Digital transformation may sound like the latest industry buzzword, but it’s a very real phenomenon, and one that is forcing a change in business practices across all industries.

The trouble is, it’s impossible to pin down exactly what defines a ‘digital transformation’ – for one company it could simply be the development of a social media strategy, while for another it might mean a complete operational overhaul and the adoption of new technologies.

There’s one thing that all digital transformations have in common though – disruptive technologies are the catalyst for change.

What is a disruptive technology?

A disruptive technology is a new technology that emerges to unexpectedly displace an established one, to paraphrase Clayton M. Christensen, a Harvard Business School professor.

Arguably the most recent examples of disruptive technologies are social media, mobile and wearable tech, and the internet of things, all of which are becoming an indispensable part of everyday life and changing the way in which we communicate with each other and interact the world around us.

These technologies are also changing our expectations of businesses and the way we relate to them – if we have a problem with a business or service we can now communicate instantly and publicly via social media.

It’s this real-time and very public communication that is causing the disruption – a negative review can do serious damage to a company’s reputation, so it’s in the best interests of most to resolve legitimate complaints quickly and to the satisfaction of the customer.

It does work both ways though, and if any complaints are spurious attempts damage a reputation then social media gives that company an instant right of reply.

The popularity of TripAdvisor’s interactive travel forum and reviews is a great example of how a disruptive technology can work for businesses and customers to shake up an industry.

What can businesses do about disruptive technologies?

When faced with an evolving consumer behaviour rooted in technology, businesses largely have three options open to them; innovate, imitate or ignore.

Any business that chooses to ignore the impact of disruptive technologies is one that’s headed for trouble, and the entire music industry offers a stark example of how dangerous it is to ignore a shift in consumer behaviour.

The music industry currently loses an estimated $12.5 billion a year to piracy, largely due to the fact it initially ignored the impact online streaming would have on the way music is consumed.

Although legal streaming services such as Spotify and Apple Music are helping to claw back some of the revenue, ignoring the change in customer behaviour brought about by online streaming and downloading has been catastrophic.
The rapid advancement of digital technology has undoubtedly accelerated the change in consumer behaviour, and it’s now up to businesses to adapt and compliment these changes – so it’s either a case of ‘innovate’ or ‘imitate’, and that’s where digital transformation comes in.

What is digital transformation?

Every business now deals in digital, and even the smallest of operations will have some sort of digital footprint, be that a website, Facebook page or an appearance in Google’s local listings.

And all marketing activity will some sort of digital element to it – even somethings as simple as including a Facebook page URL on a business card is evidence of a digital marketing strategy, albeit a very rudimentary one.

If there is no longer a point where digital ends and ‘traditional’ channels begin, then businesses can no longer place ‘digital’ in its own silo – digital marketing is now just another part of an overall marketing strategy.

Which means digital transformation is just another part of business transformation – if a business is looking to overhaul its digital offering, it’s invariably embracing a technological disruption and re-focussing at least one part of its proposal.

So for a business to undergo a successful digital transformation, it must embrace and take control of whatever disruptive technologies are affecting its customer behaviour, either through imitation to keep pace, or innovation to really get ahead of the game.

 


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