Digital disruption - What are we actually talking about?

by Mark Smith on 06/11/2015 10:00

Binary digital information flowing through a cable

In my previous post in this series Digital disruption and other 21st century challenges I claimed that digital has become a major strategic consideration. It is not simply organic growth nor a spot of good innovation, but something much more far reaching that is disrupting the status quo across all aspects of our lives.

In this post I explore further what we mean by digital and why it’s so disruptive. So let’s start with the word 'digital' and see if we can break it down a little.

What is digital?

The Center for Information Systems Research (CISR) at the MIT Sloan School of Management has a useful breakdown of digital into SMACIT technologies, which stands for:

  • Social
  • Mobile
  • Analytics
  • Cloud
  • Internet of Things.

Digital is really big

So from SMACIT I think we can agree that what's potentially disruptive or disruptable is big, really, really big. If we think about the people and things that can be interconnected today we’re talking numbers such as:

  • > 3 billion active internet users
  • 300+ million active tweeters
  • >3.6 billion unique mobile users
  • >1.6 billion active mobile social accounts

If we look at Cloud then presentations from the Cloud Business Summit held in New York last year predict that 60% of enterprises will have at least half of their infrastructure and applications in the cloud by 2018. This is the upper side of big.

Similar signs of 'big' can be found with a quick (digital) search on Google or Analytics and the Internet of Things so it’s safe to say that SMACIT isn’t sitting quietly in the corner of the room.

Digital pervades all of our lives

So, I’ve probably convinced you that the numbers are big but we all know the truism about statistics and lies, so what about context? Well let’s break that down too in terms of people. Let’s start with the individual, me for instance. The digital devices I use? - smartphone, laptop, desktop, tablet, Fitbit, internet radio, streaming audio devices, DAC. Cloud Services? - Gmail, Onebox, Dropbox, Evernote, Skype, Wordpress, Netflix, Spotify, etc etc. Social Media? - Facebook, Twitter, Snapchat, Skype, Viber, Instagram etc.

Admittedly I work in IT so this is only natural. However, my 75 year old mother makes use of at least 50% of these things without knowing the difference between HP and IP.

If we extend the individual to the family unit then I can testify to more than the odd digital conversation via IM and text. In my family we’ve gone from paper to-do list’s to Trello Kanban’s and Teamwork sites for holiday planning. Scaling up we arrange dinner with friends by Facebook, decide where to eat using TripAdvisor, post pictures of the food on Instagram and tweet the experience on Twitter.

Digital is disrupting the status quo in our professional, social and civic contexts too

The impact and opportunity for disruption, transformation and exploitation continues as we widen the context to professional, commercial, business and civil settings. Work practices have and are changing due to digitisation – my smartphone is used for email, appointments, information searching and taking photos of whiteboard notes – sometimes I make phone calls too.

How, why and what we buy is fundamentally changing – I’ve gone from renting a DVD from a store and paying for a one-time use, to subscribing to a streaming service to consume cloud-based digital assets.

Business models are also being disrupted, disintermediated and re-defined, AirBnB, Uber and a vigorously blossoming range of businesses have harnessed digital to shatter traditional hegemonies and reinvent the collaborative economy. It’s a garage sale on a global scale, without the need for the garage or the need to drive!

And finally, at the largest scale, digital is changing society - smart cities are being envisaged in smart nations, populated with smart citizens using smart infrastructure in a hyper-connected digital ecosystem – there’s even digital nationhood and global digital governance as exemplified in the idea of the Bitnation.

Disruption is not (necessarily) negative and it might even be necessary

For some people the word 'disruption' comes with a negative connotation and it’s undoubtedly true that in a complex and volatile world there will be losers – how many new physical bookstores, CD stores and DVD rental stores have you spotted lately? But disruption also creates huge business opportunity to re-imagine traditional businesses, product and services. There are opportunities to challenge limits to growth by going from buying physical assets to sharing digital assets. The disruption also potentially grants us new powers of access and information as citizens and consumers.

So from my perspective, by using the term 'disruption' I am not implying digital is negative, in fact I am a supporter of the opportunities and benefits digital brings to my life. But I am implying that digital is dislodging status quo across the board, so whatever you do, you need to be thinking about it. I’d even argue that it’s beneficial, it may be the stressor that will drive growth and improvement and to stave off the forces of entropy.

Embrace digital, there's no other choice

So, in summing up my case, digital disruption is big, pervasive and strategic. It’s also not necessarily negative, there are opportunities as well as obstacles, it’s a co-evolutionary ecosystem involving customers and companies, citizens and governments. Digital is unavoidable. People want it, they expect it, and increasingly it is our native habitat. Businesses need to embrace it or hope they can survive the swamplands of a new and changing technology-driven landscape.

The delicious irony is that the small and simple “bit” is one of the biggest and most complex things we need to think about!!!

Update: the next post in this series Digital disruption - The nature of the firm and the rise of the unicorns is also published now and may be of interest to readers.

Mark Smith is an Equinox IT Principal Consultant based in our Auckland Office who specialises in digital strategy and IT architecture.

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