We talk to one of the leaders in this area Peter Williams to find out what digital disruption means for your business.
Recently we've seen Uber disrupt the taxi industry and Airbnb shake-up the hotel market. Further disruption in the service sector is coming. Fast. We talk to one of the leaders in this area, Peter Williams, to find out what digital disruption means for your business.
We live in unprecedented times, an era in which all business models are being challenged. The key to ensuring your business survives and thrives is embracing the opportunities the 'digital disruption' trend presents.
One of the thought leaders in this area is Peter Williams, a pioneer of the digital disruption trend. Peter founded Deloitte Digital, a business at the forefront of online delivery of professional services. He has also chaired Deloitte's Innovation Council since 2004.
The term digital disruption is often discussed these days. Peter outlines what it means.
Williams says his friend Associate Professor Kai Reimer categorises digital disruption as 'the changes enabled by digital technologies that occur at a pace and magnitude that disrupt established ways of value creation, social interactions, doing business and, more generally, our thinking.'
Harvard Business School professor Clay Christensen first canvassed 'disruptive innovation' in his 1997 book The Innovators Dilemma explaining how new technologies cause great companies to collapse.
High profile examples include Kodak, which failed to acknowledge digital photography would transform its market, and Nokia and Blackberry which did not predict the extent to which smart phones would revolutionise their markets.
Transforming the services sector
Information technology was the first area to encounter digital disruption, however an explosion of new technologies is now driving the emergence of new business models across many other industries.
"In insurance broking, we are seeing people go directly to online insurers rather than through their broker," says Williams.
In real estate, the role of the agent is changing as buyers use portals to find properties and new digital services, such as realAs or onthehouse.com.au, to find property values. Sites like ratemyagent.com.au use a social network style model to help people select a real estate agent."
He says interesting businesses in real estate that are worth watching include online real estate database company Zillow and the recently launched Opendoor, which makes the real estate buying and selling process extremely simple.
Take advantage of the trend
So what can you do to ensure your business is well positioned in the digital age?
The first thing is to embrace digital. As an example, cloud technologies can help you keep up with the trend. Cloud software is generally significantly cheaper to use and simpler to set up compared to other software, and avoids the need to make big investments before being able to extract benefits.
It's also important to accept mobile is now the dominant way people access the web or digital services. So think about how your customers and staff might use mobile in the way they work with you.
Social software and social media can be implemented both inside and outside your business. Social media inside your business helps improve collaboration, innovation and productivity. Outside your business it can be used to attract new customers, service existing ones, recruit, run events or facilitate customer feedback.
Ultimately, the key is to look at how you can change the way your products and services are experienced with digital technologies.
Mitigating the risks
The digital disruption trend is so advanced, there are now real risks facing businesses that are not taking this shift into account in their forward planning. Now is the time to consider the role of digital technologies in your business.
"If the way people are interacting within your industry keeps marching down the digital path and you keep doing what you are doing, eventually you will be disrupted," says Williams.
"We have seen this in the disappearance of the video store and most book stores. Netflix now dominates the digital entertainment market. It wasn't a secret streaming was coming or that people wanted to watch what they wanted when they wanted. But the incumbents didn't do anything to protect their organisations from this onslaught," he adds.
Today, no industry sector is immune to disruption. There is an opportunity for every organisation to consider what needs to be done to ensure their business model can withstand the advent of newer, leaner and more digitally enabled companies. It will be the businesses that view this as an opportunity, rather than a threat that will be the most successful.
To learn more about digital disruption visit our digital insights page.