Is Uber a technology company or a transportation company? It doesn’t have company-owned vehicles or direct employees as drivers. Its market valuation would indicate it’s a technology company. So how does a technology company impact an old, inefficient and low customer experience industry? By creating a premium customer experience via a two-way digital platform that is fast, easy and reliable to use.

Uber disrupted the transportation industry by making it more attractive and less expensive to Uber (it’s a noun and a verb) than hire a car or use personal vehicles. Not only did Uber convert existing taxi users, it created new transportation demand at the same time. Supply also increased as driver recruitment was made easy by hiring contractor drivers through the same platform. It’s an extraordinary example of how technology disrupted an industry.

Amazon is a different story but with similar dynamics and equally disruptive outcome. Developing technology to create new demand and supply of goods using a fast, easy and reliable process to purchase online and provide a premium customer experience. We all know the impact Amazon has had on the retail industry as stores are closing at a record pace. Amazon has entered virtually every industry to some extent using their platform to solicit new suppliers and increase customers. Amazon’s recent acquisition of Whole Foods rocked another industry and solidified their strategy to selectively leverage brick and mortar outlets.

Who’ll Do the Disrupting?
Uber and Amazon decided to disrupt rather than be disrupted. What’s it going to be for the building materials industry? Neither of these companies were an incumbent in their current market place. Outsiders to an industry have freedom to think differently about exceeding customer needs and expectations. Digital platforms have reduced the classic barriers to entry and will make previously unattractive markets ripe for exploitation through new business models, tools, and value creation.

To date, most technology deployed in building materials is focused on either back-end systems to improve operations or front-end systems such as web sites, configurators, or customer relationship management systems designed to support existing buying processes. Digital advancements will occur at an accelerated pace as demographics change and companies develop internal capabilities to write software designed to alter traditional approaches. New entrants to the market are going to accelerate the pressure to evolve even faster.

Prepare to Be Challenged
Digital Transformation of the building materials industry hasn’t yet reached critical mass, but it’s coming. The industry needs to adopt a new way of thinking about customer experience, and begin leveraging digital technology to deliver new value. Some companies in the industry are developing the capability and expertise but aren’t moving fast enough.

Where does the industry go from here? What is the necessary catalyst to encourage the incumbents?

Going digital is not about the technology itself. It’s about the technology enabling a great customer experience through innovative business models. Many companies are either buying or writing software with the hopes of improving their businesses. Are they moving fast enough to stay ahead of external challengers and monetizing those investments? Successful digital models can create new demand, new markets, higher revenue, higher margins or all four.

Examples include software designed to provide:

  • The ability to leverage “big data” and artificial intelligence to forecast markets, manage pricing, measure customer value, and optimize business processes.
  • The lowest-cost manufacturing, warehouse and logistics management systems.
  • An easy, fast and reliable online platform to inspire, educate, configure and transact for products.
  • A wide-reaching marketing automation system to raise awareness, generate leads, and direct customers to specific channels.
  • A channel-agnostic approach to marketing and selling products on two-way platforms.

The most important factor is customer acceptance and utilization of the software. In other words, does the digital investment solve problems, improve the lives and businesses of customers and generate value?

IT Work Isn’t Just for IT People
Whether the software is acquired or developed internally, you need to ensure customers and business leaders are involved early in the process. Writing software that drives sales and revenues is not simply an IT project. It’s a business project involving many stakeholders acting together to design, create, test and launch digital tools in a timely and cost-effective manner ensuring they accomplish what they were designed to do.

After leading the digital transformation at Masonite, it became abundantly clear that digital technology has and will continue to disrupt the building materials industry at an ever-increasing rate. The fact that many JIAN clients continue to make digital inquiries, given the firm’s digital expertise, is further evidence strategic technology changes are occurring fast.

The industry must embrace digital and invest wisely and quickly to author the disruption, rather than be subject to it and the pain it would most likely cause.