The Power of Convergence

This article was originally published on March 7, 2017 and written by Rodney J. Johnson.

Convergence is an evolutionary process where multiple different systems merge toward performing similar or overlapping functions. Multiple technologies may come to serve the same roles. Multiple machines or devices may come to fill the same uses. Multiple industries may come to offer the same value propositions, either with or without knowledge of overlapping ones offered by adjoining industries.

The fundamental processes underlying convergence are several and varied. Convergence in the marketplace, among industries and companies, isn’t always technology-driven but it is almost always caused by disruption. 

Replacing of older technologies, techniques, or methods. 
Times change, the world changes. Email is a 40 year-old technology, which we still use to mimic a thousands year-old method of communication: snail mail. Email, by design, silos communication and keeps potential participants out-of-the-loop. Instant messaging and social media have evolved to replace many of the ways we are used to communicating, to be potentially more inclusive, and to be a lot more efficient. New platforms and techniques converge with older ones to supersede them.

Disparate industries converge due to shared resources.

Most of the industries in the resilience sector share the same information resources, principles and processes, employees, and customers. Real security cannot be had without intelligence. Real compliance cannot be achieved without operationally and legally well-formed policies. Real risk cannot be mitigated without business continuity planning and crisis management planning. One is preventative and one is restorative, but both deal with the same events.

Integration of disparate services then begins in earnest. 
Over time, security companies realize they can offer intelligence services to their existing clients. Law firms try to capture more of the regulatory risk value chain by offering more compliance-related services. Information security companies become systems providers, service providers, and trainers.

Rodney J. Johnson
President, Erudite Risk
Founder Resilience Cloud

Rodney J. Johnson is currently President of Erudite Risk, Co-Founder of the KBLA, and Founder of Resilience Cloud. He has spent most of his work life in Asia. Working in both the IT and the risk management sectors, he has been based in Korea and Singapore, while running companies with direct operations in Korea, China, Singapore, and India. He is the former country manager of a Korean subsidiary of a Silicon Valley operating systems start-up acquired by Samsung SDS, Korea’s largest systems integration company. Following that acquisition, he served as the chief operating officer of the new Samsung SDS–affiliated company that resulted from the acquisition.

Rodney J. Johnson is also a former technology analyst, reporting on Asian technology issues, and served as an intelligence analyst in the US Army. Over the last 13 years, he has led or been involved with more than 2000 risk management and security-related cases for multinational companies in Asia, as well as directly consulted for more than 30 of the Fortune 100. He has a BA in economics and mathematics and an MBA from the University of New Mexico’s Anderson School of Management.What customer industries is your company strongest in?

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These trends have been occurring in the marketplace forever. We have all watched (and benefitted) as car companies became finance companies. tech companies became media companies, and media companies became product distributors.

Convergence happens. Not everyone benefits from it, but most do.
When convergence occurs the operating environment for traditional technologies, products, and industries can become tough. While it may have a negative impact on those satisfied with their current position, convergence does create massive opportunity for those willing to adapt. It creates whole new industries, new products and services, and new insight for market participants.

Some of the opportunities it creates include the following.

Insight into new business models
New business models are arguably more important than new technologies. When industries can learn from other industries around them and adopt new (to them) business models, they become refreshed and can renew growth.

Insight into how parallel industries operate
Over time, companies in an industry grow increasingly set in their ways. This is natural since the feedback loop reinforces what works and works well. It then becomes very hard to find new ways to deliver value, even to the same customers, and there is little justification for searching hard for new things. Convergence gives direct access to new, yet proven, business models and methods for servicing customers that companies can immediately test against their own existing businesses.

Insight into different parts of the value chain
Integrating up or down the value chain has a variety of virtuous benefits to those who can pull it off. Integration allows more of the value of client interactions to be captured in-house, of course, but it also allows organizations to better control their brand interactions and the ultimate customer experience. These things are invaluable for moving organizations to a more favorable positioning situation. Integration allows learning and learning is always good.

In summation, learning organizations should always seek ways to converge with those in neighboring industries. Confident companies know that any change will allow them to learn, adapt, and come out on top. The end game doesn’t have to be visible from the beginning. The only thing that must be sought is change, itself, imbalance, increased entropy, because what will come out in the end will be better for the organization and the customer.

Erudite Risk

Erudite Risk offers risk management and security-related professional services for multinational companies operating in the Asia-Pacific region. With operations in India, Korea, and Singapore, Erudite Risk is ready to help you meet the challenges of Asia, the most dynamic and challenging business environment in the world.

Rodney J. Johnson is President of Erudite Risk. He has lived in Asia for most of his adult life, but still longs for good Mexican food.