Capitalizing on Digital Disruptions

Capitalizing-on-Digital-Disruptions500176343BlogThere is no question that forces like globalization, changing demographics, harsh economic environments and rapidly changing technology are creating challenges and conditions never experienced before. In this new world with volatility, uncertainty, complexity and ambiguity (VUCA) the only certainty seems to be the unstoppable and accelerating pace of technological advancement.

In order to survive and thrive in this new era, organizations need to become more innovative and agile in order to capitalize on the opportunities that technology can provide. IT and non-IT individuals need new skills and knowledge.

So how are we doing in Canada? Only 13 percent of Canadian organizations are truly ready to deal with this disruptive advancement of technology, according to research published recently by Deloitte Canada. It is time for Canadian organizations to start focusing on developing the capabilities, skills and competencies required for individuals and businesses to succeed.

There are four ways that organizations are leveraging technology:

  1. Business model innovation
  2. Business process innovation
  3. Improving their customer experience
  4. Improving their employee experience

Business Model Innovation

The first way that organizations can capitalize on digital disruption is to leverage technology to innovate their business models. Business model innovations can include:

  • Digitally modifying or complementing existing business offers or physical products
  • Creating new digital business lines

For example, many sports apparel manufacturers are complementing existing physical products, like running shoes or T-shirts, with digital services like the ability to track your work out details or even monitor vital statistics. Nike has announced a new partnership with Apple to expand their wearable offer.

Ikea has also come up with a way to add technology to their physical products – they have introduced furniture that wirelessly charges smart phones.

Other organizations are creating new digital business lines. One example of this would be a retail organization adding e-commerce or m-commerce to supplement their physical brick and mortar stores.

Business Process Innovation

The second way that organizations are using technology to improve revenue is through business process innovation. Business process innovations include:

  • Digitizing manual business processes
  • Giving employees technology tools to help them perform tasks more efficiently and effectively
  • Improved decision-making

In the past decade many organizations have spent time re-engineering business processes using technology to drive efficiencies and cost savings. The difference in the new digital world is the degree to which organizations are leveraging social, mobile, cloud, and analytics or even advanced technology like robotics or drones to completely reinvent the way they do business.

For example, shepherds in Ireland are using drones to herd sheep, and some law firms are experimenting with academic organizations on how to use artificial intelligence to provide legal advice.

Tesco, a grocer in the U.K., is using technology to digitize a business process and improve employee productivity. At their distribution center in Ireland, Tesco workers move among 87 aisles of three-story shelves. Employees wear armbands that track the goods they’re gathering, freeing up the time they would otherwise spend marking clipboards. A band also allots tasks to the wearer, forecasts his completion time, and quantifies his precise movements among the facility’s 9.6 miles of shelving and 111 loading bays. A 2.8-inch display provides analytical feedback, verifying the correct fulfillment of an order, for instance, or nudging a worker whose order is missing items.

Another industry that is investing heavily in research to automate business processes is the mining industry. Mining companies are researching how to use robots and drones to improve efficiency and lower risk.

Finally, organizations are using digital technologies to drive faster and more effective decision making. The PricewaterhouseCoopers 2015 CEO study revealed that more than half of those surveyed are using digital technologies for decision making.

But it’s not just about better decision making among executives. Chinese smartphone manufacturer Xiaomi is using the digital landscape to crowdsource ideas from consumers to make decisions about product features.

Improving the Customer Experience

The third way that organizations are using digital is to transform their customers’ experiences by using technology to:

  • Increase customer understanding
  • Improve top line growth and create new sales opportunities
  • Increase customer touch points to strengthen the brand or improve the customer experience

We discussed earlier how Nike is using wearables to collect information about the people who use their products, but there are many other examples of how technology is being used to understand customers, generate more sales and increase satisfaction or engagement with a brand.

For example, the Miami airport is using beacon technology to enhance the customer experience by sending relevant information to customers during their entire journey in the airport. The airport can learn from the data they collect to improve services and products. Airlines can take advantage of the technology to send information about flight departures or gates. It also allows retailers to market their products in different ways, improving their overall revenue.

In the public sector there is also innovation going on to improve the citizen experience. Estonia has been one of the most creative in using digital technologies to enhance customer service and drive revenue. They have implemented e-Estonia which includes 23 e-initiatives ranging from online voting to offering e-residency to people from around the world.

This initiative is driven by a strong relationship between the government and the information and communication technology (ICT) sector in the country. This shows the importance of a strong eco-system in the digital era.

Improving the Employee Experience

The final way that organizations can use digital technologies is to transform the employee experience. This allows organizations to:

  • Increase connection with the organization and colleagues
  • Provide employees with a full “new-way-of-working” experience

Employees today use technology in their home lives and want to have a similar experience in the workplace. They want to be mobile, they want the flexibility of working from home when they want, and integrating work and home instead of a traditional 9 a.m. to 5 p.m. schedule. They want to work globally and enjoy collaborating.

This means that employers need to offer employees the conditions that they are looking for, otherwise they risk losing their talent, especially as the millennial cohort increases in size within the organization.

First, organizations need to provide employees with the right tools. Often, employees have to deal with using slower and older devices at work or not having access to the applications and tools that they want. Instead of employers prohibiting social tools in the workplace, organizations should provide employees with the tools they want to use to collaborate with colleagues.

An organization that has done a good job with this is IBM. They have implemented a number of technology-based platforms like a “social dashboard” that tracks employee participation in a variety of work-related social interaction activities. This platform tracks an employee’s collaboration with others, reaction to other people’s posts, sharing of thought leadership or ideas, and the strength of their internal network.

Succeeding in this New World

In order to be successful, organizations need to make sure that they have all the building blocks in place across three critical areas: people, process and technology.

From a people or workforce perspective, organizations need to make sure that their IT and non-IT stakeholders are aligned and cooperating effectively. Silos need to be broken down all over the organization, and new relationships should be established both internally and externally with eco-system partners who can help drive innovation. Improved communication allows stakeholders to drive innovation with a clear strategy and measurement. Finally, there needs to be effective communication and change management. This requires a clear and broadly shared vision with commitment from leadership.

When it comes to processes, organizations need to ensure that important practices like enterprise architecture are in place. Without a proper architecture organizations will struggle with agility. Governance is also critical to success. IT and business operations have to cooperate and involve the right people in making the right decisions. Portfolio maturity and proper program and project management will also make sure that IT investments can be prioritized effectively, and programs and projects are implemented efficiently and effectively. Business analysis is another critical discipline, as the ineffective identification of business requirements can negatively impact the value that the IT project delivers. Vendor management and service management will also contribute to success.

Finally, the organization needs to have a good understanding of the technologies required to implement their strategy and the individual skills required to put that strategy into effect. By having a clear understanding of the possibilities and having a good strategy enabled by the right organizational capabilities and individual skills, organizations can avoid disruption and innovate in order to compete in this complex and rapidly changing environment.

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