Digital, death and taxes

skull and coinsHarvey Nash recently published the results of its annual CIO survey. This year’s study covered 3,691 IT leaders from more than 30 countries. One of the findings being reported is that 10% of respondents do not think that their business will be affected by digital disruption in the next few years. The flip side to this statistic is that presumably the other 90% do think their organisation could be disrupted in the short- to medium-term.

That figure is consistent with research published last year by Forrester based on a global survey of executives that found that 93% of respondents believed that digital would disrupt their industry within the next 12 months.

And a recent study by Vanson Bourne revealed that 68% of respondents said that digital technologies were already having a direct impact on the way they do business. The survey, which covered 3,600 executives from 18 countries, also found that 73% of executives believed that digital will directly impact the way they do business at some point over the next five years. Whilst these numbers are not quite as high as the other two surveys and the time horizon is a little longer the key point is the same: if your industry is not already feeling the effects of digital then it soon will; it may be just round the corner or it may happen in a few years time. But it will happen. It is a question of when, not if.

But can we trust these surveys? If the UK’s recent general election has told us anything about polls and surveys it is that they can be wrong. And, as was the case with the UK election, having multiple surveys all saying broadly the same thing is not necessarily an indication that their forecasts are correct. It was only when the first results were announced – and hence when actual data became available – that the real story started to unfold.

The good news is that as far as digital is concerned we already have some real data to validate these survey findings. Just look at the media and banking industries where disruption has been happening for some time. Think about companies such as Blockbuster and Borders that no longer exist as a result of digital disruption or Kodak that was forced into bankruptcy. And consider what AirBnb and Uber are doing to the taxi and hotel industries.

There is clear evidence that digital is happening to some extent in every industry. And its effects and reach will continue to grow until it becomes the norm – the standard way of doing business. And when this point is reached we will no longer need to use the word digital as a prefix.

There will be many more casualties along the way. Many more companies will join the list of victims of digital disruption. Businesses that refuse to change or that simply cannot change quickly enough will cease to exist. The only real question is how long it will take to reach this point. And that is the real lesson from the numerous surveys about digital and its impact: most business leaders know digital is coming to their industry and they know the risk of disruption is real, but they just don’t when it will happen.

For the unlucky ones it could be imminent; there may be already be a company out there – possibly a start-up – that is about to launch an Uber-type alternative to their core product or service.

The more fortunate organisations have time. But they need to use it wisely; they need to act now to prepare their businesses for digital. For many this will require a significant transformation. They will need to reinvent their business model, change their culture and implement policies, processes and systems that are fit for the digital age. This may even involve disrupting an existing and healthy revenue stream to create a new, digitally-enabled source of income that is more sustainable in the long-term. And while that may sound like a frightening thought for many CEOs, that is exactly what a start-up or a competitor will be trying to do at some point in the future if they are not already. It is better to be in control of the disruption than reacting to it when it happens.

Just like death and taxes, digital is inevitable. Eventually every business will need to become a digital business if it wants to have a long-term future. The message to CEOs is that they need to act now to maximise their organisation’s chances of being around when the digital prefix is no longer required.

If your organisation wants to develop a vision and strategy for its digital transformation, or reinvent its business model for digital then please contact me or visit my website, axin.co.uk.

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  1. […] the threats and opportunities of digital are well known. And we know that digital is inevitable: regardless of where you are in the world, what type of business you are and the markets in which […]

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