Industries left, right and centre are being infiltrated by tech-driven startups willing to address prevailing inefficiencies and achieve a superior customer experience. Against this backdrop, many incumbents are realising that unless they ride the wave of disruption, they’ll by swept away with the status quo.
This week, for our exclusive “Let’s Talk…” feature examining disruption, we asked 17 thought leaders to discuss the industries they feel are riddled with inefficiencies.
Legal, financial services, property, travel, real estate and retail were amongst the industries considered overripe for disruption; however, as one commentator noted, “Any industry which fails to focus on diversity… is not meeting its full potential, is inefficient and is vulnerable to disruption”.
Read on for further insights from this week’s line-up:
Bohdi Lewis, Head of Digital Strategy & Innovation, Host/Havas: “As a strategist in a creative agency I’ve spent my entire career dipping in and out of almost every industry, working with heads of marketing, chief technology officers, CX teams, Finance departments and so on to uncover creative ways to deliver value to both the business and customers alike.
“What have I learned? The bottom line is that all industries are experiencing the same challenge: How do you effectively bring together product, people and technology to create more cohesive and valuable experiences? And, perhaps more pointedly, how do you unlock the entire spectrum of available data to do so in an efficient way?
“But of all the industries, the ship that feels hardest to turn around, is banking. In an industry where 80% of profits go back to shareholders (according to the Australian Bankers Association’s latest advertising campaign), what chance does it have of truly delivering transformative customer experiences?
“As customer-centricity races to ubiquity in the business world, there are infinite fintech startups introducing much smarter and more efficient ways to manage and move money. But it’s the big banks stunting progress as they continue to hold their cards close to their chests, preventing all of us from taking ownership of our personal data to give us more financial freedom.
“If the banking industry doesn’t open up and deregulate via open data and the API economy, then the foreign tech giants will take advantage of these inefficiencies and colonise (like Google in advertising and Amazon in retail) and disrupt the industry.”
Trena Blair, CEO of FD Global Connections: “Any industry which fails to focus on diversity – that is gender, race, religious beliefs, age, culture, sexual orientation and physical capabilities – is not meeting its full potential and is inefficient and easily disrupted.
“Australia is world renowned for its multi-cultural population. Industries are a microcosm of the communities they serve, and Australia is ideally positioned to take a global lead by applying diversity policies. Industries which do not reflect this fail to benefit from diversity of thought – a rich mixture of deep and meaningful insights to solve real problems.
“Whilst some industries understand the benefits and are pivoting towards a diverse employee base, other organisations remain grounded in old-school practices. Some startups are driving the cultural change and awakened industries are beginning to follow. However, too many organisations continue to ignore the full benefits of diversity and therefore, the community they serve.”
Dr Amantha Imber, Founder of Inventium and author (‘The Innovation Formula’): “Legal. The advances we are seeing in legal software that can do the job of a junior lawyer have big implications for the industry and traditional career paths. Legal tech start-ups are harnessing the power of Artificial Intelligence to proofread legal documents and conduct legal research, reducing many of the efficiencies in the industry. Firms need to embrace this disruption and have a strategy for how they will incorporate these new technologies into their operating and business models.”
Jamie Pride, serial entrepreneur, VC and author (‘Unicorn Tears’): “Customer contact and support centres. The first wave was to move this function to cheap labour offshore. The next wave will be to replace this offshore labour with machine learning/bots. Think about it? If I can teach a program to know everything about your company’s products, processes and customers, then it is going to be much better placed to handle basic customer enquiries. Plus, these programs will learn from the most frequently asked questions and get better over time. Add to that a chatbot style interface… I’d much rather get a response now from a machine learning chatbot than wait on hold for 30 minutes to get a response from an offshore call centre.”
Mike Edmonds, Founder & Chairman of Meerkats Creative Business Solutions: “My perspective is marketing inefficiency. It’s harder to quantify than, say, employee productivity, but it can be more costly to a company. I think the worst offenders are service industries – banking, insurance, telcos. Companies that have largely parity offerings, that become addicted to researching what consumers want, and then pretendi that’s what they stand for too via endless, expensive marketing activity. The biggest disrupter in the last hundred years of commerce is the internet. It means every consumer can share the truth about your company instantly and globally. Truth is your path out of the chaos. Not more marketing.”
Taryn Williams, Founder & CEO of theright.fit and Wink Models: “Having spent sixteen years working across different areas of the creative talent and media industries, I have witnessed or been part of inefficient processes including late or non-payments for talent and manual processes, which slow things down and increase costs. I started my companies, Wink Models and theright.fit, as ways to disrupt my own industry and create better outcomes.
“Social media and technology are both disrupting the industry, in a good way. For example, social media allows individuals to build and promote their personal brand online for minimal cost and blogs or websites provide the opportunity for content creation. Online marketplaces are also providing a timely and efficient way for brands and agencies to connect with creative talent and produce beautiful campaigns within their budgets. Through some of these platforms, talent are also getting paid much quicker than in the past which is a huge boost to the industry.”
Craig Harris, COO of Deputy: “Focusing on a specific industry is, I think, not the core issue with inefficiency in business. Inefficiencies are almost expected once a company reaches a certain size. Most people think of these large enterprise companies as being quite advanced and sophisticated, and so more likely to be early adopters of new technologies in their business — the reality is far different.
“Often it is the smaller businesses that are most looking to find efficiencies internally as they more readily see a link to stronger profitability when it is needed most. For our larger customers, there are so many hurdles they have to get over to make even the smallest systemic changes and this in itself is an example of rampant inefficiency.
“But what is creating these all too common hurdles? Often, it’s due to a rational fear of security flaws. One of the biggest points of resistance usually comes from the technology division, which is sensitive to anything that could be remotely seen as a security risk, and so it’s just easier to remain with the inefficient system.
“While not every large organisation follows this trend, it is fairly commonplace, to see outdated legacy software or super manual processes that are hindering the efficiency of big business.”
Michael Stelzer, Vice-President of Verint ANZ: “Varying organisational inefficiencies span different industry sectors but one area that is currently causing issues across the board is customer engagement and experience. To keep customers engaged, organisations naturally need to put them at the centre of their business strategy and continually look for ways to go above and beyond in service.
“Intelligent and well-applied technology solutions, like speech analytics and workforce optimisation tools, can enhance customer engagement for both organisations and the customer. Strengthening company-customer relationships can directly drive loyalty and revenue while enabling an organisation to remain operationally efficient in other areas of business. There are always opportunities to re-evaluate operations and performance. Doing so ensures the right foundations for achieving efficient processes in business are discovered, and sustainable business outcomes achieved.”
Mick Spencer, Founder & CEO of ONTHEGO: “I would say the uniform industry is becoming inefficient as it is not taking advantage of digitisation to streamline the planning, execution and logistics process. The fact that the current systems create long lead times from standard offerings, in turn, affects the lack of choice and customisation available to customers in this industry.
“People are used to receiving things instantly or on-demand, so a quick turnover is expected. It’s high time this kind of convenience is applied to the uniform industry.”
Andrew Johnson, CEO of Australian Computer Society (ACS): “Digitisation and automation are transforming all industries. It is not so much a case of an industry becoming inefficient, rather a new market entrant has found a way of becoming more efficient – or has been able to achieve a better customer experience as enabled by technology.
“The retail industry has attracted much media for the global phenomenon that is Amazon, and incumbents are having difficulty attracting historical foot traffic into their stores as they continue to pay significant leasehold costs. In the US, this has seen over twenty retailers file for bankruptcy protection in 2017, including well known chains such as Toys R Us and Payless.
“It would be unfair to single out retail, we can see how Uber has disrupted taxis, and the potential for driverless cars and unmanned aerial vehicles (UAVs) to transform freight and logistics.
“The Australian Government is trialling facial recognition at Canberra airport. Imagine walking past the customs line seamlessly without producing your passport. Wherever your customer has a pain point, where there is friction in supply, there is an opportunity to use technology to disrupt.”
James Coyle, CCO of SuperEd: “The wealth management industry has become inefficient because many players have become disconnected with their customer base. They are large financial institutions that have often grown as a result of third party distributors, or perhaps through the compulsory superannuation system. Scale is often a key driver of success as it enables costs to be kept low and access to more diverse asset classes.
“Responding quickly to customer needs and tailoring products appropriate to those needs hasn’t always been in their DNA. Even when the intent is good, they have lacked the mechanisms to do this efficiently. This is changing but the slow pace of that change is just exacerbating their current inefficiency.”
Allan Waddell, Founder & CEO, Kablamo: “You could build a business solely around cleaning up the technical deficit left by the enterprise-scale tech consultancies. It’s not uncommon for my team to arrive at a large enterprise where a technology consultancy has been paid in full…despite leaving things unfinished, unsecure and broken. In almost any other industry this kind of behaviour would be fatal but because of its complexity, technology lends itself to smoke-and-mirrors solutions and acceptance of fuzzy outcomes. Disruption of this old, broken way of doing things is simple, but not easy: delivery has to be quick, secure and beyond expectations. If it is, there’s no going back and expectations from technology implementations will be changed forever.”
Sarah Riegelhuth, Co-founder & CEO of Wealth Enhancers and Grow My Team, and Author (‘Get Rich Slow’): “Finance. Over the past ten years the amount of compliance and regulation within the financial services industry has become hugely onerous. The industry is ripe for disruption, and it is happening, but probably not fast enough. Ultimately the customer pays, as the increased burden for businesses means an increase in staff and costs.
“Technology has to be the answer, and AI is promising when it comes to checking documents and red flagging things for attention. Not to mention chat forums and advice articles which provide answers to less complex topics where a professional financial planner may not be required.
“Many firms are still yet to value the business of Gen Y and often fail to provide then with effective financial advice. As Gen Y get older and place more importance on financial planning, firms are going to have to take notice and adjust in order to remain competitive.”
Dominique Grubisa, Founder & CEO of DG Institute: “In the past, it made sense to sell your home via a conventional real estate agent. However, with the rise of easy-to-access property websites it is harder to justify paying someone more than two percent of your sale price to ‘show a few people around’. Property Now and Purple Bricks are two examples of disruptors in this space. Meanwhile, peer-to-peer lending is disrupting the housing loan markets in the USA and UK and I expect it is only a matter of time before it hits Australia.
Greg Taylor, Group VP (APAC) with New Relic: “I see two major industries that are becoming inefficient, transaction banking and travel/transport.
“Transaction banking is an industry that is increasingly being disrupted by the digital revolution. Current payment systems are outdated – slow to settle, hard to reconcile and cumbersome to send and receive. As customers grow accustomed to faster and more convenient payments through digital, mobile and social media, they are demanding similar conveniences and service levels in transaction banking. The traditional payments customer persona is fast being replaced by one that expects a personalised experience from banks similar to that of other industry players like Apple.
“Travel and transport is another industry that is quickly becoming inefficient as it trying to keep up with increasing customer demands for fast and convenient digital services. This industry continues to be very people heavy. Despite the growth of digital-first sales platforms, many travel businesses have failed to leverage the technology available to create integrated ecommerce platforms to book trips, accommodation or facilitate check in and check out of hotels. Those who move quickly and drive digital customer experiences will be the ones to win in travel and transport.”
Rhys Taylor, Regional Director of Aerohive: “Retail is a well-known example of an industry struggling to compete with new digital players. While the arrival of Amazon in Australia has been muted, the threat is very real. There is a future for physical retail, but it needs to operate in parallel to a seamless digital experience, with flawless customer service and fast and reliable logistics.
“As we’ve seen with the success of Uber, traditional taxi and car rental industries have been ripe for disruption. It’s often easier and cheaper to use Uber for a couple of days than rent a car, and payment is seamless and transparent.
“We also anticipate significant disruption in the post and delivery sector, with services such as Amazon Key. As online shopping increases, expanding into groceries and other categories, Australians in metro areas will expect same-day delivery just as their counterparts in the US and other world cities enjoy.”
James Chin Moody, Co-founder & CEO of Sendle: “With the advent of online retail, traditional ‘offline’ retail outlets run the risk of becoming outdated and inefficient. Not only do they have the burden of physical store space, but it is hard for them to know as much about their customers as their online brethren because online merchants can track every click, every page and every purchase. They can use this information to optimise the shopping experience for that particular customer, and even recommend what to buy next.
“One of the things that is accelerating this increasing efficiency for online sellers is the rise of simple, reliable and affordable logistics. This eliminates many of the major pain-points for online shoppers and turns them into a key advantage – having goods delivered straight to your door.”
James Chin Moody, Co-founder & CEO of Sendle: “With the advent of online retail, traditional ‘offline’ retail outlets run the risk of becoming outdated and inefficient. Not only do they have the burden of physical store space, but it is hard for them to know as much about their customers as their online brethren because online merchants can track every click, every page and every purchase. They can use this information to optimise the shopping experience for that particular customer, and even recommend what to buy next.
“One of the things that is accelerating this increasing efficiency for online sellers is the rise of simple, reliable and affordable logistics. This eliminates many of the major pain-points for online shoppers and turns them into a key advantage – having goods delivered straight to your door.”
Related articles: Let’ Talk… Disruption (2017), Let’s Talk… Technology and Let’s Talk… Fintech.
About “Let’s Talk…”
“Let’s Talk…” is an exciting weekly initiative that provides entrepreneurs and industry experts with a forum to share rapid-fire views on a range of issues that matter to start-ups and SMEs. Every Wednesday, we pose a themed question to a line-up of knowledgeable industry figures, with a view to picking their brains for valuable insights to share with you, our readers.
