Digital transformation is changing how businesses operate around the globe and bringing with it an evolution of powerhouse disruptors
When we say powerhouse, we don’t mean corporates. Most likely the big players are the ones who will be disrupted by smaller, innovative and technology minded start-ups with a leadership who see the digital future.
Whilst having a clear vision, purpose, goals and principles are imperative for success this can lead to a delusional business model and complacency. It creates an unwillingness to change and inability to adapt quickly once a new company enters the market, a current competitor adopts a new strategy or a pandemic strikes without warning.
Most companies are aware of the real threat of cyber security with spending reaching 123.8 billion U.S. dollars in 2020. Whereas the investment in digital transformation is projected to reach 2.3 trillion U.S. dollars by 2023. These figures may suggest that with the accelerated implementation pace of digital technologies disruption is more likely. This is something leaders should be realistically concerned about and similarly to protecting their business from hackers they should be doing the same against disruptive innovators.
In today’s turbulent economy it is impossible to excel in a digital market unless leadership are scanning for new technologies and once identified are willing and able to incorporate these into every day ways of working.
Why do businesses need to think digital?
Going digital alters traditional ways of working. It dramatically changes how a company manages products, services, relationships and business models. This can include improving process tasks, optimising customer experience, team collaboration, connectivity between internal and external organisations and partnerships formed through supply chains. But it can also be the deciding factor between success and failure.
When companies incorporate digital components such as automation, AI, machine learning, data analytics, IoT and improvement in processes they are doing more than just making their business more efficient. They are altering industry landscape of the future. Those who embrace the network era investing in technology to boost internal functions and delivering better services to customers will be positioning themselves within the revolution.
CIO’s and IT leaders
Being digital is the modern way to ensure growth and sustainability. It provides opportunities to enable transformation, be disruptive and gain a competitive advantage in the industry. But it also evokes a change of thinking. CIO’s and IT leaders must become digital evangelists, persuading and negotiating with executives to investigate and determine if transformation can add value or at the very least mitigating disruption to their business.
No longer is digital transformation just about infrastructure or people-based systems it must enthuse executives to think and act smart.
Culture begins at the top of the organisation filtering through to middle managers where it flows out to team structures. If a company wants to instil a digitally minded approach, then it must be embedded at board level. Only then can the organisation embrace the benefits of becoming streamlined, more cost effective, generating higher profits, satisfying customer demand and gaining a wider competitive advantage.
The digital concept is not going away and those businesses who stand still or refuse to even consider the realities of digital strategies will ultimately pay the price.
Why should companies care about disruption?
Firstly, disruption happens more in today’s market than in the past. Industries are no longer closed doors. The bad news is that anyone at any time can sneak in and disrupt an entire sector. And whilst this changes how industries operate, the good news is that incumbents don’t need to just lay down and accept it.
They have the opportunity to react. This might involve changing a portion of their business model or they may wish to undertake a major pivot and go in an entirely different direction moving away from their traditional model in order to win back market share. Whichever they choose doing nothing will eventually impact their business.
Altering business models?
It’s well understood that corporates can become a victim of their own success. They are usually heavily resourced, sluggish with thick layers of bureaucracy which makes them unable to respond quickly.
This is where applying a digitally altered mind-set is crucial.
They need to continually ask themselves:
- What will their sector look like in five or ten-years’ time?
- Is disruption in their market likely?
- What are other industry leaders doing?
- How might it disrupt operations?
- What can be done to mitigate impact?
- Which areas of their business are most vulnerable?
- What is the cost of doing nothing?
These commonly used statements are simple and will help leaders to start thinking about transformation opportunities and what it could mean for their business.
All answers relate to their ability to develop real case scenarios to plan for an attack and fend it off. Planning for both optimistic and worse case scenarios. E.g., Include implementing agile teams who can be responsive focusing on the work at hand to eradicate insufficient processes. Incorporating lean methodology creating a high level of customer value with less work.
If the threat becomes a reality, then they need to be prepared to alter or adopt another strategy.
Therefore, in order to remain vigilant a strategy needs to be adaptable and dynamic. Enabling a shift of gears with quick decision making and diverting resource allocations to take advantage of new technologies. This may require a reduction in costs, selling off assets to reinvest, changing business processes, restructuring the organisation or introducing new products & services. Leaders need to decide what they are prepared to do and act fast.
VERITAS
At VERITAS we entered a well-established market to purposely disrupt the way clients and resources deliver and manage Inspection Services. Our size and vision were to our advantage so was our speed to market. We used a small team of radical thinkers to develop a QA/QC platform capable of increasing efficiencies whilst maintaining a high standard of quality clients had come to expect from incumbents.
As the disruptor we looked at what customers wanted versus what competitors were currently delivering. We stripped away the noise and decoupled the process where a client has to go through an agent to source inspectors. Now clients have a direct link to resources. Plus, as this all takes place in the cloud clients don’t need to worry about infrastructure or effects on internal legacy systems. They can communicate and obtain information such as the final inspection report by simply logging into their account.
By removing out of date processes we have created a streamlined work flow which saves time, effort and money without affecting the quality. All of this was made possible by the use of digital transformation and a vision to change traditional ways of working.
And now we have the infrastructure in place and an agile work force we have the ability to scan the industry. If we feel an attack is imminent from a competitor, we can react quickly without reorganising a heavy structure.
None of this would have been possible without the use of digital transformation.
Conclusion
Many businesses still don’t seem to think that digital transformation will impact their industry. Particularly where incumbents remain comfortable with an established customer base who remain at present happy with the products and services on offer.
But with technology consumers in the driving seat, they’re wants and needs are changing. They are demanding better value at a cheaper cost and at greater speeds. This creates the perfect environment for the next start-up to enter and radically disrupt the market.
If executives want to unlock effectiveness and efficiencies in their industry, they need to stop waiting for the digital future to arrive and accept it is already here. The reality is causing disruption and it will continue to develop as long as obsolete ways of working get in the way of delivering value to customers.