Fairfax / Newcastle Herald column June, 2015
RECENT history has proven that business disruption via new technology can be rapid and unforgiving. Apple, for instance, took only seven years to dominate the music industry only to find itself battling the shift from paid downloads to advertising-supported music streaming.
Google Maps took just 18 months to destroy almost 85per cent of the market capitalisation of the world’s top GPS vendors.
The problem for most organisations is that they are not evolving their business models quite as rapidly as technology. Many are still in the relatively early stages of transitioning from industrially driven to digitally driven strategies and operational models.
Nowhere is this more evident than in the Hunter Region where businesses are really lagging in the adoption of new technology to the point that, almost 25 years after the arrival of the internet, only 57per cent of Hunter companies have a dedicated website, while just 37per cent of companies use social media to market their business, according to a recent survey conducted by the Hunter Research Foundation.
This is simply not good enough if local businesses want to survive in an increasingly globalised and disruptive economy.
According to James McQuivey of Forrester Research, “Digital disruption is not only a possibility for your company’s future but the only possibility.”
Disruption is happening. There is no point disputing that. And yet while companies are aware it’s happening, at least two years or more tend to pass before they react.
As negative judgments dissolve, digital is liberated. This means the old days of defining yourself by today’s rules are over. The impossible is now possible, and the mantra “we don’t do that here” needs to go, according to Kai Riemer, chair of the digital disruption research group at the University of Sydney Business School.
For many years the leadership and use of technology resided in the IT department, but that is no longer viable when technology is disrupting entire business models.
There is only one person in an organisation who can ensure that a company’s digital transformation is a success – and that is its CEO. For true digital transformation, the correct resources need to be allocated and deployed.
It demands a digital transformation strategy to simply survive and realise a sustainable future. Though the transition to digital in many industries is slow, forward thinking companies can realise first mover positioning as a digital leader and gain competitive advantage.
I have seen many digitally savvy organisations adapting all aspects of their business, their customer relationships, and the world around them with great success. These leading companies are using technology to transform themselves into digital businesses that combine their industry expertise with the power of digital to reshape their markets.
It is opening up new markets for them, reducing unnecessary overheads and helping them evolve from local to global businesses.
The threat of disruption is very real and should no longer be ignored by Hunter businesses, but the opportunity and potential is significant for those who embrace change and reject the status quo.