'Disruptive' internet challenges business, warn analysts

IDG News Service — Wed, 07 Nov 2007 12:00:11 -0500

By Tash Shifrin, IDG News Service

Businesses and public sector organizations face a wave of disruption from the internet as well as enjoying its benefits, Gartner analysts have warned.

"The internet is going to disrupt business," research vice-president Kimberly Harris-Ferrante warned delegates at Gartner's ITxpo in Cannes, France.

Consumers were now readily using the internet to broadcast bad customer experiences to others, she said, citing an unnamed U.K. insurance firm which discovered its Wikipedia entry included a link to an "I hate this company" website set up by a disgruntled customer.

"The internet is not just positive, it's also going to have a negative, detrimental impact if we don't manage it properly," she said.

Harris-Ferrante said businesses could also face "many indirect impacts" from adopting new technology. Focusing on the insurance industry, she described how "black box" technology that recorded how consumers drove their cars could be used to create "pay as you drive" insurance packages, rewarding drivers who drive less frequently or mainly during the day with lower premiums.

But such systems tried out by Norwich Union and other firms had raised issues of bandwidth limitations, the need for data mining and new billing systems, she pointed out.

Andrea DiMaio, a distinguished analyst at Gartner, said the public sector faced similar issues. "Government is going through significant disruption because of the internet," he said.

Public sector organizations were increasingly delivering services online, but this created expectations from users about service levels "that government websites and portals can't provide", he cautioned.

A "much more significant" second wave of disruption was set to break as consumers took up Web 2.0 , he added.

Government portals were "going to become irrelevant" in the face of new types of internet channels.

Consumers would make use of new routes in to services, such as "mash-ups" that bring together content from a range of sources, and go through "the channels they choose," DiMaio said.

Mash-ups were "the one that's going to be really important," he said. But the new-style internet would harness "the power of integrated services and information in ways government agencies cannot predict."