A recent report titled "Digital Vortex: How Digital Disruption Is Redefining Industries" from the Global Center for Digital Business Transformation predicted that 4 in 10 incumbent leaders across all industries will fall victim to the digital vortex in the next 5 years. But what is the "digital vortex?" It is, as Joseph M. Bradley explained in Cisco's official blog, "the inevitable movement of industries toward a 'digital center' in which business models, offerings, and value chains are digitized to the maximum extent possible."
While 40 percent of companies being consumed by the digital wave in five years sounds a bit aggressive, you can't ignore the fact that there are massive changes in the way companies market, sell, recruit, and use technology to run their operations today. And these changes are transforming workplaces across every market. Other findings from the study show how digital disruption is being viewed by business leaders and what the possible repercussions may be of how they react.
Disruption Looms While Executives "Wait and See." The study shows that in 45 percent of companies, digital disruption is not being taken seriously by senior management. Additionally, 43 percent fail to see the risk of being disrupted, and don't have strategies in place to address the issue.
Very Few Are Prepared for the Game. Awareness and the urgency to prepare themselves for digital disruption is surprisingly low among the surveyed companies across 12 industries and 13 countries. Merely 25 percent describe their reaction to digital disruption as proactive.
Disruption is Not an Option. Their position in the Digital Vortex will decide how fast an industry will face disruption. Whether they embrace disruption, or are sidelined by disrupters, digital disruption is inevitable in nearly every industry.
Digital disruptors and tech innovators are emerging in different industry sectors, threatening to overthrow conventional business models faster than ever. The implications are clear--you either embrace digital transformation or stagnate and perish.
Therefore for the average business, it is critical to adopt a proactive approach towards digital transformation. How do we do that? By incorporating a business strategy around business digital transformation. This means we must look at our biggest business objectives and determine the key digital strategies and tools that can help us meet those objectives. Is it easy to achieve? I would never say it is, but one thing is for certain--there is no alternative.
I'll discuss a few roadblocks businesses must address before they can get started on their journey to digital transformation.
Roadblocks to Digital Transformation
Digital transformation is a big step, and one that's not happening for most businesses. What are the challenges or obstacles stopping them?
Slow Decisions. Factors like bureaucracy, old-fashioned hierarchies, internal politics, resistance to change, and siloed operations slow down the decision-making process, a crippling drawback in today's fast-paced business world.
Only-Technology Mindset. Focusing on tech without addressing people's needs, and lacking a vision to align technology with business goals, are recipes for making incorrect choices. This eventually leads businesses to think digital is a money-drainer.
Dependence on Traditional ROI. It is practically impossible to prove the business value of technology through traditional ROI calculations. Businesses need to rethink digital ROI using new KPIs and metrics.
Non-Acceptance of New Tech Trends. Businesses that wish to stay ahead in the digital game cannot ignore the forces of tech transformation--mobile, social, and cloud. Yet, many businesses do so for fear of losing power or control over employees. Businesses need to realize that old-fashioned hierarchies are dissolving, and power is no longer concentrated in the hands of a chosen few. It's time to treat customers and employees as partners.
Fear of Digital Transformation. Change can be unnerving, but digital transformation is not necessarily a scary journey. Businesses need to embrace tech and figure out how it guides their business goals. The onus lies on top management to steer their organization in the right direction.
As the first step towards digital transformation, businesses should identify and work towards eliminating the challenges getting in the way of evolution. With such a profound change approaching us, it is not possible for companies to continue operating in the same old manner without risking their very existence. Business leaders need to realize this and step out of their comfort zone to save their organization from getting sucked into the digital vortex.