It is not uncommon to hear the word “Digital Disruption” in business circles in the last ten or more. What exactly is “Digital Disruption” and why does it matter to businesses? And what can we do about it?

Before Disruption became digital

it was already around for hundreds of years. What we mean by Disruption is the interference to our daily business routines brought about by technology. The invention of the steam engines, of motor vehicles, of printing presses, of washing machines have all brought about some form of changes in either business or everyday lives. But nothing as much as the invention of the computer.

Computers brought about the greatest disruption to business and then to human lives. Computers were able to help companies cut down on manual tasks, speed up business processes and increase productivity and efficiency. As companies begin to use their computers to capture data about their customers, their business activities, their processes and so on, they realized that they could put the data to good use to improve their business. At that stage, the world entered the Information Age, where many employees were then classified as Knowledge Workers.

As the world became aware of the power of computers and data, and how technology can be a powerful weapon to improve business competitiveness, the pace of technological advancement doubled, then tripled and now more than 10-fold. We have now entered the Digital Age and the world of Digital Disruption. 

How does Digital Disruption work? 

When the Internet and World Wide Web came into the world, they were considered gimmicks, and nobody took them seriously. Some avant-garde companies decided to use the internet to advertise their products and services, but the rest of the enterprises did not see a need to make use of the World Wide Web. Until the likes of Amazon introduced online shopping, which we called e-commerce. That disruptive technology caused an upheaval in the industry. The Internet was suddenly no longer a nice-to-have technology for everyone. If your company cannot have a presence on the Internet and you cannot do transactions, you will lose out to the competitors.

That is the nature of Digital Disruption – new technologies coming into the market to help new and existing companies to take away your customers. When revenue from your customers fall, your profitability falls and soon, your staff will have to be made redundant to reduce business costs. So, in one way or another, your employees will be affected by Digital Disruption.

Over 60% of professionals state that their industry is being disrupted or has unpredictable market conditions.
Source: State of Digital Business Transformation

The whole business world had a rude awakening when Covid-19 struck. Due to the necessity to lock down the people to their homes in many countries, business, as we knew it, could not be carried out as usual. Many employees had to work from home. Food and beverage establishments had to be shut down, so food had to be ordered online and delivered by food-delivery couriers. Businesses that had no e-commerce capabilities suddenly found themselves unable to function. The government had to provide big subsidies to companies that were badly affected by the lockdowns. No amount of subsidies were able to rescue some companies from bankruptcy because of severe cashflow problems. Digital Transformation became mission-critical for the procrastinators. Either transform or go out of business.

Just what is meant by Digital Transformation and what is the process of transformation? 

Digital Transformation is the adoption of digital technology by a company to improve its business processes to as to add value for its customers. Often, to be competitive, innovative technology is needed, not just keeping up with the Joneses. Digital Transformation must start from the top of the organization and permeates through every level of the employees. There must be a clear vision of what is to be achieved in the transformation because such an exercise often entails a lot of pain and a lot of adjustments when business processes are being overhauled.

Organizations today are talking about transformation with an agile mindset. Mindset is a set of beliefs, principles and way of thinking. An agile mindset is about creating and responding to change in uncertain and turbulent environments. Thinking through how you can understand what’s going on in the environment, identify what uncertainty you’re facing and figure out how to adapt as you go along. 

A survey of employees found the most common obstacle for digital transformation was the CEO at 35%.

Nancy White,

An important principle of agile transformation is to have a transformative vision from the leadership. It is focused on building a digital experience with the customer through driving insight through data-driven visualization. This means putting the data collected from your interactions with customers and deriving insight through data analytics, and this in turn is used to drive changes in business processes. What the organization needs is Digital Agility, Digital Agility describes the ease with which an organization can rapidly enable, update, change, or adapt their processes. It is a specific type of business agility that encompasses the processes, tools, and software an organization uses to perform basic business functions. The ultimate aim is to build a culture of customer-centricity.

Why is customer-centricity important? 

In today’s world of business, its all about keeping the customers engaged by keeping them happy. If customers aren’t happy, they won’t stay with your brand. If you don’t have customers, you don’t have a business.

In essence, therefore, the fundamental change in an organization, to kick off the process of digital transformation is to focus the mindset of the employees on understanding the customer. We call that understanding the Customer Journey. The moment a customer is introduced or interacts with the organization, we have to keep him engaged and understand his needs, so that we can serve him better and give him the products that he needs in his journey with us. So where does the digital part come in?

In the Digital Age, technology has given a lot of tools to organizations to interact digitally with the customers. In the good old brick-and-mortar world of business, customer interaction is limited to physical contact and what little we know about the customer through each encounter with him. In a digital organization, all customer data are kept in databases, which can be analysed so that we can have better insight on customer preferences, customer complaints and compliments. The purpose is to be more intimate with the needs of the customer, so as to keep him engaged with us and to upsell our services if there is a need. We can’t do all these we the organization still relies on paper-based manual records. In fact, being digital is a fundamental need for any business. 

Intelligent systems will drive 70% of customer interactions by 2022. “Top CX Trends for CIOs to Watch”, Feb 2020

By being digital, the company can then introduce technologies like Artificial Intelligence and Machine Learning to enhance our call centres, introduce e-commerce capabilities and payment systems to reach out to more customers, implement supply chain management systems to connect across the supply chain and Customer Relationship Management System to personalize our service to the customers.

If being digital is so simple, why are a lot of companies not doing it? 

As I said in the beginning, digital transformation is a mindset problem. Any change in an organization is usually met with some resistance from the employees. People do not like change because change disrupts the order of things, changes the work routine, causing some staff to be redundant and generally means that there is a lot of learning to do. Therefore, Digital Transformation must come with Digital Leadership. The will of the company to transform must be dictated by management and it must be communicated to all levels of employees. True Digital Transformation requires employees to have an innovative and agile mindset to adapt to changes in the business and technological environments. Customers today have many options. If you can’t change but others can, then the business goes to your competitors. That is the reality of life today.

Are we ready to change? 

Previous articleState of Marketing 2021
Next article6 Tips for You to Regulate Your Stress Response
Prof Alex Siow is currently Professor (Practice) in the Department of Information Systems and Analytics of the School of Computing, National University of Singapore and a teaching staff of the Advanced Computing for Executives. Prof Alex was the Managing Director, Health & Public Service at Accenture. Alex started his career as a Structural Engineer in the HDB in 1981 and was appointed the Chief Information Officer in 1989. In 2003, Alex joined the private sector and became the Senior Vice-President in StarHub Ltd. He held various portfolios including Head, Business Market, CIO and Head, Enterprise Risk Management. Prof Alex was very active in the IT Community. He was the President of the Singapore Computer Society from 1997 to 2001. He was the President of IT Management Association from 1995 to 1999. He was the first President of the Singapore Chapter of the Project Management Institute and served from 2001 to 2012. He is also currently the Chairman of the Cloud Security Alliance Singapore Chapter. Alex is currently Chairman of Toffs Technologies Pte Ltd, an independent director of Tee International Ltd, a member of Temasek Polytechnic Board of Governors, a member of the Board of Trustees of Singapore University of Social Sciences and a member of the Board of Directors of the Ang Mo Kio Thye Hua Kwan Hospital. He is also Chairman of DART Consulting and Training Pte Ltd and Red Alpha Pte Ltd and a director of Wesan Future Design Pte Ltd. He is a Strategic Advisor to Nityo Infotech, Alibaba Cloud and U3 Infotech. Prof Alex’s expertise is in IT Governance, Enterprise Risk Management, Management of Emerging Technology and Technology Roadmap Planning. He is also active in the Fintech and blockchain community. Prof Alex’s book “Leading with IT: Lessons from Singapore’s first CIO”, published in Feb 2021, was on Amazon Singapore’s bestsellers list.