The impact of these sociological and technological shifts has been far-reaching, affecting operations, customer experiences and competitive landscapes, reshaping the business world by driving innovation, enhancing efficiency, and creating new opportunities.
These technological and social shifts also bring new risks and challenges, requiring businesses to be agile, forward-thinking and adaptable. Companies that can successfully harness these technologies will be better positioned to thrive in an increasingly competitive and digital landscape, while those that resist change may struggle to stay relevant.
What is ‘Disruptive Technologies’?
Disruptive technologies are innovations that significantly alter or replace existing technologies, markets or industries. They typically start by serving niche markets or lower-end consumers but, over time, they evolve and improve to a point where they surpass the established technologies, often rendering them obsolete. Examples of disruptive technologies include:
- “Artificial Intelligence (AI)” and “Machine Learning” which have transformed industries like healthcare, finance and manufacturing through automation of tasks, enhanced decision-making and the creation of new business models.
- “Cloud Computing” which has disrupted traditional IT infrastructure, allowing startups and smaller companies to compete on a more even playing field with larger firms.
- The “Internet of Things” where everyday devices are connected to the internet, enabling real-time monitoring and data collection.
How are ‘Disruptive Technologies’ changing the business landscape?
The pace of innovation has accelerated, forcing businesses to continually adapt or risk being left behind. Disruptive technologies are shortening product life cycles and pushing companies to innovate faster to maintain competitive advantage.
Here are some of the ways in which disruptive technologies are changing the business world:
New Business Models and Revenue Streams
Technologies like cloud computing and Software as a Service (SaaS) have shifted companies from selling products to offering subscription-based services. Digital platforms (like Uber, Airbnb and Amazon) are built on disruptive technologies such as mobile computing coupled with Artificial Intelligence (AI). So-called “big data” enables businesses to act as intermediaries in peer-to-peer exchanges, unlocking new revenue streams with minimal overheads. There have been changes in the fundamental business models e.g. many tech-driven companies offer free basic services, charging only for premium features. This model, enabled by low-cost cloud infrastructure, allows companies to build large user bases before monetizing.
Enhanced Customer Experience
Businesses are using AI and machine learning to analyse customer data, enabling highly personalized marketing, product recommendations and services. AI-driven chatbots and voice assistants (like Siri or Alexa) have revolutionized customer service by providing instant, automated responses. This increases efficiency while improving customer satisfaction.
Increased Efficiency and Automation
Robotic Process Automation (RPA) has allowed businesses to automate repetitive, time-consuming tasks like data entry, invoicing, and payroll, reducing human error, increasing speed and lowering operational costs.
Disruption of Traditional Industries
E-commerce platforms, driven by advances in mobile technology and logistics, have disrupted traditional brick-and-mortar stores. Companies like PayPal, are making financial transactions easier, faster, and cheaper, reducing the need for traditional banks.
Workforce Transformation
Automation and AI have replaced certain jobs, particularly those involving routine tasks. At the same time, new jobs have and are continuously being created in areas like data science, cybersecurity and AI development. The workforce is shifting toward roles that require creativity, complex problem-solving, and technical skills. Technologies like cloud computing, collaboration tools (MS Teams, Zoom), and project management software have made remote work more feasible and efficient.
In addition, disruptive technologies enable businesses to collect and analyse large volumes of data, with cloud computing, open-source software, and other technology innovations lowering the barriers-to-entry for startups.
Disruptive technologies have broken down geographical barriers, enabling businesses to reach a global audience and helping them become more sustainable (i.e. electric vehicles, renewable energy).
What is Internal Audit’s Role in Disruptive Technologies?
Internal Audit plays a crucial role in managing and overseeing the adoption and implementation of disruptive technologies within an organisation. As these technologies often introduce new risks, uncertainties and complexities, Internal Audit helps ensure that organisations not only comply with regulations and standards but also leverage these innovations effectively, while managing associated risks.
Some of the critical roles that Internal Audit can fulfil in the Disruptive Technology environment, include:
- Identifying the new risks posed by disruptive technologies, such as cybersecurity risks, data privacy issues, operational disruptions and compliance challenges.
- Disruptive technologies may fall under new or evolving regulatory frameworks. Internal Audit ensures that the organization complies with these regulations, helping to avoid penalties and reputational damage.
- Monitoring the ethical implications of emerging technologies, ensuring that the organisation uses these technologies responsibly, avoiding issues like bias, privacy violations or data misuse.
- Helping to assess the adequacy of cybersecurity measures in place, ensuring that robust security protocols protect sensitive data.
- Assessing whether new technologies are adopted appropriately, focusing on the organisation’s strategic alignment with its objectives, budget, and risks.
- Ensuring that the change management process is well-structured to avoid business disruption, employee resistance or operational inefficiencies.
- Assessing fraud risk related to these technologies and ensuring that preventive and detective controls are in place to mitigate such risks.
- Using advanced analytics and AI-driven tools, Internal Audit can enhance fraud detection by continuously monitoring large volumes of transactions, and detecting anomalies that traditional audits might miss.
- Act as a strategic advisor by evaluating the potential risks and benefits of disruptive technologies, guiding management on how to innovate responsibly.
- Help benchmark the organisation’s use of disruptive technologies against industry best practices, ensuring that the company is not falling behind or taking unnecessary risks.
- Assessing the risks associated with these external relationships, including security, data sharing and service continuity.
Internal Audit’s role in the context of disruptive technologies is both reactive (assessing risks, compliance and controls) and proactive (advising on strategy, innovation and governance).
By performing continuous monitoring, reassessing risk frameworks and ensuring proper governance, Internal Audit ensures that organisations can safely adopt and leverage disruptive technologies while protecting themselves against emerging risks.
Partner with Us Today
By partnering with Moore, you can not only mitigate risks but also capitalize on the transformative potential of disruptive technologies to drive innovation and growth, reinforcing value in safeguarding assets, ensuring process integrity, and supporting strategic decision-making in an increasingly digital landscape.
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