Digital Disruption and the Future of Business
Digital disruption is the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services.
It’s easy to think that something new, like an iPad, doesn’t really disrupt anything in particular, but this is not true.
Anytime you replace one product with another that offers greater value to your customers, that’s a digital disruption in action, whether or not you consider it disruptive to your business model at the time.
What Is a Disruptive Innovation?
Digital disruption happens when new technologies are introduced to a marketplace.
Each innovation creates change, which means it’s important for business leaders to be aware of emerging trends in order to proactively respond.
The term disruptive innovation was coined by Clayton Christensen, author of The Innovator’s Dilemma, back in 1995.
Over two decades later, digital disruption continues to reshape business as we know it today.
With so much focus on big data, cloud computing, and artificial intelligence (AI), it can be easy to overlook other innovations that will disrupt your industry.
In fact, there are five specific types of digital disruptions you should keep an eye on over the next few years:
1. Data engineering:
Data is at the heart of any successful business, but extracting insights from data is not always easy or cost-effective.
That’s why companies like Databricks and Apache Spark have emerged to help enterprises harness insights from their ever-growing mountains of data—and use them to create better products and services.
These tools provide real-time analytics capabilities that allow businesses to make faster decisions based on accurate information about customer behavior and market conditions.
The result?
Organizations can react more quickly to changing consumer preferences and industry trends.
2. AI/machine learning:
Machine learning has been around since at least 1956 when computer scientist Arthur Samuel first described it as the ability to learn without being explicitly programmed.
Today, AI is used in everything from voice recognition software to self-driving cars and even email spam filters.
As AI becomes increasingly sophisticated, machine learning is poised to disrupt just about every industry imaginably.
For example, retailers could use machine learning algorithms to predict what consumers want before they even realize they want it.
3. Blockchain:
Many people mistakenly believe blockchain is synonymous with Bitcoin, but blockchain technology actually has applications across multiple industries beyond cryptocurrency trading platforms.
Blockchain enables secure transactions between two parties without relying on a third party such as a bank or payment processor.
This distributed ledger technology is still in its infancy, but its potential impact on global commerce makes it worth watching closely.
4. Augmented reality:
Virtual reality (VR) has garnered most of the attention recently, but augmented reality (AR) may prove to be just as transformative.
AR overlays digital images onto real-world environments through headsets and mobile devices, allowing users to see simulated objects as if they were really there.
While VR immerses users in a completely digital environment, AR allows them to interact with both virtual and physical objects.
5. Autonomous vehicles:
Self-driving cars are already on our roads and highways, but autonomous vehicles (AVs) have yet to hit mainstream adoption.
Experts predict AVs will be a $42 billion industry by 2025, and some experts say driverless vehicles could save as many as 33,000 lives per year due to fewer accidents caused by human error.
Technology is evolving rapidly, and it’s likely that in a decade or two, driving will be a thing of the past.
The good news is that these digital disruptions can be harnessed to drive business growth.
The key is to understand how they work and what they mean for your industry. If you want to stay ahead of digital disruption, here are four steps CIOs can take right now:
1. Conduct a digital audit: If you don’t know what technologies are on your horizon, how can you prepare for them? A digital audit will help you identify emerging trends and predict which ones will have a significant impact on your business.
2. Assess your infrastructure: Digital disruption is only as effective as its weakest link. If your current IT infrastructure isn’t up to par, it could hinder your organization’s ability to take advantage of new technologies that could improve efficiency and customer service.
3. Invest in digital transformation: Digital disruption is here to stay, and it's time to embrace it. Investing in digital transformation initiatives will help you transform your business into a digital enterprise that can take advantage of new technologies as they emerge.
4. Partner with a trusted advisor: If you're trying to navigate a complex landscape of emerging technologies, it helps to have someone who knows what they're doing by your side.
The Power of Ideas
What Really Counts As Digital Disruption?: Digital disruption is one that occurs when new digital technologies and business models affect the value proposition of existing goods or services.
In a sense, digitization disrupts conventional economic notions such as supply and demand, product substitution, purchasing power parity, profit maximization, and producer versus consumer surplus.
This paper discusses how enterprises can harness their digital disruption capabilities for gaining a competitive advantage by tapping into market opportunities in industries ranging from financial services to health care.
To cope with digital disruption, companies need to focus on leveraging IT investments, developing new strategies, and reshaping organizational structures.
What's more, they should pay close attention to big data analytics tools as well as workflow management platforms (BPM) so they can optimize internal processes and effectively address external customer needs.
How to Think Like an Innovator
It can be hard to know how to move your company forward in a rapidly changing marketplace.
Perhaps you’re missing an innovative idea, or maybe you have a great one but aren’t sure where to start.
These five steps can help you think like an innovator and put your ideas into action.
Remember: You don’t need to come up with something completely new—just something that makes people's lives easier or more enjoyable than they were before.
Your first step is always to look at what other companies are doing and then figure out how you can do it better.
If other companies are offering customers video-streaming services, for example, consider whether there’s another way to provide that service.
Next, do some research on what consumers want; if you haven't done so already, consider hiring a market research firm or using social media to gather feedback from potential customers.
Once you've figured out what needs to change, develop a plan.
- How will you reach these customers?
- What resources will you need?
- How much will it cost?
- And finally, take action!
Don't spend too much time thinking about what could go wrong—the most important thing is to get started.
To learn more about innovation, check out our guide below. Title: How to Think Like an Innovator
The 5 Types of Innovators You Need in Your Organization
All organizations that survive in today’s age are innovators.
They have to keep pace with digital disruption as well as disruptive technologies. There are five types of innovators you need on your team to harness change while staying ahead of it:
- The Digital Explorer,
- The Process Inventor,
- The Change Agent,
- The Systems Architect,
- The Implementation Expert.
While they all play a crucial role in bringing about change, they also bring different skill sets to bear. Here’s what each one does best.
The Role of a Chief Information Officer (CIO) in Harnessing Digital Transformation:
- CIOs can take many steps to harness digital transformation.
- One is working closely with leaders across their organization to better understand how their organization can become more agile
- and responsive amid rapid changes—and taking those learnings back into their IT strategy.
- Another is embracing new ways of delivering value for customers by deploying business process management (BPM) tools throughout their organization.
Are You Ready for Change?
Digital disruption is at an all-time high, and it’s shaping big data infrastructure.
This forces CIOs to ask themselves, are we ready for the change?
The answer is yes, but we must embrace digital disruption from several angles—or risk facing dire consequences.
A proper digital transformation will have an immediate impact on how enterprises handle business processes across departments.
CIOs can prepare for such changes by turning to BPM tools, which help mitigate digital disruption amid a company’s digital transformation efforts.
An analysis of recent studies shows that roughly two-thirds of companies that fail to keep up with changing technology end up out of business within five years.
So what should CIOs do in order to avoid being disrupted?
It comes down to planning ahead and taking action when necessary.
One way they can do so is by prioritizing collaboration between teams while adopting agile development practices; after all, digital disruption happens as a result of teams working together—not independently.
