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29 September 2016
Blogs by author: Rob Holtom , Head of Digital Innovation, BT
Digital disruption affects every organisation in the world. Here’s how to deal with it and stay ahead of the competition by finding your digital possible.
Dealing with digital disruption.
SMACIT. How's that for an acronym that demands your attention?
SMACIT is a term coined by digital researchers at MIT, and stands for ‘Social, Mobile, Analytics, Cloud and IoT’.¹ What links these is that, together, they form the major technical and cultural factors of ‘digital disruption’ — the seismic shift that has put digital front and centre of the global economy.
Digital disruption affects every business — whether it considers itself a technology company or not. New entrants to various markets use digital to create new business models. Existing competitors create closer customer relationships based on data. And customers become more demanding as technology empowers them to seek out the best value and most responsive service.
So what can you do about digital disruption in your industry? Well, here are two things that are absolutely critical to achieving your digital possible.
Create a single digital strategy.
Firstly, every company needs a digital strategy. No surprises there. But this digital strategy has to be part of the core company strategy. And, crucially, it has to consolidate an organisation’s responses to all the SMACIT factors. It's not enough to have a social strategy, a mobile strategy, and so on…
Digital strategy is the new business strategy — but one inspired by accessible technology. It acknowledges that you can no longer get competitive advantage from new technology alone (it's too easy for competitors to get their hands on this). But you can get speed, and you can create value through the way you integrate these technologies.
Whatever your digital strategy is — one focusing on new products or transforming customer experience — you need to pick it carefully and pursue it ruthlessly.
Develop a digital services backbone.
Secondly, companies need to reconsider how their technology supports everything that a digital business needs to thrive. And this might mean applying a completely different set of criteria to technology choices you’ve used in the past.
As MIT’s Jeanne Ross puts it, “In the pre-digital economy, we architect for efficiency. In the digital economy, we architect for agility.”
Why is agility so important? Well, strong evidence suggests that the most successful digital-first companies have one thing in common — they are responsive to a changing environment. In many ways, their mantra is to ‘go with the flow’. But this doesn't mean being laid-back and lackadaisical about things. On the contrary, it's about being in a constant state of readiness to grasp new opportunities.
Digital agility entails looking at the technology systems and tools used across the business, and making sure they are empowering it to respond to new digital opportunities.
It's about forming a digital services backbone alongside the organisational backbone that runs through the business. This contains components such as data, identity, analytics and cloud — all accessed via ‘micro-services’ that organisations can deploy quickly to new applications.
An ongoing process.
Responding to the challenge of digital in your industry is not a one-off activity. In fact, it’s likely to be the beginning of an ongoing process of renewal and reinvention. But making sure you have an explicit digital strategy — and the right technology underpinning it — will be absolutely crucial to your success.
• ¹ Ross, J.W., Sebastian, I.M, and Beath, C.M. (2016). "Digital Design: It's a Journey". MIT CISR Research Briefing. XVI:4. April 2016. Available at: http://cisr.mit.edu/blog/documents/2016/04/21/2016_0401_digitaldesign_rosssebastianbeath.pdf/