Created on 2018-04-05 08:04
Published on 2018-04-05 08:09
Disruption is a state where the circumstances cross the margin of error factored in a business model. Identifying the areas in which margin of error can happen and the ability to factor most significant areas are the real challenges.
The broad areas are competition, substitute product, substitute channel of supply chain, volatile customer segments, volatile product mix, speed of flexibility while responding to small trends of disruption etc. Competition in same business model is most common. Competition in factors of production is emerging faster e.g. finance wanting to buy marketing function at premium and discounting manufacturing function for outsourcing.
Technology is merely a facilitator and not driver of the disruption and same is applicable to information. The ability to incorporate the technology and information in the business model defines the pace of innovation that can overcome the disruption. For example when emergence of electric cars are clearly on horizon, how automobile industry is factoring it will decide their fate.
The business intelligence (BI) that forms basis of the process of factoring the margin of error is the result of detailed data warehouse that capture, retain, analyze internal and external factors that are affecting the business model. Most of the organizations in MSME are far behind in building a proper data warehouse of lots of internal data and information. For example Very few can answer product segment wise business model performance across 5 years from reasonably short span of a week/ month. Technology is available to solve these problems but multi qualified people (e.g. Accountants with database knowledge, engineers with finance knowledge, accountants with management accounting exposure etc.) who can relate the data in different context, do the analysis and generate an information are in scarcity.
If nothing appears disruptive to the entrepreneur and at same time finds difficulty in sustaining or growing then you should first start building your data warehouse as a foundation for your BI.