The Reality Of Digital Disruption - How To Stay Ahead
Digital disruption is much more than an abstract concept promoted by analysts and vendors; it is now a reality for most organizations. More than one-third of executives in a recent Forbes Insights/Treasure Data survey say they are being directly affected by competition from digital and data-savvy players in their markets.
Additionally, a majority of executives say the risks of digital disruption are high, and many are already feeling the impacts. In fact, 51% of executives surveyed report a high level of risk to their organization (in terms of market share and revenue) over the next five years from technology-driven disruption by startups or innovations by incumbent companies.
The preference for many executives, of course, would be to be on the disruptor side of the equation, not the disrupted. So, what does it take to embark on a data-driven disruption journey? Here are some ways to get started:
- See disruption for what it is: creating new markets or leveraging the power of information to offer solutions in new ways. Companies like Fitbit—providers of fitness-tracking apps—know how to use 360-degree customer data to increase loyalty through precision segmentation and retargeting. With comprehensive customer data, these companies can more readily show correlations between customer behavior and the likelihood to buy or remain loyal. Fitbit recently launched a brand campaign that features user’s stories to show that the devices are much more than step counters. The campaign aims to increase brand awareness and engagement and drive user acquisition by reinforcing the global impact Fitbit has had.
- Be the disruptor. The best way to fend off disruptors is to become the disruptor. In the Forbes Insights/Treasure Data survey, executives showed a strong preference to see themselves as the disruptors in their sectors, and a majority are looking to shift their business models using data-driven products and services, or by linking up with digital-savvy players. Those who are already making headway and becoming disruptors themselves are seeing greater returns. A total of 83% of executives who see their organizations as market disruptors report increased revenue over the past three fiscal years, compared with 54% of those in non-disruptive or partially disruptive enterprises.
- Surface your data assets. With the influx of data that an increasingly digital world creates about customers, access to clearly organized, consolidated data is crucial. Not only is siloed data a problem, but executives need to ensure that data is organized and accessible to the teams who are making day-to-day decisions about how to reach customers better.
- Think of ways to create entirely new products or services through new channels. The most likely form of disruption is through the actual monetizing of information technology: The survey shows that 59% of companies delivering at least some degree of disruption say they are doing so by leveraging data or software as value-add products or services. Another 57% are facilitating innovation by going outside of their organization—either through partnerships with or acquisitions of innovators, startups or disruptive companies. A majority also see disruptive innovation being achieved through the deployment of customer data analytics and insights, to provide a customer experience that exceeds that offered by existing companies in their markets.
The disruption that is radically reshaping today’s markets—as well as creating new ones—is driven by data, with the goal of enriching the customer experience, and delivering goods and services on demand without so much as a hiccup in supply chains or response systems. To accomplish this, data needs to move fast, seamlessly, and be accessible. As Holger Hürtgen and Niko Mohr, both withMcKinsey, recently put it:“Data has become the new corporate asset class—and the best way for companies to generate and access it is to digitize everything they do. Digitizing customer interactions provides a wealth of information for marketing, sales, and product development, while digitizing internal processes generates data that can be used to optimize operations and improve productivity.”
Those organizations leading the way and digitally disrupting their markets have learned to employ customer data in new and innovative ways not simply to be disruptors, but to provide superior customer experiences. Surviving and thriving in today’s digital economy demands no less.