Digital Transformation How Digital Disruption Is Redefining Industries
New Study from the Global Center for Digital Business Transformation shows that only 25 percent of companies are taking proactive steps to address digital disruption.
The effect of digital disruption on business has the potential to overturn incumbents and reshape markets faster, according to a new report released by the Global Center for Digital Business Transformation (DBT Center), an initiative between Cisco and the International Institute of Management Development in Lausanne, Switzerland.
The report, entitled "Digital Vortex: How Digital Disruption is Redefining Industries", is the first from the DBT Center. The report investigated the state of digital disruption and the outlook for industries through a survey of 941 business leaders in 12 industries and 13 countries including Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russia, United Kingdom, and the United States.
The results of the study show that digital disruption will displace approximately 40 percent of incumbent companies in each of the 12 industries studied for the report within the next five years. Despite digital disruption's potential to overturn incumbents and reshape markets, the survey indicated 45 percent of companies do not believe digital disruption merits board-level attention.
"Every country, every city and every business will be required to become digital in order to thrive and survive in the new digital economy," said Martin McPhee, senior vice president, Cisco Consulting Services. "The Global Center for Digital Business Transformation, which brings together digital disruption and education, will serve as a platform for executives to be educated on the why, what and how required for their digitization journey and the ultimate sustainability of their organizations."
Most executives surveyed see digitization as a positive for business and society. In fact, 75 percent of executives surveyed believe that digital disruption is a form of progress, 72 percent said it improves value to customers and 66 percent feel it empowers individuals. At the same time, 43 percent either do not acknowledge the risk of digital disruption, or have not addressed it sufficiently. Only 25 percent describe their approach to digital disruption as proactive.
Among the 12 industries highlighted in the report, Technology Products & Services has the highest potential for disruption over the next five years. However, the report also shows data-driven industries in general top the disruption potential list, including Media & Entertainment, Telecommunications, Financial Services and Retail. According to the report, these are industries that rely on technology-enabled networks to exchange digital value, including data and transactions.