Competitive Disruption Can Be a Company Killer Without

the Right Strategy

Author’s Corner

In this white paper, Mike Demko, Professional Services Director, talks about the challenges of disruptive technology. He advocates for strategic outsourcing as a transformative approach to reducing costs, streamlining operations, and accessing specialized skills for staying relevant in the rapidly evolving technological landscape.

Please click on the video to the right to learn more about the author, hear his insights on this white paper, and learn what motivated him to write about competitive disruption and how it can be a company killer.

To discuss this white paper in detail, please contact Mike using the information provided at the bottom of the page.

Disruptive technology is all around us, and the proliferation across nearly every industry is making headlines every day. But how do you know when you need to pivot your company and do things differently? Switching out technology can be very expensive. And, even when you’re looking at a wonderful sales pitch with a generous business case, you could be facing a massive retraining effort and could possibly need to hire new people with new skills.

Plus, the business case rarely addresses the base case or worst-case scenarios. However, there might be a better way forward in which you can get the value of disruptive technology without the aforementioned downsides.

What Has History Taught Us?

Some of the most noteworthy corporate failures were due, directly or indirectly, to a management team that could not accurately predict how the disruption would crush demand for a product or how quickly change would take root. These failures become great MBA case studies.

Let’s examine a few in the chart below. Notably, the companies in Figure 1 were leaders in their respective industries, and many saw the threats head-on, mostly in disbelief that they were significant.

Toys “R” Us is a great and sad example of a company that failed to adapt. I was a list maker in my youth for all of what I considered “important stuff.” If you’re old enough, you too may have vivid memories of walking through the aisles making mental notes that would find their way to the three-ring binder reserved for homework and several versions of your annual birthday list. But nostalgia couldn’t spare Toys “R” Us, even after a capital injection from several investment firms. It didn’t pivot when its venture capital saviors had to step in. Online shopping was still growing by double-digits, and it was easier for the consumer to shop at Target and Walmart. Toys “R” Us filed for bankruptcy in 2017.

And then there was Kodak. Before the advent of Instagram or Facebook, there was the “Kodak Moment,” an occasion suitable for memorializing with a photograph. Kodak was THE photography industry. It had a near monopolistic hold on camera and film sales in the 1970s. It was credited with the invention of the first digital camera, created an online print and share application, and, by all accounts, had everything it needed to thwart eventual bankruptcy in 2012. What it ultimately failed to understand was that digital photography and online sharing was not a side business. Kodak’s moniker needed to shift to its core film and print business. Kodak was filled with very smart people, but most of them had to find new jobs because they could not pivot away from its cash cow.


Know Your Core Competency

To understand how to address the changing landscape of technology and disruption facing your livelihood, you must first recognize your core competencies. Is your firm best suited to bring you forward? Look at how you make money today.

Are you developing new products and integrating those into your infrastructure? In most cases, the answer is no. Specialized companies are developing better mouse traps and bringing them to the market while you are maintaining what you have, making minor updates, and implementing regulatory requirements, all while trying to keep a sharp focus on your customer.

Your Best Options to Keep Moving Forward

Assuming you agree that getting from A to B might not be in the cards with internal resources. Even if cash is tight, you still have options to make sure you stay relevant. Here are just a few options you should consider to bring your organization forward:

  1. Outsource non-strategic functions as a funding mechanism to enable your transformation
  2. Contract with an outsourcing firm that already has next-generation technology embedded in its operation


Outsourcing as part of a transformation strategy can provide a means to reduce onshore labor costs, streamline operations, and allow you to tap into specialized skills that may be difficult or expensive to source in the U.S. Depending on the scale of your outsourcing, both options could fund your transformation journey. You’ll need to decide how quickly and which functions you should move.

It is important that you approach your outsourcing partner strategically. This is a $350 billion dollar industry and growing, so you have some choices. You want a long-term, trustworthy partner with a shared vision, shared goals, and incentives to continue pressing for efficiencies. Even if you start small with an FTE model, look for a vendor who is willing to drive out costs and allow them to share in the benefits so you both win.


1. https://hbr.org/2016/07/kodaks-downfall-wasnt-about-technology

2. https://knowledge.insead.edu/strategy/strategic-decisions-caused-nokias-failure

3. https://kruschecompany.com/global-outsourcing-sector-statistics-facts/


Meet the Author

Michael Demko - Professional Services Director

Michael Demko, for more than 20 years, has held leadership positions in some of the largest companies in the healthcare industry delivering cutting-edge technology layered into strategic outsourcing deals. Prior to joining Vee Healthtek, Mike worked for IBM, Accenture and EPAM, structuring and delivering solutions for the healthcare industry. While at IBM, his success was recognized with the prestigious Eminance & Excellence Award for outstanding consulting work he did with a large BCBS plan. He was a Partner at Accenture for nearly six years where he received the Health and Public Service Excellence Award for a large, strategic deal that he led with a top five payer. Additionally, he was Chair of a 13-State steering committee where he spearheaded a shared software development program saving millions in taxpayer dollars for the Medicaid program, an effort that was recognized with the Governor’s Award for Public-Private Partnership.