Digital disruption and how to stop it

Digital disruption is a term with different definitions depending on the industry context that a business operates in. For example, Gartner has defined digital disruption as an “effect that changes the fundamental expectations and behaviours in a culture, market, industry or process that is caused by, or expressed through, digital capabilities, channels or assets.” TechTarget, on the other hand, calls it a “change that occurs when new digital technologies and business models affect the value proposition of existing goods and services. “Fundamentally, the essence of digital disruption is change due to the evolution of technology – change in how consumers interact with brands; change in how businesses operate; and change in how people communicate with each other.

Digital disruption is different from disruptive technology. The term “disruptive technology” was first coined and defined in 1997 by a Harvard Business School professor, Clayton M. Christensen, in his book “The Innovator’s Dilemma”. For example, the smartphone is a disruptive technology that has displaced the use of traditional mobile phones, PDAs, small cameras, calculators, MP3 players, GPS devices and more. Social networking is another disruptive technology having revolutionised the way we communicate.   Adoption of these disruptive technologies by the masses caused a behavioural shift in society, specific to their preferences in interacting with businesses and brands. This, in turn, caused a digital disruption in the existing business models within several industries, such as retail, travel, and telecom and changed the way these businesses operated and interacted with their customers. Disruptive technology is technological innovation that replaces established technologies to create an environment that becomes a conduit for digital disruption.

Digital disruption is the new normal  – a current and future state of business as more and more disruptive technology is adopted by mainstream audiences. In a 2021 article by Daniel Burrus, one of the World’s Leading Futurists on Global Trends and Disruptive Innovation, he acknowledges that “digital disruptions are what I refer to as a Hard Trend, or a future certainty that will happen, and try as you might, a digital disruption of any kind will inevitably find its way into your industry, organization, or specific department.” In a recent article released by PR Newswire, it was reported that digital disruption has been accelerated due to the COVID-19 pandemic; this has resulted in the next wave of digital disruption known as convergence. According to the article, there are four levels of convergence:

– Process Convergence: Formerly discrete processes and workflows are now being connected across business for greater efficiency and integrated goals.

– Technology Convergence: Technologies such as Cloud, IoT, AI, Supply Chain Management, Augmented and Virtual Reality are converging to create new use cases and solutions.

– Data/information Convergence: Formerly siloed data/information is now more accessible and being used across business and industry to power a range of new products and services.

– Industry Convergence: Formerly discrete industries are becoming more similar and connected, creating new opportunities for value creation.

Two key questions that CIOs should be asking are:

– How will digital disruption change the way my organisation does business?

– How can we maximise the opportunities created by this change?

In a 2020 article from The Forecast By Nutanix, author Michael Brenner identifies several strategies that organizations can adopt to survive the challenges of digital disruption. Here’s a simplified interpretation of some of the suggested strategies:

1) Don’t change for the sake of changing. Focus on changes that will yield a competitive advantage, such as optimizing business processes and increasing the value of products and services.

2) Put emphasis on making customer-centric changes; address their pain points and improve their customer experience.

3) Try not to overcomplicate solutions with new technology; in other words, leverage disruptive technology for simple solutions!

4) Build a cross functional team that understands what disruptive technologies will fit with the companies objectives.

In a Gartner report titled “Leading Through Digital Disruption”, David Mitchell Smith, Vice President and Gartner Fellow, states that innovators that want to impact change, don’t just innovate, but disrupt. These innovators usually find themselves in a situation and change the fundamental dynamics of their environment to use it to their advantage. He further adds that “When the average organisation is no longer surprised by disruption, but instead uses it as a tool of normal competition, it changes organisational dynamics, the nature of strategic planning, investment priorities and the technologies used to drive the future of business.”

Disruptive technology leading to digital disruption within the business environment is now the norm and should be expected by most businesses. One of the biggest steps that most businesses are taking to meet this challenge is analysing their current state of digital transformation. It is important to understand where your business stands in today’s digital landscape before taking steps to transform your business model to meet your customer’s expectations and needs.

Check out this webinar to learn more about the solutions that will help expedite your organisation’s digital transformation journey.