Business in the Age of Digital Disruption: How to Stay Afloat

Now, here, you see, it takes all the running you can do, to
keep in the same place. If you want to get somewhere

else, you must run at least twice as fast as that!

Lewis Carroll, Through the Looking Glass

When you first hear the phrase “digital disruption”, it sounds vaguely alarming and suggests a threat to your business. True, digital disruption is, in fact, a great challenge, but at the same time, an amazing chance to revamp your business strategies and adapt to the rapidly changing world. When you take a proactive position, become “the disruptor” rather than “the disrupted”, you will ride this wave and emerge the winner.

What is digital disruption? - Digital disruption is the effect of digital technology on the existing business flows and patterns. Technology advance is the commonly accepted fact, it cannot be stopped, and businesses trying to reject, deny or ignore it will eventually succumb to the competition, while those ready to embrace it and adapt to it will thrive.

digital_disruption-business

The textbook case of a company which refused to adjust to the obvious changes and had to ultimately yield is the story of Kodak, a whale of the imaging and photography industry, which missed every opportunity offered by digital photography and was forced to throw in the towel. Its market share was quickly filled by Sony and Canon who were not afraid of adopting new technologies and methods and became leaders of the pack in the digital imaging industry.

So, how can a business survive digital disruption? As we have already seen, accept that it is going to happen, whether you want it or not. The next step is to view it as an opening to digital transformation – the adaptation to the increasingly more digital world.

Your digital transformation strategy will need to affect all aspects of your business – organizational, technological, and cultural. In general, when you are embarking on a digital business transformation, your strategy should include the following trends:

  • Adjustment of leadership – digital disruption brings the Chief Information Officers (CIOs) in the spotlight but also requires them to be highly perceptive to change and understand the importance of digital technology
  • Encouragement of digital technology integration and innovative approaches
  • Preparedness to abandon long-standing business flows in favor of technology-based ones
  • Preparedness for failure and ability to promptly switch to Plan B
  • Commitment to implement transformation technologies on the company-wide scale ensuring collaboration by all business units
  • Introduction of digital technologies into customer experience

Naturally, the industry your business is operating in influences heavily its digital transformation strategy. For some industries, digitalization comes easy, while for others it is a lengthy process with certain obstacles. However, there are certain best practices for individual industries which can help a company to digitalize in a safer, more reliable and more effective way.

Digital Transformation in Healthcare

From the point of view of digital transformation, health care is a slow starter. The industry is very old, bound by traditions and extremely heavily regulated. This is why it is so reluctant to change and to embrace new technologies.

However, even if slowly, healthcare shifts towards digitalization. Despite its regulatory load, there are areas which are quite ripe for transformation:

  • Accessibility, both for patients and doctors. Mobile devices are taking over the ever-increasing share of doctor appointments. Doctors use mobile applications to access patients’ medical records which are now more often stored in clouds than on paper files. Patients can look up their test results online. Of course, this requires an absolutely watertight security system, as patients’ privacy is above all.

digital_disruption-healthcare-industry

  • Wearable devices and IoT. Today, a portable digital device can measure your blood sugar, take your ECG and a number of other tests. These devices are now as common, as thermometers. Moreover, they can send the results of measurements to your doctor immediately reducing delivery time almost to nothing. When health is concerned, saving time can literally mean saving lives.
  • Remote care. Naturally, the majority of medical cases require personal attendance by a doctor; however, routine checkups for chronic patients or follow-up visits after a treatment can be organized remotely. The patients are no longer bound to a place and have more time as they do not have to travel to the doctor’s office anymore.
  • Financial transparency and accountability. With healthcare costs steadily climbing up, patients tend to seek information about their doctors, including other patients’ feedback, and to search and compare treatment prices before accepting the proposed schedule. Complete information on the doctor and the clinic available to general public and references in social media can help patients choose the most suitable options.

An example of a digitally transformed medical institution is the Mayo Clinic which dates back to the late 19th century. Now, in addition to providing a range of medical services and treatments, the clinic offers a line of online services including appointment scheduling, prescription refill, treatment provider selections and others.

digital-disruption-healthcare-online-mayo[Image source: Mayo Clinic]

Digital Transformation in Banking

Banking is another ancient industry which is not very eager to change its centuries-old traditions and processes. However, the big legacy banks are now witnessing their niche taken over by the so-called fintechs, nipping at their heels and forcing them to change their approach to doing business.

The term “financial technologies”, or “fintechs”, does not include only the small players of the financial services market. It also refers to large providers of financial services, such as credit card companies or stock exchanges, and to technology companies for which financial services are not the primary or exclusive business domain, such as Google. However, they can cause disruption in the market of financial services due to lighter regulatory burden and broad integration of digital technologies.

A fintech is usually centered around one particular field where they can apply their innovation, for example, payments or insurance. Mobile payments are gaining popularity incessantly, with investments now in the range of billions of dollars. Large companies, such as Google or Apple, have implemented their native payment platforms and continue to improve them, making customer experience easier and smoother. Supermarket chains and social media have also started to develop own payment systems. And let’s not forget Bitcoin which is both a cryptocurrency and a peer-to-peer payment system where users perform financial transactions directly between each other.

digital_disruption-bitcoin

Another area which is heavily affected by digitalization is lending. Again, use of technology and less strict regulations allow to offer new products, create new lending models, such as direct lending between customers, approve loans quickly. Fintech lenders gather data on their potential borrowers from multiple online sources to estimate their credibility and ability to repay the loan. Peer-to-peer lending marketplaces, where the company acts as an intermediary between the lender and the borrower, allows giving loans without attracting deposits which is how traditional banks operate.

The banks have to consider all these factors in planning their business strategies and they are forced to change their usual ways to keep pace with their digital competitors. Most banks have already shifted their operations into the digital space by offering a whole range of online services:

  • Account opening
  • Loan application
  • Payments
  • Support and assistance

Chase Bank which has been serving its customers for more than two hundred years quickly adapted to the challenges of digitalization and, as many other banks, supports online banking and a mobile application available both for iOS and Android devices.

digital-disruption-banking-online-chase[Image source: Chase Bank]

Digital Transformation in IT

It may sound strange, but IT, which is highly digital by nature, can also benefit from the digital transformation. However, for IT, the transformation strategy follows a different direction.

What are the key elements of digital transformation when it concerns an IT company? They are shaped by such factors as reducing time-to-market and achieving high flexibility of the development process:

  • Focus on the product rather than on the project. This way, you will roll out a complete solution faster, although, you will have to sacrifice long-term planning along the way
  • Consider agile development instead of waterfall. The waterfall approach, when you plan the entire process and finish with a complete solution, is rather inflexible when you have to make changes when you are about halfway done. Agile, on the other hand, is designed for delivering code in batches and is, therefore, better suited for making minor changes as you go along. Besides, frequent releases allow easier adjustment to the market trends
  • Think mobile. Mobile devices become increasingly more functional and their numbers grow with every day. If you overlook mobile in your development, it can cause you that one shot at success in the digital world
  • Factor in the social media. Nowadays, social media can become a tremendous driving force for your business. It is a workable strategy for engaging your customers and improving brand awareness

digital-disruption-technologies-innovation

How to Survive Digital Disruption

Accept it. The sooner you accept it and start adapting to its challenges, the better chance you have to withstand the fierce competition and keep your share of the market.

Invest in change. A resourceful CIO can help reorganize your business so that it benefits from digitalization. Of course, technology has its cost as well, but that is an investment which will pay off in spades.

Be quick and proactive. In a digital world, it’s all about time and speed. Switch to incremental processes instead of long-term planning. Such strategy gives you room for change and allows flexible adjustment of the initial plans, if necessary.

Be a forerunner. The quicker you adopt a new technology, the better you will stand out against your competition.

Focus on mobile. The popularity of mobile devices is gaining momentum, and all services, from local providers to global giants, are getting mobile applications to be always in their customer’s pocket. Today a mobile application is not just one of the options, it’s a must-have.

Take no chances with security. Digitalization brings easiness, convenience, freedom, and speed, but it also carries the increased risk of sensitive data compromise. Protecting your own and your customers’ data must become one of your primary concerns when you go digital, as just one security incident can tarnish your reputation.

Regard digitalization as a brilliant opening for your business. You have a great product – so make it digital!

↑ Go up

Similar post