Digital disruption is happening all over the world and, despite being savvy with new technologies, more than half of Ireland’s businesses are under threat of imminent and major disruption that could finish their businesses, according to a new report.
The report points out that Irish firms are aware of the benefits of digital technologies but are doing very little to use these tools, which could range from e-commerce to storage and cloud, to change how they do things.
The primary sources of disruption are new digital entrants across many sectors, according to the report.
As we have reported, already across the world entire industries have been changed by digital, including transport (Uber), music (Spotify), accommodation (Airbnb), communications (WhatsApp), retail (Alibaba), media (Facebook), finance (Kickstarter), entertainment (Netflix) and software (Apple’s App Store).
‘We estimate that more than 50pc of Ireland’s businesses are under threat of imminent and major disruption’
– KINGRAM RED
Since the year 2000, 52pc of companies in the Fortune 500 have either gone bankrupt, been acquired or ceased to exist, according to the report by Dublin research firm Kingram Red.
“We estimate that more than 50pc of Ireland’s businesses are under threat of imminent and major disruption,” the report’s authors said.
The research results indicate that 70pc of Irish businesses are already experiencing some degree of digital disruption, with another 20pc expecting to be disrupted by digital within the next two years.
Digital disruption begins with planning the customer journey
Examples of firms successfully embracing digital disruption, according to the report, include BMW, which in November launched a new online platform that enabled customers to buy a brand new car in just 10 minutes. China’s Ping An Bank has created a digitally-focused Orange Bank aimed purely at young, digitally literate customers, while Diageo and Thinfilm have shared a prototype Johnny Walker ‘smart bottle’ that uses extremely thin, electronic sensors to tell if the bottle has been opened or not and where it is in the supply chain.
Kingram Red interviewed more than 35 companies in Ireland for this report and found that 95pc of respondents agreed that understanding the customer experience is critically important, yet only 19pc of respondents have completely mapped out the customer journey, with 38pc currently engaged in that process.
10pc don’t see ‘mapping the customer journey’ as a priority right now, while 9pc have been thinking about it but haven’t yet started to do anything about it.
When it comes to prioritising or managing projects in the digital space, 52pc of the respondents said they believe that their process is not – or not yet – fit for purpose. Of the 48pc that were in the ‘agree’ or ‘strongly agree’ category, many of the detailed responses indicated that the process has served the company well to date but raised questions on how fit for purpose the process will be in the future; the gap between theory and practice of this core process was seen as a concern.
“Those organisations that have been in the trenches of disruption will readily point out that mistakes have been made,” the report’s authors said.
“Some big bets haven’t paid off and lots of little bets haven’t paid off. We know from a separate research question that 55pc of respondents believe that user testing wasn’t carried out until too late in project implementation. In brief, this means that certain projects were implemented without sufficient input from the user or customer. It’s no surprise therefore that the desired outcomes sometimes fall short.”
Digital disruption image via Shutterstock