Definitions[]
Disintermediation is "the removal of an intermediary in a process."[1]
Disintermediation is
| “ | the elimination of tasks or people in a supply chain or work flow because the tasks are now done by someone positioned earlier in the work flow.[2] | ” |
Overview[]
Disintermediation is driven by the fact that middle players consume resources and in removing them from the distribution chain, these resources are recovered to enable either lower cost for the consumer, better value from the provider, or both. Disintermediation can be total, in which case a middle player is removed entirely. It can also be partial with some but not all of the middle player's functions being assumed by others or done away with entirely.
Many commentators have opined that the growth of electronic commerce will see the disappearance of middlemen as vendors set up websites and sell their products and services directly to the consumer. Others, such as Paul Saffo at the Institute for the Future, believe that it is not necessarily in a company’s best interest to get too close to the customer, and that it is often useful and important to place one or more layers of “cultural brokers” between the vendor and the customer. “The essence is that computers make it easier than ever to be an intermediary. That’s why we will have more intermediaries, not less,” said Saffo. One type of intermediary is a “vortex business.”