Disruption (business): “a radical change in an industry, business strategy, etc., especially involving the introduction of a new product or service that creates a new market.”
For as long as there has been business, there has been business disruption, whether through the advent of new technology, new innovation, or simply new market entrants.
Throughout history a number of major disruptive technologies have revolutionised each and every industry across the globe, from the introduction of the mechanical loom in the early 1800s redefining the textiles industry to Henry Ford’s assembly line of the early 1900s, which to this day remains the cornerstone of manufacturing globally.
More recently, with the rise and prevalence of digital disruptors like the Internet, mobility, and cloud computing, business attrition is at an all-time high, with the average business longevity of an S&P500 Company down by 80%, from 60 years to just 12 years.
Stop dabbling and disrupt with digital
So disruption is nothing new. What is new is the speed, breadth, and ease of disruption.
Traditionally, technological change has been far outpaced by an industry’s ability to adapt, thereby allowing businesses ample time to assess, evaluate, adopt, or even disregard new technologies with little or no consequence. This is certainly no longer the case. What once may have taken decades in the past now seems to happen overnight, and those who ignore or are unwilling to adapt are failing.
“Digital complacency” has resulted in over 52% of the Fortune 500 having merged, been acquired, gone bankrupt, or fallen off the list since 2000.
Consider Borders, Blockbuster, and Kodak. Thirty years ago, Kodak employed 150,000 people. This industrial giant owned film photography in the 20th century; it had a virtual lock on its industry. Today, it’s a small fraction of its former self, having crawled out of bankruptcy with just 4% of its previous workforce.
This situation is not isolated to large enterprises. No company, small or large, will be unaffected by the forces of digital disruption.
Despite the fact that 90% of CEOs agree that the digital economy will impact their industry, according to a recent study by MIT Sloan and Capgemini, only 15% are executing a digital strategy. As these businesses ignore this reality, early adopters of digital transformation are achieving these benefits:
- 9% higher revenue creation
- 26% greater impact on profitability
- 12% higher market valuations
Rewrite the technological change curve
Digital transformation isn’t solely about digitising your business processes so you can save money and increase the bottom line. It’s about transforming your organisation into a digital enterprise that can respond immediately to the technological change curve, and ultimately becoming a disrupter and defining the curve for your industry.
- On-demand transportation is here and has already had an unprecedented impact. The automobile of the future will drive itself and receive software updates from the cloud, and the impact on logistics and overall supply chain execution and planning will be phenomenal.
- 3D printing will again revolutionise the manufacturing industry. With the capability to manufacture almost anything, anywhere, anytime, and on demand, low-cost offshore manufacturers and associated high shipping costs will be a thing of the past.
- Every song ever recorded is, or will be, available globally via the Internet. The music industry never imagined what Apple Music, Spotify, and Pandora would do for music distribution and consumption.
No matter where your company is on the digital transformation adoption journey, continually reimagining your business processes, workplace, and customer engagement models is vital in becoming a digital enterprise. It is the evolution from analog to digital that creates a more competitive, agile, and innovative company.
Download the latest research from CIO Magazine and SAP to learn the digital transformation readiness of ANZ businesses are and the approaches from various business leaders.