Over the next few weeks we will be looking at a whole series of articles on Digital Disruption. Our series will include
The Six Global Trends Shaping Digital Disruption,
The Five key Players in the Internet Space,
The Five Dynamics Shaping Digital Disruption,
We will also be looking at “The robots will see you now : The future of healthcare” and “No time for time sheets : The Future of the professions”. Plus, “The Six Industries of the future and how they will impact your business”.
So what do we mean by digital disruption …
Our series begins today with an introduction : So what do we mean by digital disruption. We sum it up as “A threat to business goals and or financial objectives which can be attributed to a digital product or platform online.
Access to market has never been easier and inexpensive …
The world population is 7.5 billion. Over 3.5 billion have internet access and 1.5 billion have a smart phone. The number of mobile phone users in the world is expected to increase to over 5 billion by 2019. Of which 2.5 billion will be smart phones.
It is the age of the internet of things. By 2020 it is suggested that over 50 billion “things” will be connected to the internet. Computers, laptops, iPads, game consoles and of course phones but also intelligent home devices, talking fridges, networked climate controls and more.
People will be connected to the internet via internal and external devices. The pacemaker hooked up to the mainframe offering real time analytics. The digital dispenser offering feedback on medicine consumption and dosage levels. The nano bots coursing through the veins relaying important data on cell counts, sugar levels and genomic disorders.
Access to market has never been easier and cost of acquisition has never been lower. It is an exciting time for those with the right attitude and the right App!
Software as a Service …
Software Specifically Software as a Service SAAS, is the great disruptor.
We think of current examples like Uber and AirBnB, impacting on the taxi or hotel industry or Netflix impacting on CBS and NBC. The examples of the Kodak moment are cause for concern for any business. Now internet access to the wisdom of crowds is collapsing the time frame of product and corporate life cycles.
Businesses must confront the digital challenge and be prepared to confront and cannibalise their existing business models before someone else does. The businesses surviving in the digital world will those that have created a learning organisation, constantly challenging using a clear strategic framework. Let the cannibals loose in the corporate silos, the new mantra.
Data is increasing at an Exponential Growth ...
Data is increasing at a phenomenal rate. The cost of data processing and storage is collapsing, the speed of access is accelerating. Access to information is universal, ubiquitous and fast, There are few hiding places for corporate intrigue or mystique. Consumers have access to lots of information via a pocket device, any time, anywhere. It is the end of the HIPPO. The highest paid person’s opinion must yield and give voice to the wisdom of the crowd.
Six years ago, Google’s Eric Schmidt claimed we create as much information every two days as has been created since the dawn of civilisation and the year 2003.
In 2015, we probably produced more every day since the birth of the printing press in the first 555 years. The rate of increase is exponential. Videos, photos, audio messages, blog posts are streaming onto the internet in ever increasing proportion. That’s lots and lots of information.
Big data Analysis …
But how to analyse the data. IBM’s Watson or organisations like Palantir will be available to assist the process. Standards set by Google and Amazon in predictive analytics, behavioural analysis and product recommendations will set the standards by which all must be judged.
Big data analysis may yield big nuggets of information to assist business. We must expect more from the data crop, than learning to place disposable nappies next to the beer, or Hershey Bars next to marshmallows in store to accelerate sales.
The great world challenge to end poverty, feed the masses and provide access to water is on hold for now.
An analysis of consumer behaviour at Walmart revealed flashlights were in great demand in response to a hurricane warning but sales of Pop Tarts also soared as a companion sale.
How to cope with the digital challenge …
Our concept of CBS News is an omnipresent in the strategic framework analysis. CBS Competitors, Buyers, Suppliers and News, New Products, Players, Platforms and Products are subject to constant mapping, benchmarking and analysis.
The challenge to collate the date, command the data and deliver the analysis in a format which business peers are able to comprehend and share.
Sectors at risk ...
Which sectors are most at risk? What steps can be taken to alleviate the risk of disruption? All this and more we will discover in our forthcoming series. Businesses must do more to enrich the product or service with information social content and connectivity. Do more of the customers work for them, with recommendations and price comparisons a partial guide
Don’t miss the updates from the Dimensions of Strategy Team. Encourage your friends and colleagues to sign up and join the mailing list. Next week, we will reveal our list of the Ten Books you should read to prepare for the digital challenge and “The Four Global Trends Shaping Digital Disruption.”
In 2000, Kodak had 170,000 employees and sold almost 90% of photo paper world wide. Together with Fuji, the two companies dominated the photo film business. Not for long, in 2012, Kodak filed for bankruptcy. The business model had been unravelled by the development of the digital camera. A classic example of digital disruption, perhaps.
The Kodak “moment” as we term it, lasted over a period of decades. Kodak had developed a digital camera in 1975, the first of its kind, the camera was dropped for fear it would threaten Kodak's photographic film business … so much for “First Mover Advantage”.
Today, businesses do not have the luxury of decades to adjust to the challenge of digital disruption. Digital disruption is now easier, faster and cheaper than ever. The speed of process is accelerating. The rate of change is exponential.
It is the era of the “virtual company”. SaaS, Software as Service is the new fast growth business model. Uber is the great disruptor in the taxi business, yet owns no vehicles. Airbnb is the great disruptor in the hotel business, yet owns no hotels.
The digital masters, Apple, Google, Amazon and Facebook are setting the standards by which all service companies must be benchmarked. Predictive analytics, pattern behaviour, machine learning, neural networks lead us all in search of the great algorithms which will accelerate consumer access and unlock spending in the future.
Understanding the customer, has never been easier but is ever more complex and demanding, such is the growth in the data load. Businesses must adapt to the challenge of digital disruption by first challenging their own organisations and business models.
It is said that when the Chinese developed their stealth bomber, the CIA didn’t see it coming. Don’t be caught out. This is the era of digital disruption - No time to thumb your nose at the clear and present danger. Don't miss out on our series of articles on Digital Disruption, out shortly.
Our YAHOO case study will be released on Sunday 26th June. We think it is our best yet! Here's another chart from the case study. If you have any comments or suggestions, please feel free to drop me a line. Keep up to date with the latest thinking in corporate strategy,