Dr. Nikolaus Obwegeser recently talked at a Copperberg webinar called “Digital Value Creation”. These days when everybody talks about the changes in the global economy and (forced) digital transformation, we went back to re-listen to some of the most important lessons on digital disruption from the webinar.
Dr. Obwegeser works at the IMD Cisco global center for digital business transformation. The center is located in Lausanne, Switzerland, and it functions with an aim to provide world-leading research and analysis and prepare executives to take advantage of digital opportunities and manage digital threats.
Although this is a complex task there are a lot of companies that don’t really understand what digital transformation is. Some companies ask if updating their ERP system could be considered as a digital transformation or would it really require a substantial change to the organization. On the other hand, some companies are “jumping from one experiment to another, starting different initiatives from blockchain, AI, machine learning, IoT and following other digital trends without a clear plan”, explains Dr. Obwegeser.
Still, a coherent plan for digital transformation is now needed more than ever judging by the research conducted by Dr. Obwegeser and his colleagues from the IMD Cisco center. They had continuously interviewed senior business leaders, and in addition, they looked at disruption occurring across industries in terms of shifts that occur in the top 10 and the top 20 companies, in order to find out how significant the impact of digital disruption can be. The research, in which more than 5,000 executives from different companies globally took part, showed that more than 1/3 of the incumbents will be displaced. The repetitiveness of the survey showed that over three different periods, from the year 2015 to the year in 2017, and 2019, the shift was impressive. In 2015 many responses were not seeing a major or transformative impact on their business. On the other hand, this year the trend shows an increasing number of companies that are experiencing the transformative impact of digital disruption.
The powerful impact came before the radical disruption due to the coronavirus, that is yet to foster the changes.
However, despite the enormous impact of the coronavirus on the economy these days, this cannot be viewed as the digital disruption:
“We see disruption happening right now but that’s disruption through non-digital effects. For example, the reasons why many small businesses and single-person businesses have to go out of business or have dire financial issues is because they are disrupted due to a policy or government issues or in this case a pandemic. Digital disruption stands for the effect of digital technologies and business models on a company’s current value proposition and its resulting market position. Therefore, we cannot put everything in the bucket of digital disruption even though some executives like to do that. We’ll have to understand that sometimes it’s not digital disruption that we’re facing but it’s classic disruption due to other aspects that have been discussed for many many years and centuries”.
Dr. Obweseger sees the current disruption as “a radical push that nobody expected”. He concludes that there will be numerous negative consequences, but also that we can expect an increase in digital capabilities that can bring new possibilities in the future.