Extracting value from 'disruptive' technologies

Alfredo Ingletti
01 November 2016

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Business practice

In the age of technologically-driven disruption, Alfredo Ingletti looks at how to extract value from disruption.

Over the centuries there were many advances in technology, from the industrial revolution to the internet to prefabrications and robotics. Every technological advancement has been disruptive for both business models and lifestyles.

These technological innovations have significant impacts on existing business models by creating many new competitors while reducing margins, as a result of new investments both in machineries and manpower.

So, how do engineering companies extract value from the disruptions?

The upside of disruption is that it offers an important growth opportunity to engineering companies that are able to take advantages of its forces, through fast paced learning and use of the new design tools. While it is not always necessary to revolutionise your own business models and create new ones, it is however necessary to update your own 'modus operandi'.

in this way, the main issue of discussion is the significant difference between the effects that advances in technology have on the industrial process and the impact of such advancements on the design process.

In the engineering sector, the main disruptive innovation is BIM - Building Information Modeling - representing a powerful process of development and use of a computer software model that is able to integrate data from several users. This mechanism of “knowledge transfer” within and between sectors leads to relevant technical, operational and business advantages. The importance of quality BIM-based design alongside the recognised benefits of standardised processes and technologies are highlighted by the fact that in Italy, for example, BIM has been introduced in the new code of public contracts.

But there are many reasons to consider BIM not a real disruptor, only an innovation.

The first consideration is that the innovative effects of technology in engineering and architectural process are definitely different, with respect to those in industrial world as the change substantially impacts the production process not the product.

Over the centuries, innovations like bridges, roads and the like have been quite similar. Modern bridges, for example, are not so different in respect to the Roman ones. While the materials have changed and the construction process has changed, the overall result of this process is quite identical.

Another reason not to be entirly 'disrupted' by the change of design software is that 20 years ago we had already witnessed a similar revolution - the transition from drawing with rapidograf, ruler and set square to using Autocad software.

As had happened with Autocad, in a few years BIM will be an established tool to design and every technician will be able to use it.

Obviously for smaller sized companies, it will be more difficult to survive than for larger companies, as they have fewer economic resources to invest in these new technologies. However, in a world where everything is changing, the modernisation which follows the introduction of new design software and combining new technologies with consolidated technical experiences will be the best way to seize new revenue opportunities, because time is not on our side.

Alfredo Ingletti is the chairman of 3tiprogetti, based in Italy, and will be speaking at ACE's European CEO Conference on Thursday 10 November.