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Enterprises should not waste their time fighting back against the threat of digital disruption, nor should they rush into responding to it.
That’s according to Ian Johns, chief IT architect at higher education institution King’s College London (KCL), who told attendees at Cloud Expo Europe 2019 how his past experiences of digital disruption have prompted him to adopt the view that it is better to embrace change than push back against it.
“I started my career in newspapers at the turn of the century, and everybody said, ‘You should have been here 10 years ago. We were rolling in cash and we had parties every week’,” he said.
“And it was about the time [when I joined] people stopped getting their news from newspapers. That market was collapsing and newspapers needed to transform fairly rapidly to keep up. This is not something they had planned for.”
The company Johns worked for responded by diversifying into new areas, including events and radio, and it launched a price comparison website. Its competitors, meanwhile, focused on trying to replicate the business model for print newspapers online with little success.
“[They thought] if we put our newspaper online, we can charge people 50p a day to access it – and it didn’t work. What they had to do was experiment and innovate and finally settle on a business model,” said Johns.
The company he worked for is DMG Media, which publishes The Daily Mail national newspaper – the website of which is now one of the most popular online news hubs in the world.
“Far from feeling like I was 10 years too late for the party, I felt like I was there at just the right time to be part of that environment,” he added.
After nine years with the company, Johns jumped ship to Sony Music at a time when the record industry was going through its own form of digital disruption, as user interest in CDs and other physical release formats had begun to wane.
“I turned up at Sony Music and they said I should have been there 10 years ago. Everyone had stopped buying CDs. Teenagers were streaming music in their bedrooms. And the music industry didn’t know how to handle this,” he said.
Record labels started to try fight back against this change in buying habits by penalising users, rather than looking at how best to accommodate and respond to their new-found preferences, Johns said.
“The record companies [started] suing teenagers for streaming music and sharing it peer to peer,” he said. “One of the first things they did was put albums online and try to charge £10 to download them. It didn’t work.”
In the years since then, new business models have emerged around how users now prefer to access and listen to music, which highlights the futility of the record industry’s earlier efforts to stand in the way of progress, said Johns.
“Spotify now has a model where you pay £10 a month and you get unlimited content. Most of the population didn’t used to spend £10 a month on music, but they will pay £10 each and every month [now] to access a great deal more content,” he added.
“Don’t fight [digital disruption] – you’ll waste a lot of time fighting it and it’s inevitable. Instead of being King Canute, try to visualise yourself getting on a surfboard and coming in with that wave [of disruption].”
New ways of working
One of the worst things a company can do when faced with disruption, however, is rush into responding to it, while holding on to old ways of working, according to Johns.
“If your business starts to be disrupted, don’t rip up your business model immediately. It’s not going to disappear overnight. Your old physical way of doing things is still going to be bringing you revenue,” he said.
For innovation to happen, in the meantime, companies need to make it easier for employees to share new ideas to build their new business models on.
“Good ideas are completely democratic – they can come from anywhere. What you need to do is foster and encourage an atmosphere of collaboration and communication [within the company] that ensures those good ideas get to the top of the pile as quickly as you can,” said Johns.
“Your business model will change. You’re basically going to move into a high-volume, high-transaction, low-margin model, and you don’t have to be scared of that. You need to embrace that and move as quickly as possible towards it.”
For now, however, Johns is focused on making sure KCL is well positioned to face up to some possible disruptive forces that are set to shake the higher education sector in the years to come.
On this point, he quoted figures from Gartner that suggest, within the next four years, 75% of the universities in the world will have undergone a transformation of their business models and will be relying on new sources of revenue.
“This is particularly interesting in the UK because at least one of the two of the major parties is campaigning to reduce student tuition tuition fees or even eradicate them all together,” he said.
If there is one other thing Johns has learned from his time at the coalface of digital disruption in all its forms, it is that getting buy-in from senior management for an IT-led transformation is not a given.
“[Business] stakeholders don’t really care about transforming your IT department. You need to tie that story back to the business – back to the front office,” he said.
“You can do all of those things if you can demonstrate they will help you grow revenue and reach a new audience. [It will] help you foster and work with people who used to be your competitors so they become partners.”
Read more about IT in the education sector
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- Lancaster University is developing artificial intelligence software for servers that could potentially drive down the amount of energy consumed by datacentres.