Are you prepared for digital disruption? Thanks to the storm of cloud, analytics, mobility and a cluster of emerging technologies, it is predicted by Cisco that average time to a disruption is shortened, more precisely, 3.1 years across 12 industries. But how much do we really know about digital disruption? Is it another buzzword, another hyped IT fashion? Is this all there is to it?
First and foremost, what is the difference between digital transformation and digital disruption? It came as no surprise that people have mistaken one for another. Digital transformation puts the emphasis on adopting digital technologies to the current business model with an aim to quantify and improve its performance. While digital disruption also indeed affects the company’s business model, the effect is not planned and the consequence might be much more complicated. Digital disruption forcefully changes a company’s value proposition and its market position.
This vortex represents digital disruption;
Firstly, more center the industry’s position is, the more competition there is.
Secondly, the movement towards the center is highly chaotic, namely, a peripheral industry can be on the outlier one moment then it will be drawn into the center next moment, the path is almost impossible to predict.
What is more interesting about this graph is that it raises a point of “combinatorial innovation”. The term “combinatorial innovation”, it is defined by Cisco (2015) as follows:
“the decomposition of value sources into constituent digital parts that are then recombined—enabling the invention of not only the next generation of technologies but also different types of breakthroughs in the form of new business models”. This kind of disruptor has a profound impact on a company’s sources of value since the disruptor works on multiple levels as a result of being a hybrid invention. More specifically, company thus should look out for its impact on three values: cost, experience, and platform.
Raising awareness and being able to tell the difference between digital disruption and digital transformation will contribute to a more responsive and effective strategy.
Reference:
Cisco. 2015. Digital Vortex How Digital Disruption Is Redefining Industries. Available on https://www.cisco.com/c/dam/en/us/solutions/collateral/industry-solutions/digital-vortex-report.pdf
