Disruptive business models

Change is important. But is it enough? If the latest thinking is to be believed, then the answer is no. Disruption is the key. Disruptive technology. Disruptive business models. Disruptive thinking.

In this paper we explore what disruptive means and its implications for internal audit’s role to enhance and protect an organisation.

What is meant by disruptive?

Disruption in the context of technology or business models is something that makes what came before obsolete. It replaces a process or way of thinking rather than builds on it for improvement.

It is radical. It is new. It is unsettling. It disturbs the status-quo.

Disruption is readily evidenced in the private sector, yet, in the public sector, digital transformation has proved slow. Only in 2018 were the NHS told to stop buying and using fax machines – and that’s just one example.

Could rising costs, social unrest and political change cause the protectionism of the public sector to breakdown? Will disruption be the route to survival?

Classic examples include:

  • Before Airbnb, few people thought of offering their spare room to a stranger. From humble beginnings in 2008 it is now a rental portal with over 5m properties across nearly 200 countries. Demolishing barriers to entry in the market for business and leisure accommodation worldwide.
  • The 90’s spawned the coffee shop phenomenon. Prior to this the choice was principally between a thermos flask and a traditional teashop in the UK, invariably for tea, not coffee. Starbucks and Costa changed this. They revolutionised the market.
  • In 2010, Metro Bank UK was the first high street bank to be licenced in almost 100 years. In a market where establishing credibility takes time, its disruption impact is open to interpretation, particularly following a regulatory breach in 2019.
  • Lovefilm first disrupted the movie rental market with a…