What does Digital DISRUPTION mean for your business? If it is the fate of every business, what can we do to prepare for it? Let’s dive in and find out!
Drive for digital has already happened!
According to an Accenture forecast, in just 5 years, Australia’s digital economy will experience growth of 26.1% between 2015 and 2020.
Companies around the world are spending $174 billion on cloud technologies alone. Many organizations now have chief digital officers or have developed separate units that are responsible for driving digital strategy.
While the statistics look promising, many companies are still struggling with their organizational structures to facilitate the shift to digital transformation and meet the challenges of digital disruption head-on.
Innovation is transforming every business!
The phenomenon of digital disruption is not new! However, the opportunities and risks it presents change over time and those who take the first step are remembered by history as innovators!
Ever wonder how iPods replaced CDs, how Amazon beat out Barns and Nobles, why Marriot didn’t think of AirBnb, why taxi drivers couldn’t come up with a brilliant idea like Uber, and how Netflix became the number one choice? from Blockbuster? customer time!
Businesses that are bold enough to innovate serve as the poison pill for those who still follow the rules of the last century!
The speed of change is still critical!
When I say that only the agile survive, it means that companies don’t need to innovate and change their business models, they need to do it at the speed of digital disruption, in order to survive!
From the rise of digital, to the dawn of the internet age, social media, and now mobile technology, every couple of years, digital seems to be disrupting every aspect of our lives, and that too at an unprecedented rate.
Instead of embracing and expanding the digital new wave, Kodak, Polaroid, and many others devoted their time and energy to defending the status quo. By the time they realized that digital photography was here to stay, it was already too late!
Rethink value creation
One thing that is common among all of these innovators—Netflix, Uber, AirBnB, and many others—is their ability to pinpoint a gap in existing products and services and fill it by rethinking a solution that creates greater value for users. Most importantly, the core of your investment is focused on the customer and supplier value proposition, not the products or services they offer!
Do you really think Marriott knows what the hotel industry is all about? Without having to own property, hire and train cleaning staff, or be on call 24/7, AirBnB was able to run a simpler and more efficient business model that was profitable for all parties involved! (ie customers and vendors)!
AirBnB’s impact on the hospitality industry is another example! “Digital disruptors know how to rethink value creation and create new market space that didn’t exist before!
Businesses can deliver value to customers using the five steps of the interaction curve: Buy, Use, Transfer, Co-create, and Integrate products and services! Businesses that can offer greater value in terms of novelty or efficiency at any of these customer touch points.
Understand the magnitude of change
The magnitude of the disruption can often wipe out major companies and sometimes entire industries.
Understanding the magnitude and scale at which a new business model will affect you remains critical. Consider how YouTube “How To” videos are impacting formal education and how online booking for travel has all but eliminated the traditional role of travel agencies.
Personalization of products, services and interactions
Today, consumers are actively reaching out to companies with whom they can interact on a personal level. Digital marketing analytics has made it possible for companies to reach their customers with a personalized, relevant, and targeted message that they are more likely to welcome than cold calling or mass marketing methods. It is the customers who dictate the business, not the other way around.
In the age of the Internet of Things, wearable technology, and social media, suitability, affordability, and timeliness play a vital role in delivering personalized service to the target market.
timing is everything
Companies that can anticipate disruption before it happens become leaders! These companies see themselves as being in a powerful position to launch themselves as pioneers in a field and maintain that image by continuing to innovate.
On the other hand, if the alternative solution does more or less the same job or better, faster and at a cheaper cost, it will only be a matter of time before this new business model improves to the point where your solution becomes irrelevant.
When Reed Hastings, the founder of Netflix, offered Blockbuster CEO John Antioco to promote Netflix in his stores in exchange for Netflix managing the Blockbusters brand online, he was laughed at. 10 years later, Blockbuster went bankrupt and Netflix became a multi-billion dollar company.
Those who survive the wave of disruption make a move before it is too late to make any move.
Investment in digital infrastructure
Digital disruptors understand that technology alone cannot make a difference. True disruption occurs with the right integration of technology, people, and processes with a change in the overall organizational structure and business model.
Whether it’s hiring new talent, reinforcing a new vision, or reallocating budget to new digital technologies and better customer interactions, companies need to find a way to survive the wave of disruption that is rapidly sweeping through the industry they serve.
Opportunities to survive digital disruption
Despite the flashy examples of digital disruptors beating out seasoned market players, according to the Global Center for Digital Business Transformation, 45% of business leaders believe digital disruption is not a major concern! scope!
For those who realize the threat it poses, they are in a better position to act in time. So what are the opportunities for those willing to survive the digital disruption?
1. interrupt disruptor – Challenge the competition before it starts (Jet.com has become a threat to Amazon, the biggest disruptor of the 21st century)
2. Secure your location – “If you can’t be as good as them, buy them! (Facebook acquired WhatsApp) acquire
3. Absorb digital skills – Integrate online and offline customer interactions (AudiCity: Audi showrooms where you can design custom virtual car models on a digital screen)
4. follow the steps – Learn the tricks of disruptors and instill a digital-first mindset within your organization.
The next wave of disruptive technologies
Digital disruptors are always ready for the next wave of disruptive technologies that could disrupt their industry or affect their value chain. What companies need to do is prepare for a response to potential threats and maximize organizational capabilities to achieve digital business innovation.
Even if you are a market leader today, to remain so, companies must become their own disruptors!
Get out of your comfort zone and challenge your own silos and business processes, before someone else does!
Conclusion
Digital disruption is already happening and no one can escape it.
Applying high-end digital technologies to your business without understanding their potential impact can be deadly. The business need is
- Do you understand which companies are most likely to steal your piece of the pie and how?
- How can you disrupt your own business model to prevent your competitors from narrowing the circle in the first place?
- Can you use digital technologies to improve the customer experience throughout the value chain?
- Do you have the right set of skills to compete in the age of rapidly evolving connectivity, collaboration, and customer needs?
Digital disruption can be unpredictable and overwhelming, but those who are willing to take risks are immensely rewarded!