Navigating digital disruptions



In case neither you nor your organization is yet convinced – digital disruption is real and is set to change the way you do business. In fact, your response to it would determine the success or survival of your business.

The wave of technological advancements in data analytics, intelligent automation, Internet of Things, and other emerging platforms consolidating all these technologies has ushered in the digital revolution. It is set to disrupt even the most resilient and established businesses.

It is then no surprise that most forward-looking business leaders have come to the conclusion that their current
business and operating model would need to change. However, some organizations are still in denial and refuse to take action. Some are even honest enough to acknowledge that they’re not capable of tackling these disruptors and are ill equipped to recommend directions to take.

In the corporate world, disruption is generally defined as a shift in profitability or growth from one business model to another. Normally, an incumbent industry leader is used to doing something that has taken it to the no. 1 spot. Eventually, though, it starts losing its market share to a challenger or a new company that has discovered a new and agile operating model, which is supported by advanced technology (e.g. software or application). Most of the time, such technology is the catalyst that ignites new ideas and ways of doing things at a much more streamlined approach. This simply means that the new challenger is able to offer similar or superior products or services at a much lower price point.

If you still don’t believe that digital disruption is taking place, consider what has happened to industries that are not reliant on brick-and-mortar stores such as telecoms, media and entertainment. They all have to rethink their business models, looking for new revenue streams through other channels, such as social media and unconventional ways of engaging with customers. Similarly, manufacturing companies are embedding logistics systems with sensors, integrating their supply chain through analytics and robotics, and altering the old ways on how products are packaged and delivered to end-consumers.

With these digital disruptions, shareholders, employees and customers now expect top-shelf response from business leaders. To help you and your organization embrace these new norms, below are some principles and lessons that will come in handy in navigating the ever-changing world of digital disruptions:

1) Accept that each digital-centric competitor is someone you can learn from.

If a venture capital-funded new entrant in your market is disrupting your existing customer service approach, it is a sign that your business model is becoming obsolete or irrelevant. You must immediately figure out why and how you can change it – disrupt your own thinking by discovering what digital technology can do for your business. Nowadays, if your business, operating model and underlying processes are in existence for the last decade or so, it’s time for a change.

2) Put customer experience at the center of your digital strategy.

If you could paint the future needs of your customers, how would you go about it? Is it about anticipating their needs so that they would want greater interaction with your products and services? As Steve Jobs once told his biographer, “It is to figure out what they’re (customers) going to want before they do.” Such would require imagination and an obsessive focus on customers. While easier said than done, simply focusing on solving customers’ basic problems, easing the day-to-day frictions in their lives, and making things easier and less complex – all these while reducing the price they have to pay – is a good starting point.

3) Don’t try to control or build everything.

We have observed that disruptive new challengers don’t do everything themselves. They rely on the available capabilities of other organizations, and even their competitors at times. B2B platforms such as Amazon Web Services and Google Cloud have enabled enterprises to break free from constraints brought about by the huge investments in building a digital-enabled supply chain. In addition, it has allowed organizations to unlock value from its assets at a much greater scale but at a more reasonable cost. However, it is important to consider that once you are in one of these platforms, there are substantial switching costs if you decide to change to another platform. Nevertheless, it’s just too good to know that you can now use others’ technologies and solutions to your own advantage.

4) Being regulated may mean ripeness for disruption.

When you decide to launch disruptive products or services through digital means, you will likely need to circumvent existing laws and regulations one way or another. Take for example the case of ride-hailing platforms Grab and Uber. In most countries, regulating taxi franchises has led to artificial scarcities of taxis, to the dismay and inconvenience of the riding public. The situation has resulted in the proliferation of digitally powered ride-hailing companies relying heavily on apps that were built with the riders’ comfort in mind. Aligning the operating model of your disruptive business with the intent of existing regulations and laws will help you reach your goals.
5) Combine business acumen, customer/user experience, and technological skills in conceptualizing and designing disruptive products and services.

Historically, business executives believe that it’s very difficult to harmonize the business, customer experience, and technology functions of their organizations because each operates in well-defined silos, having distinct capabilities, priorities and attitudes.

For example, in some companies, setting business priorities is within the purview of C-suites, which may have limited appreciation of the benefits of adopting digital technology. On the other hand, customer experience is most likely under the domain of marketing specialists who may lack the acumen to understand strategic points of view and business impact. IT, typically assigned to just develop or source apps or platforms, may overlook the importance of simplicity and convenience sought by customers and employees.

Generally, the C-suite, marketing, and IT people work separately and almost always do not work seamlessly as a group. If you think you can’t get these people to work together constructively, try harder and the rewards will be unimaginable. Surely they will appreciate each other’s value over time as their company strives to become a digitally driven organization.

While digital disruption may seem like a threat, in reality, it can truly be an opportunity to exploit for most organizations. The prospects to rethink your business have never been so great. And whether your business has been around for 50 years or five months, the challenges in the game of digital disruption will be the same – that is, to come up with a leaner and more agile business model, with a unique value proposition that’s customer-centric.

Roberto C. Bassig is a consulting partner, and Risk and Quality Advisory partner, of PricewaterhouseCoopers Consulting Services Philippines Co. Ltd., a member firm of the PwC network. For more information, please email This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.


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