Digital Disruption: Harnessing a Powerful Force · 2016-11-10 · Digital Disruption – On an...

TheDynaSisEducationSeriesforC-LevelExecutives

DigitalDisruption:HarnessingaPowerfulForce

Whilethetermitselfmaysounddaunting,DigitalDisruptionisthestrengthmodernbusinessesmustusetotakeadvantageoftoday’stechnology,withoutwhich,theywilllikelybeleftbehind.Bynow,mostseniorbusinessexecutiveshaveheardtheterm“DigitalDisruption”,butwesuspectmostarenotfullyfamiliarwithallitsimplications.Asyouwillsee,digitaldisruptioncanbeyourbestfriend,drivingyourbusinesstonewheightsandundreamedofprofitability,oratotalnightmare.Wearealsogoingtolookattwolevelsofdigitaldisruption.Thefirst,thosethathaveaglobalimpactonbusiness,evenlifeasweknowit,suchasthepersonalcomputerandthesecond,onanindustry-by-industrybasis,suchastheeffectofUberontaxicabs,Amazononretail,orAirBNBonhotels.Butfirst,let’sdefine“digitaldisruption.”Adisruptionissomethingthatimpedesyourprogress,keepingyoufromreachingabusinessorpersonalgoal.Ifyourflightiscanceledbecauseofanairline’scomputerglitchwhileonthewaytoabusinessmeeting,thatisadisruption.Theinternetgoingdownwhileyouareresearchingdataforabusinesspresentation,thatisadisruption.Butneitherofthese,inspiteofthefactthattheyaretechnologyrelated,aredigitaldisruptions.Thesearesingular,isolatedeventsthat,whileannoyingandpossiblycostly,donothavealong-lastlyeffectonyourbusiness…oranyoneelse’sforthatmatter.Atruedigitaldisruptionisatechnologicallybasedchangeinthewayanindustry,ortheworld,doesbusiness.Thetruewinnermaybethecompany(orindividual)whodevelopsthistechnology,oritmaybeotherplayerswholatchontotheseadvances,andsharethebenefit.Itmayalsobetheoneswhoseetheopportunityandimproveupontheconcept.Facebookwasnotthefirstsocialnetworkofitstype,butithasbeatenalltheothers.LinkedIntooktheconceptandadapteditforbusinessandprofessionalpeople.Butpleasedonotthinkthatinordertobenefitfromdigitaldisruption,youneedtodevelopanapplicationasintricateandfar-reachingas___________________________________________________________________________________________

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TheDynaSisEducationSeriesforC-LevelExecutives___________________________________________________________________________________Facebook.Thispaperisintendedtoshowyou,theCEO,CIO,President,Owner,etc.,ofasmalltomid-sizedbusiness,howyourcompanycanadaptandbenefit.DigitalDisruptiononaGlobalScaleWhileyouasanexecutiveofasmalltomidsizedbusinesswilllikelyneverbeinvolvedinthedevelopmentofdisruptorsofthismagnitude(neitherwillwe),foryourbusinesstoreachitsfullpotential,itisimportantthatyouareunderstandthesetechnologiesandproperlyemploythosethatcanimproveyourbusiness.Thesedigitaldisruptionscanleadtoyourcompany’sdigitaltransformation.

PersonalComputers–Nothinghastransformedourdailylives,personalandprofessional,asdramaticallyandrapidlyasthePC.Butcompaniesneedtomakesurethathardwareandsoftwareareup-to-dateandnotcompromisingsecurityorproductivity.Agingcomputersandout-of-dateapplicationscanputyouatacompetitivedisadvantage,nottomentionwastingemployeetimeandotherresources.CloudComputing–asacompanythatspecializesincloudcomputing,thisisoneofourfavorites,but,no,wedidnotinventcloudcomputing.Asimpledefinitionofcloudcomputingwouldstatethatdataisstoredoff-premises(meaningnotinyouroffice),andisalwaysavailable.Earlyadaptionswouldincludeemailandmessaging,andneweroneswouldincludefilesharing,datastorage,websites,dataprocessingandmore.MobileComputing–Smartphones,laptopsandtabletshavemadeitpossibleformanyofustoaccomplishourtasksanywhere,anytime.Ithaschangedthewaypeoplework.Businessprocessesareturningintomobileapps.Peopleworkingfromhomecanspendthetimetheyusedtospendintrafficjamsgettingtoworkactuallydoingthework…orwiththeirfamilies.Yoursalespeoplecanmeetprospectsface-to-faceandinstantlydownloadfacts,figuresandevenfullreportsandpresentations.ArtificialIntelligence&Automation–Computersarebecomingsmarterandinsomeindustries,suchasconsulting,thereareexpectedtobemachinelearningpackagesthatwillinstantlyprovideanalysesthatwouldbehardtoproducetoday.Thisisanareainitsinfancytoday,soonlytimewilltellitslong-termimpact.Data–Theamountofdatabeingcreatedandstoredtodayisalmostunfathomable.Thosewhoharnessit,manipulateit,anduseitforbothshortandlong-termplanningwillhaveatremendouscompetitiveedge,regardlessoftheirindustry.TheInternetofThings(IoT)–Today’sInternetprovidescommunicationessentiallybetweenpeople,organizations,andgovernment.TheIoTprovidescommunicationsbetween“things.”ItistheremotecontrollingandmonitoringofthingssuchasHVACsystems,lightbulbs,accessdoorsetc.;itisalsothecollectingofinformationabouttheusage,lifespans,andavailabilityofthesethings,andthisdatawillbeusedtodevelopbetterproducts.

Properuseofthesetechnologiesincreasesyourtechnicalcapabilitywhichleadtothreecorecompetencies:___________________________________________________________________________________________

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TheDynaSisEducationSeriesforC-LevelExecutives_____________________________________________________________________________________

Availability–yourITnetworkalwaysbeingupandavailable;Security–knowingyourdataandapplicationsaresafeandsecure,aswellasalwaysbackedup;Mobility–youremployeesbeingabletoaccesstheapplicationsanddatatheyneed,anytime,anywhereonanydevice.Theexpectedoutcomesofachievingthesecorecompetenciesare:IncreasedProductivity,ReducedCosts,MinimizedRisks,andMaximizedGrowth,allleadingtoIncreasedProfitability.DigitalDisruption–OnanIndustryLevelAswesaid,theaboveexampleshavecaused,orareexpectedtocause,monumentalshiftsinthewaywedobusinessand/orinteractwitheachother.Nowlet’stakealookatdigitaldisruptionfromtheperspectiveofhowitcanaffectspecificindustries,basedonanumberofdifferentdisruptionbusinessmodels.Asyoureadthroughthis,thinkabouthowyoumightadaptoneofthesemodels,ormorethanone,toyourspecificbusinessgoals.Keepinmindthatwhiletheexampleswegivearegenerallyoflarger,well-knowncompanies,therearemany,manyexamplesofcompaniesjoiningthemovementeveryday.Alsonotethatsomeofthecompaniescitedasexamplesareusingmultiplestrategies:

Subscription:Insteadofpurchasingaproductinthetraditionalmanner,thesubscriptions,thesellerlocks-inthebuyertorepeathis/herpurchasesagainandagain.Examples:AppleMusic,Netflix,DollarShaveClubFreemium:Ratherthanpayingforthisservicewithmoney,youpaybyprovidingyourinfo,oryourattention,withtheproviderhopingyouwilloptforanupgradedservice.Examples:LinkedIn,Dropbox,SpotifyFree:Inexchangeforreceivingthisserviceforfree,theprovidermaysellyourpersonaldataandcanalsogeneraterevenuebyallowingadvertiserstobuyspaceandofferyoutheirproducts.Examples:Google,FacebookMarketplace:Increatinga“marketplace”,theserviceconnectsbuyersandsellersandthencollectsafeeforeveryitemchanginghands.Examples:eBay,iTunes,AppStore,Uber,AirBNBHyperMarketplace:Thisistheuseoftremendousmarketpowertojustcrushthecompetition.Tacticsmayincludesellingatalosstogainmarketshare.Examples:Amazon,AppleAccessvsOwnership:Allowsitsmembertousegoodsand/orservicesthattheywouldformerlyhavehadtohavepurchasedtouse.Thisprovidescustomersaccesstohomes,cars,capital,vacations,etc.,whileprovidingincometotheowners.Examples:Zipcar,Peerbuy,AirBNBQualityofExperience:Sellersprovidetothosewillingtopayahigherpriceforasuperior“userexperience”thanlowerpricedcompetitors.Examples:Apple,TeslaReseller:Usesalargenumberofaffiliatesorresellerswhoaregenerallyrewardedonacommissiononlybasis.Manytimes,alltheaffiliatesdoisputalinkontheirwebsites.Examples:Amazon,Microsoft,Dropbox

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TheDynaSisEducationSeriesforC-LevelExecutives________________________________________________________________________________

On-Demand:Thesellingofsomeone’stimeinexchangeformoney.Asshownintheexamplesthatfollow,thiscanbefortransportation,householdchores,personalshopping,andmuchmore.Examples:Uber,Operator,Taskrabbit“Ecosystem”:Likeanaturalhabitat,thesecompaniescreateintegratedproductsthatmakeitdifficult,whetherinactualityoremotionally,toswitchtoanotherproviderforanotherservicethatyouroriginalprovideralsooffers.Theperceivedvalueofeachproductincreasesaseachproductinthefamilyisadded.IfyouuseaMacBookPro,youaremorelikelytouseaniPhonethananAndroidandaniPadthananAmazonFire…andviceversa.Examples:Apple,Google,Microsoft

Let’slookatoneoftoday’smostwell-knowndisruptorsandseehowotherentitiesarecombatingit.Uber.Talkaboutdisruption!Thiscompany,foundedjustsevenyearsago(2009),isnowoperatingin507citiesin66countries.InNewYorkCity,taximedallions(“medallions”areeffectivelylicensestodriveataxi,andarerestrictedinnumberbytheNYCTaxi&Limousinecommission)weresellingontheopenmarketfor$1,000,000priortoUberenteringthemarket.Today,thishasbeenreducedby50%.NewYorkisusedasanexample,butthisdisruptionhastakenplacewhereverUberhasenteredthemarket.Sowhatarepeopledoingaboutit?

• CompetitionhaseruptedfromsimilarcompaniessuchasLyft(220U.S.cities),Curb(60U.S.Cities),

andDidiChuxing(600citiesinfar-eastandbackedbyApple).• InIndia,taxidriversbandedtogetherandhadtheirownride-shareappcreated.• RideConnectisadownloadableappthatallowsyoutobuildyourownridesharenetworkamong

students,co-workers,friends,acquaintances,neighbors,etc.,andalltheirco-workers,friends,etc.Youpostwhenyouareavailableandhowmuchyouwillcharge,orwhenyouneedarideandhowmuchyouarewillingtopay.

• JunoRideSharingisastartupdesignedtocompetewithUberandtheothersbyofferingdriversbetterpay,theopportunitytoearnstockinthecompany,employeebenefits,etc.Toapply,adrivermustbetop-ratedwithUber.

• Andfinally,taxidriversinNYCarelaunchingtheirownappthatletsusershailcabsandpayforridesusingasmartphone.Allfaresaremeterbasedwithno“surge”pricing.TheappiscalledArroandifitworks,willlikelybeusedinothercitiesacrosstheU.S.andaroundtheworld.

Toooften,when“digitaldisruption”isdiscussed,thefocuscentersonhowtechnologystart-upsthreatenestablishedbusinesses,ratherthanfocusingontheopportunitiesthismassivechangeintechnologypresents.SomeC-Levelexecutivesofsmalltomidsizedbusinessesbelievethatasasmallercompany,theyareimmunetotheseeffects.Interestingly,othersinthesamepositionbelievetheyaremoreatrisk.Webelievebotharetrue:youareimmuneuntilanewplayerwithanewwayofdoingbusinessinyourmarketcomesalong…thenyouareatrisk.Andourbeliefisthatsoonerorlater,thatnewplayerwillcomealong,oranoldplayerwillcomeupwiththatproverbialbettermousetrap.Rememberthis:smallchangescanhavemajorimpacts.Youdon’thavetobethenextUberorAmazon.Butyoudohavetoalwaysbelookingtotakeittothenextlevelbecauseifyoudon’t,someoneelsewill.Sohereisreality:youarenotgoingtoreadthispaper,thensitdowntomorrowmorningandmapoutawholenewwaytorunyourbusiness.Hopefully,youwillsitdowntomorrowmorningandsay,“Ineedtolookathowtechnologycanmakesuremybusinessremainscompetitiveintheyearsahead?”Werepeat:“Today,everybusinessisatechnologybusiness.”___________________________________________________________________________________________

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TheDynaSisEducationSeriesforC-LevelExecutives__________________________________________________________________________________

Herearestartingpoints:

• Analyzeyourcurrenttechnicalcapabilities.• Analyzeyourcurrentweaknessesintermsofproduction,productquality,customerservice,etc.• Thoroughlyinvestigateyourindustry,bothinyourcityandaroundthecountry,toseewhatothers

aredoing.• Dothiswithsimilarandalliedindustries.• Consultwiththebestpeopleyoucanfindwhounderstandtoday’stechnologyandhowtobest

adaptit.Askforatechnologyassessment.Takethetimetomakesuretheyfullyunderstandhowyourbusinessworks,whereyouaretoday,andwhereyouwanttobeinthefuture.

http://www.thewindowsclub.com/digital-disruption-definition-meaning-exampleshttp://www.thewindowsclub.com/top-digital-disruptions-businesshttps://www.wired.com/2015/08/arrow-ny-taxis-app/http://digitalintelligencetoday.com/the-10-business-models-of-digital-disruption-and-how-to-respond-to-them/https://www.weforum.org/agenda/2016/01/digital-disruption-has-only-just-begun/http://digitaldisrupt.bcgperspectives.com/http://www.cioinsight.com/it-management/innovation/slideshows/how-drivers-of-disruption-are-impacting-business.htmlhttps://www.accenture.com/us-en/digital-disruption-indexhttp://www.itbusinessedge.com/slideshows/9-successful-digital-disruption-examples.htmlhttps://www.entrepreneur.com/article/253429http://www.sage.com/za/newsroom/sage-south-africa/2016/09/01/reinventing-your-small-business-digital-disruption-unleashes-new-opportunities