The problem with disruptive technology
How do providers of technology introduce innovations to industry that are so different and new that some companies aren’t ready? What if the changes are significant enough that traditional business models will also need to change to adapt to the new technologies?
This is the conundrum facing several businesses of varying sizes in Australia as a new wave of improvements hit the market. However, it raises the question regarding if Australian businesses are innovative in the global view or slow to adopt.
The Internet of Things (IoT) provides a range of options to businesses wanting to simultaneously improve services and efficiency. The ability to install sensors on ‘things’ cheaply, and have those things communicate centrally and automate processes is an enormous leap forward for facility managers. The ‘revolution of the cheap’ (the cost of sensors decreasing significantly) has enabled building managers to streamline cleaning and waste services in particular, decreasing costs immediately while improving service.
The IoT has received a lot of discussion in the media in recent times, with issues raised ranging from the threat to privacy and jobs, to the potential it will be the biggest opportunity since the invention of the internet itself.
Businesses in the facility management sector need to decide whether to be early movers and gain a head start on competitors through the adoption of technology/internet, or whether to wait for a clearer message about what exactly it all means to the business before dipping a toe in the water.
While the premise of many IoT technologies is relatively simple, there are challenges in adoption. This perspective comes from a small business introducing one such technology to the market. I will use the SmartBin experience to relate how we are navigating our path to market and share the barriers we have encountered on the way.
Consider that if we are able to introduce sensors to measure activities or areas, we can service those things when they need servicing rather than on set schedules. For example, schedules need to be set to service the dirtiest room, the fullest bin or tank – the worst case scenario – to avoid complaints and problems. But, of course, the rest of our assets are caught up in that schedule and they become over-serviced, wasting further time and resources.
Admittedly, we have been quite ad hoc in our approach to market, following the strongest leads and veins of enthusiasm. It has brought out the best and worst in companies.
Our potential market is waste bins – both commercial bins and pedestrian litter bins, recyclables (including clothing), oils, document destruction and wastewater sumps.
Many of you reading will be able to predict the reception we received from some waste companies: ‘You are wasting your time, we will never use these sensors, as we make our biggest profits when our clients bins are empty and they don’t know that we are over-servicing them.’
There is most definitely a sector of the market that holds this mindset. Part of my love of the waste industry, however, is that there are always companies big and small that are looking to improve and embrace the next improvement or the next business model. Our approach to market has been an interesting study in business management. Some companies are naturally drawn to new concepts to improve their service to clients, while some so vigorously stick to tradition, they may never change.
The challenge for waste producers (facility managers, businesses, local governments etc) is to be acknowledged as a discerning buyer of waste services. The best waste service is undoubtedly delivered to clients who know how to procure a waste service and how to manage it throughout the contract. On the flip side are the clients who buy the service and forget about it, letting the contract take its course and for the waste company to float along without having to please you.
Improvements are rarely simple
When something is brought to market that can fundamentally change the way an industry operates, it is not an easy path to make an impact on the market. History is littered with new products with exaggerated benefits and it is a fight for clients to pick the genuine contenders offering quantifiable improvements from the duds.
History is also littered with companies that didn’t progress with new innovations and were left clinging on to a business selling something that nobody wants – think Kodak maintaining the focus on film cameras while digital cameras took over the market.
While the product we are bringing to market has some traction in overseas markets, with thousands of sensors operating in 15 different countries, it hasn’t really helped me here in Australia. Potential clients want to see it working in Australia with others before they jump on board and this was our first problem.
We have conducted several trials with many companies. One trial in particular showed clothing recycling bins were being serviced three times as often as needed – costing three times the amount it should to get those clothes back to the processing site. Of course from our perspective, we expected to receive an order the next day. As we all know, however, these changes take time, as contracts are in place and budgets are set – this is our second problem.
Then it happens. You achieve the first sale and the product works as it should and saves your client money. What could be bad about that? In a competitive world, clients don’t want their competition knowing they have adopted something that will give them an edge in every tender they submit. So as much as we want to tell everyone what is happening, we can’t – our third problem.
So we will stick to referencing many of the successful rollouts around the world and keep looking for other companies that can see the most efficient way to service waste management needs is by servicing when the bins are near full capacity. Companies need to be forward thinking to grow their business on the back of real innovation.
Yes, we have faced problems along the way; however, as the adoption of the IoT is gaining pace and momentum is building, common sense will triumph, and waste companies will start providing tailored options to clients because they will need to adopt innovation to win contracts. That is the inevitable future.
David Puxty is the owner of Fernlawn Environmental, which offers solutions in tender development, waste management systems, environmental planning and landscape management. Fernlawn Environmental has a partnership with SmartBin, a waste management technology solutions company from Ireland.