As discussed in my previous posts, digital is introducing newer simpler business models and changing the business landscape. One of the methods to identify new opportunities with digital is to look at disintermediation.
Let’s start with the definition
(noun) reduction in the use of intermediaries between producers and consumers
I would like to look at disintermediation from a perspective all of us, as consumers, understand – consumer retail. Let’s look at a very simplistic view of traditional retail – look at the intermediaries involved from the point a product is manufactured to the point it reaches the consumer (bear in mind that the actual process is lot more involved – with warehouses, logistics providers, shipping companies etc etc . being involved)
First set of disintermediation in this space was with the online only retailers – biggest and the most influential being amazon made this more efficient with their no physical storefront models
The final picture in the series is where a consumer products company, be it a telco providing mobile and sevices or a FMCG company selling shampoos, reaches out and interacts directly with the consumer.
Disintermediation has bought businesses much closer to their end consumers – bringing in fresher insights about what consumers want and driving deeper loyalty.
Further proof of disintermediation at work, is the numerous successful product/service launches through kickstarter and other crowdfunding platforms.
Does this apply only to consumer facing parts of your business?
This concept of disintermediation can be extended to organisational silos which exists in large organisation.
- HR, for instance, can today get much closer to employees
- Corporate Strategy can be improved with inputs from rank & file
- Procurement savings can be identified and delivered by employees
- Factory workers can share best practices on manfucturing with other sites
- Retail stores can contribute to merchandising and launch plans
Technology has made it so much easier for us to identify disintermediation opportunities.
So, what can you disintermediate today? To identify opportunites, we can use design thinking, business model generation and other techniques to look at the value chain. But to execute on the value delivered by disintermediation, you need a strong suite of digital solutions.
In conclusion, watch out for disintermediation – this could disrupt your function or industry and be the basis for an opportunity to transform.