How to turn digital disruption into a positive force for your business
Digital disruption is inevitable, imminent and impacting every industry. Whether your business is already experiencing disruption or anticipating major changes, preparation and a willingness to adapt is key. Those who ride the digital wave, rather than resisting it, can use this disruption to grow their business and become a digital leader.
How will digital disruption change my business?
Digital disruption is multifaceted and has the potential to impact every aspect of a business. In order to adapt, some businesses will need to completely rethink their business models and their interaction with customers. Technologies such as cloud-based services, electronic payments, and smartphones, for example, have led to the removal of middle parties. This allows businesses to engage directly with consumers, but it also means lower barriers to entry for new players and increased competition.
The Internet of Things (IoT), in particular, could impact everything from business value creation to the monetisation of customer value. Businesses selling physical products can now attach a subscription product to their IoT-enabled physical products and widen their product function. This will prove to be disruptive to traditional physical product manufacturers.
New digital tools change how businesses operate, allowing rapid scaling-up and the ability to fulfil higher volumes of business. This has forced some businesses to shift their core value proposition to customers. For example, some TV stations now offer convenient streaming on-demand via an internet connection, instead of fixed programming.
Digital innovation provides opportunities for harnessing teams across borders, with telecommuting and mobile work arrangements becoming increasingly common. Real-time data is another opportunity for businesses to react quickly to changing market conditions.
Industries vulnerable to disruption
Almost all sectors will face disruption from the digital revolution eventually. But some will be more exposed, or exposed sooner than others. Media, telecom, and consumer financial services are predicted to be the most vulnerable industries when it comes to digital disruption. Retail, technology, and insurance will also see a lot of digital change in the near future.
B2C industries are more likely to suffer disruption sooner than B2B. Industries with low barriers to entry and businesses with legacy business models, such a law and finance, should begin preparing for big changes and challenges presented by the digital era.
The least impacted industries are those with high barriers to entry, and these are often industries where discrete parts of their operations can be digitised, without the need to alter the entire business model.
Managing digital disruption
‘Riding the digital wave’ will require being forward thinking and proactive. Getting your staff involved and driven to succeed is another key component to reaping the benefits of digital disruption.
Question your business model
Look at your business model objectively and identify threats and opportunities. Seek advice if you’re unsure about how new technologies will affect your business. If your current business model is unsustainable in the digital age, it’s vital that you act decisively to adapt and ensure business viability. Digital disruption offers uncertainties, so testing different scenarios and reviewing the results will allow your management team to develop viable, evidence-based responsive strategies.
While digital disruption will create many challenges, don’t lose sight of the potential opportunities. Chances to acquire new customers, develop cost saving innovations, and improve operations management are all possible with new technology. Using data to grow your customer base is one example, and options like mobile workforces and flexible work arrangements can lead to dramatic reductions in overheads.
Have a digital strategy in place
A digital strategy outlines what you’re going to do to manage the impact of the digital wave. Your digital strategy should reflect the different scenarios you’ve explored in preparation for digital disruption. However, it should be proactive rather than reactive. If you view disruption as an opportunity, you can better take advantage of gaps in the marketplace and beat your competition to the punch.
Change might be incremental, or sudden. You could end up investing in new capabilities and abandoning legacy models. Some businesses might decide to focus on new product lines. Operational changes will likely be a part of your digital strategy as you adopt new tools and structures to keep up with competitors and the changing demands of consumers.
Companies like Adobe have become digital leaders by focusing on customer experience. In response to digital change, the company developed a new strategy focussed on providing an outstanding customer experience. This involved improving on existing customer service initiatives, as well as providing new, experience-focused products, such as the Adobe Experience Cloud.
Domino’s Pizza is another example of a company which has embraced digital disruption by focusing on experience. The popular pizza chain established a seamless mobile and web-friendly ordering system that allows customers to track their order status, right up to the point of delivery.
Risk and trust
Risk and trust are significant for consumers and employees in the digital age. Design your digital offerings with the aim of managing risk and enhancing security and privacy. Respect employee and customer data, and encourage high ethical standards for dealing with data. It might be a good idea to guide your team with an clear data policy.
Proactively address the skills gap
It’s common for organisations preparing for digital disruption to be constrained by a skills gap, and you’ll find it difficult to adapt quickly if you don’t have the right talent. Start planning early to identify new digital roles for your changing business model. Work with HR to create new roles and source skilled team members. It’s beneficial (and cost effective) to invest in retaining and retraining your existing workforce and helping them transition into new roles.
Assign transformation roles
It’s not enough to pay lip service to “embracing change”. Organisations should assign transformation responsibilities to specific staff members to increase accountability and ensure changes are implemented quickly and effectively. Enterprises might need a chief digital officer to manage the change, while smaller organisations could benefit from identifying key staff members who are leaders capable of driving transformation in their department.
Encourage a digital culture
A digital culture is one that respects data-based decision-making. Having new hardware and software tools in place isn’t enough for businesses that want to stay competitive. A data-driven culture empowers staff at all levels to make smarter, data-driven decisions. It can enhance everything from marketing and customer service, to long term strategy planning and key decision making.
Embrace the digital age
In a world of rapid digital development, if your business isn’t actively moving forward, it’s going backwards. You might not need to reinvent your business to the core, but everyone will need to adapt to digital disruption at some point. Assess your business model and have a digital plan that reflects your needs, and the needs of your consumers. As long as you’re willing to adapt and tackle change head-on, your business can turn the threat of digital disruption into an exciting opportunity.
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