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'No industry safe from digital disruption,' says business scholar

23/05/2016 by Pascal CALOC


"The analogue paradise is over" and businesses should embrace digital transformation before digital disruption comes along to shake up their industry, says the Adjunct Professor of Strategy at one of the world's largest business schools, INSEAD.

Writing in a blog on the INSEAD website, Annet Aris says that "no industry is safe from the tsunami of digital disruption", but some will experience it sooner than others.

She notes how some industries have already "fallen victim to the digital trap in the last decade", such as the music, travel, telecoms and retail sectors, with the payment, automotive and logistics industries the next in line.

Firms should be asking if there is a chance their industry will be disrupted in the near future, writes Aris. She claims there are three key factors that increase the chance disruption will occur.

The first being the amount a business wastes, which includes the unused capacity, any time-consuming processes, or actual waste.

The second element that a firm should look at is how much money they make by being opaque, i.e. how much does business rely on clients using a suboptimal product because it is too complex or too difficult to find something better.

The final thing they should access is whether their industry "forces clients into artificial strait jackets" because it fits with production processes or sales processes.

"If the answer to one or more of these questions is yes, then beware – it is certain that disruptive digital innovation will arrive sooner or later with new companies offering your customers more convenient, complete transparency and tailor-made products," Aris writes.

She concludes by claiming that the closer a business is to the end consumer, the more vulnerable they are, as a consumer can quickly decide what is best for them.

Strongly regulated industries, meanwhile, and business-to-business firms will, for one reason or another, be protected against digital disruption for longer.


Digital Transformation, digital innovation, Digital Disruption

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