The digital vortex: rapid change as the new reality

The digital vortex: rapid change as the new reality

In this guest post, Alison Vincent, Chief Technology Officer UK & Ireland at Cisco Systems, describes the dramatic impact digitisation is about to have on all our lives and businesses.

Technology changes quickly – we all know that – and has a massive effect on our lives. But we are now entering a new era, already heralded by the likes of Uber and WhatsApp, of unprecedented digital change. The speed and scale of that change is set to transform our lives.

Why worry about digitisation?
Recent research by the Global Center for Digital Business Transformation (DBT Center), an IMD and Cisco initiative, predicted that four of the top ten leaders (by market share) in each industry will be displaced as a result of digital disruption in the next five years. And depending on your industry standing, that represents either a significant threat or a huge opportunity for you and your organisation.

At Cisco, we think of a ‘digital vortex’, where businesses move inevitably towards a ‘digital centre’. This means their operations, products and services, and value chains are increasingly digitised.

There are many examples of new, digitally driven, businesses that have come, or are coming, from nowhere to disrupt. But what is really interesting is the growing pace of this disruption. The typical US Fortune had a 20 year journey to a market capitalisation of $20B. With Google (founded in 1998) it was around 8 years, Tesla Motors (2003) 4 years, Uber and WhatsApp (2009) roughly two years, and even less than that for Snapchat (2011) and Occulus Rift (2012).

Why today?
Why is this happening now?

For a start, digital technology is removing barriers to entry, so new entrants can grow fast. In many cases, new players can avoid the investment and regulatory requirements of traditional businesses. They can also cherry pick their offering, and only address the most profitable parts of an industry.

Digitisation is changing the rules of the game, and savvy companies are solving customers’ problems in new ways and reaping the rewards.

The prime examples, the likes of Uber and Airbnb, can seem a little remote to most people’s working lives. But we’re also seeing a new industrial revolution, with more traditional industries digitising their manufacturing operations, and introducing smart automation to capture the value of the Internet of Things. On a practical level this is translating into investment in analysis, connectivity, automation and mobility to drive valuable business outcomes. And we’re seeing smart organisations realising significant (twenty, thirty, forty and more per cent) reductions in downtime, defect rates and energy use, faster introduction of new products and improvements in inventory turn. 

A look ahead
Digitisation will disrupt many areas we can’t even conceive of right now, but some we can already glimpse.

In Japan the Henn-Na Hotel is already open for business and is staffed almost completely by robots. The robot receptionist is supported by a team of mechanised bell-boys that recount the usual information about the hotel’s facilities while taking you and your baggage to your room. And they don’t want tipping!  

Friends have, for years, been decrying ‘manufactured pop acts’ but the ‘virtual pop star’ Hatsune Miku takes things to a whole new level. This holographic star isn’t just for digital consumption; she plays to packed stadiums and recently supported Lady Gaga on a North American tour, and has had a track remixed by Pharrell Williams.

UAVs (Unmanned Aerial Vehicle) or ‘drones’ have, away from warfare, been fairly niche in their use until now, but they are set to become mainstream. Precision agriculture will be a major area of growth. Not just for monitoring livestock but also for monitoring and managing crops.

Disrupt or be disrupted
Organisations face a stark choice: to adapt and adopt, or rapidly become legacy. This means that companies must examine their operations, evaluate why they are successful, and consider what change is needed.

In IT terms, this means taking advantage of the efficiencies, time savings, cost reductions and new ways of doing things that digitisation offers. It means adopting a broad perspective, and part of this involves developing a more flexible, elastic and scalable infrastructure – embracing cloud and making the edge technologies of the Internet of Things accessible to your organisation.

It also means achieving a balance between your business’ existing requirements (for traditional ERP, financial, CRM, email and client/server applications) with new requirements, and utilising ‘cloud mature’ apps that enable you to benefit from Big Data, Analytics and the Internet of Things.

Adopting a culture that welcomes change can make this all happen more smoothly – and younger staff can provide a valuable perspective.

Rapid change is the reality from here onwards. The digital vortex can be any company’s opportunity to make that change work for them and with potentially spectacular results.