful in making a sale. It's a win-win situation all round: you effectively set up your shop in the eBay or Amazon mall for free, and they get a wider range of products to sell.
You can also use business hitching to build on another company’s infrastructure and add value. Enterprises like SalesForce allow third-party businesses to build applications and connect into their customer database infrastructure. These businesses can then re-sell to their own – and SalesForce – customers, on the enterprise portal. This approach means the management, infrastructure and marketing costs are largely covered by SalesForce, while your business simply adds value.
However, as with all disruptive business practises, harnessing other peoples’ infrastructure isn’t the solution for every business. You need to trust that the business you’re hitching a ride on, or building on, will be effective at managing their resources and maintenance. Remember, if their site goes down, so will yours, and you won’t be able to do anything about it. Additionally, you’re also tying yourself into one specific supplier, which could end up limiting your business in the long run.