It is not the strongest or the most intelligent who will survive but those who can best manage change.
– Charles Darwin
We live in a time of unprecedented change. In every sector, digital technologies are changing the rules of business by enabling new business models. Startups are reshaping entire industries, combining technologies like cloud, social, mobile, and analytics to deliver more targeted customer products and services. These technologies are empowering organizations to bypass the traditional costs associated with barriers to entry and connect directly with consumers to meet their needs.
Startups are disintermediating the market leaders. Over the next five years, executives expect digital disruption to displace four out of ten incumbents—or 40 percent of established market leaders. This is a startling prediction. Part of the reason why this will happen is because startups are able to operate and scale at a very fast pace, innovating very quickly—a pace that larger incumbent organizations (with their legacy systems) can’t match. This is the speed of digital and its potential is uncharted. With more people connecting and sharing ideas in a global, digitized marketplace, the pace of innovation will only increase exponentially. The formula is ten times the innovators at one-tenth of the cost and 100 times the power.
Digital Disruption is Stronger and Faster
In a Digital World, the development of new products will evolve from sprints to hyper-connected dashes. Product features will be crowdsourced and collective. Feedback about consumer experience will be collected to upgrade features, improve delivery, and serve niche markets—in real time—removing the developer “safety net”. Every single disgruntled consumer will tell 1,000 potential customers about a bad customer experience. Brands will be built up and destroyed on social networks. Product ideas will be shared across yottabytes (one trillion terabytes) of data and millions of people, as innovation cycles are faster, compressed, and even approach the spontaneous.
Business Models are Advancing
Disruptive technologies are fueling a subscription-based economy. As business moves to the Cloud and mobile access becomes pervasive, the requirements for on-demand services are deposing the mainframe in enterprise infrastructure. Digital innovators are focused on creating exceptional experiences for the digital consumer and benefiting from a lifetime of customer value. As product experiences move to new platforms, companies are measuring their value based on recurring metrics over one-time metrics. In a Digital World, organizations will have to embrace digital disruption or they face the risk of losing market share or becoming obsolete. They will have to disrupt or die.
To keep pace, organizations will have to reinvent themselves. They’ll have to digitize their information and operations. They’ll have to innovate at the front end to capture the mindshare of digital consumers and modernize their back offices to integrate their operations more efficiently across the supply chain. And they’ll have to restructure their IT departments to support a digital workforce. They’ll have to operate at the speed of digital.
All of our customers have embarked on this journey of digital transformation. Here are a few examples of how they are disrupting their business using the Cloud, analytics, process automation, and mobile computing to simplify their volumes of information, digitize their operations, and accelerate opportunities for success:
- Mitsubishi Motors is outsourcing its B2B e-commerce capabilities to the Cloud and achieves stronger integration with its suppliers in Europe, without making additional investments in headcount or software.
- Dell Services is setting new standards of excellence within the IT services industry. Using analytics has helped them drive positive change, increase value, and improve engagement with organizations worldwide.
- First United Bank is using a BPM solution to help it achieve its goal of going paperless. To date, the Company has digitized over 200 processes and converted over 2.5 million documents and images into digital format for considerable business improvements, including overall growth and customer satisfaction.
- The City of Barcelona has a comprehensive digital strategy that embraces delivering more targeted and mobile services to its constituents, based on the innovative mobile identification system called “mobileID”.
Find out how you can capitalize on digital disruption. In my next post in this series, I’ll explore what it means to function as a digital business.
Read my book, Digital: Disrupt or Die.
 “Executives Expect Digital Disruption to Displace 4 in 10 Incumbents by Industry within Next Five Years,” Webwire, June 24, 2015, http://www.webwire.com/ViewPressRel.asp?aId=198501 (accessed July 2015).
 James McQuivey, “Digital Disruption: Unleashing the Next Wave of Innovation,” Forrester Research, Inc., 2013.