Unit 8 DB 1 

The impact of disruptive technology:

It was the year 2005, and Eastman Kodak had just celebrated a banner year with $11, 895,000,000. In revenue. Much to its dismay, that would be its best year in recent history. From 2005 to 2012, their revenue declined until it hit its bottom at $812,000,000. Since then, its revenue has remained relatively flat (Statista, 2022).  This is a case study of how good management practices can have a negative impact if an organization does not invest in disruptive technologies. Perhaps this very concept can seem counterintuitive, but the idea is simple. Kodak was a successful company that was the incumbent organization in the digital camera revolution. It had most of the filmmaking market share and fine-tuned its processes to be efficient. Kodak’s management team was an example of “Christensen’s theory of disruptive technologies (Lucas, 2009). This theory suggests that managers do not invest in disruptive technologies because it is not a rationale financial decision for senior managers to make as it is an investment that disrupts their well-established revenue stream for a riskier one (Lucas, 2009),   Investments in disruptive technology is often done by underdog organizations seeking to enter the market. “The decision-making and resource allocation process that make established companies successful cause them to reject disruptive technologies (Lucas, 2009).

As a result of Kodak’s management team decided not to invest in digital photography, its business became obsolete when the need for the film went away and was replaced by digital camera systems. The digital camera offered great capabilities, including taking many photos at no cost; the user could delete unwanted pictures and transfer pictures electronically. In what seemed to be a transition almost overnight, film cameras were replaced with digital cameras, and customers no longer needed to purchase film for their cameras. Kodak no longer had customers to purchase its film and with that went its revenue stream.  

Relevance and Impact:

When developing a sociotechnical plan, disruptive technologies' impact must be considered. Users tend to want to gravitate to the latest and greatest thing that comes out in hopes of realizing greater efficiencies or prestige for having the new technology. A sociotechnology plan will evaluate the adoption of a technology by a group of people and seek to ensure that adoption is successful. However, if newer technology is released during the implementation of that change, the users may discard the one for the sake of the other.   A second force that could affect technology adoption is the “learning curve.” How intuitive will the new technology be, and will it require training? How hard will the training be, and will the “training curve” affect the end user's desire for adoption? This is relevant because the impact of disruptive technology, the decisions to adopt it or wait, and the ease of end-user training will affect the implementation of new technologies.

As an example, I am currently implementing an improved access control system for an organization I am consulting for. They have used the traditional user id and password method for over 15 years. The only change to their model was the ever-increasing need to strengthen the passwords migrating from a length of 6 charters to 8 to 12. In our new model, we are adding multi-factor authentication to the mix to further strengthen the organization's access controls. Our first realization was that end user pushed back on this new technology as they did not understand how to use it and if they were sacrificing any privacy with its use. In the very same week that we had thought we had overcome user adoption challenges with our awesome training program, we faced a new challenge. A board member had approached us with a request to investigate a new technology offered for sale in which no passwords would be needed. A true passwordless technology has been created that makes user ids, passwords, and multi-factor authentication a thing of the past. A disruptive technology emerged just as we were about to declare victory on our new access control model.   

With regards to a socio-technical plan, the risk of disruptive technologies must be considered. The current paradigm as to how things have been done in the past must be able to be challenged as new ideas emerge. Further, organizations should keep an eye to the future and invest in these technologies so that they can be the industry leader in the change rather than giving up their leadership position to the new technology and risk becoming obsolete.    

 

References

Lucas Jr, H. C., & Goh, J. M. (2009). Disruptive technology: How Kodak missed the digital photography revolution. The Journal of Strategic Information Systems, 18(1), 46-55.

Statista. (2022, October). Revenue of Eastman Kodak. Retrieved from Statista: https://www.statista.com/statistics/277061/kodaks-global-revenue-since-2005/