Adapt to digital disruption or die, says Deloitte

Uber yourself before you get Kodaked or, to put in simpler terms, keep pace with the digital revolution in business or you will get left behind.

Speaking at a recent Deloitte Digital Experience event at the financial services firm’s Umhlanga regional office, head of the South African arm of Deloitte Digital and Innovation, Valter Adão, warned Durban business leaders that there was no safe haven when it came to what he described as the rapidly unfolding fourth industrial revolution.

With digital technology becoming more accessible as well as doubling in capability and halving in price, he warned that this was no longer the preserve of big business. Instead, small businesses and even single entrepreneurs posed a growing threat in what was becoming a business world that played by completely different rules.

His starting point was that the inescapable truth was that no business was immune to the threat of digital disruption. Although, every industry would be ultimately challenged and altered, he noted that the retail sector was the most likely to suffer digital disruption first. Already, he said, retailers were experiencing pain as a result of the digital revolution with ultra efficient e retail platforms ramping up to the point where there were recently more on line than store based sales on Black Friday for the first time in world business history.

The next most vulnerable companies were those in the telecommunications and technology sectors followed by financial and then professional services companies.

Saleem Cassim, Director at Deloitte Consulting in Durban, says that in today’s transformational digital business world, the only true certainty is rapid and constant change. “The world has changed fundamentally. You can now do things you would have never thought possible 10 years ago and do business in a way that you would never have imagined. Today, the world’s largest hotel company doesn’t own a single bed and the largest taxi company doesn’t own a single vehicle. This affects all of us. We need to understand what is happening within our respective industries in order to determine what we can do about it. Otherwise, we will get kodaked.”

Kodak, which became synonymous with photography and film products for most of the 20th century and was known for urging consumers to recognise and capture that life changing “Kodak moment”, failed to take its own advice and identify and respond to the rise of digital photography. The company, which was founded in 1888, began to struggle financially during the late 1990’s. A too-late attempt to transition to digital photography failed and, in January 2012, the company filed for bankruptcy protection in New York.

Uber, an American multinational which developed a mobile app which allows consumers with smartphones to submit trip requests to owner driven service providers who are able to transport passengers more cheaply and efficiently than conventional cabs, has threatened to completely unhinge the existing metered taxi industry. Despite repeated attempts to stop it globally, it has become synonymous with inevitable digital disruption.

Sadly, many businesses were not yet prepared to learn from the mistakes of others, said Adão.
Instead, some of the world’s largest corporations were still trying to try and “talk away” disruption, denying the fact that small digital competitors can overturn conventional linear business processes and replace accepted business models.

The end result was chaos and amazement with companies under threat often declaring that they never saw it coming. Many turned to regulatory bodies for protection. “If you are here then it’s probably time to bow out and sell. Regulators cannot protect you. It’s just a matter of time,” he warned.

Adão recommended two take outs from the event – “Firstly, when you see disruption coming, don’t write off a start-up, be curious. Secondly, understand that you can adopt and expand technology to get you on the exponential growth curve.”

He explained that, because digital innovation enabled organisations to re-imagine and transform their businesses, a digital strategy of today was the corporate strategy of tomorrow. A digital strategy was no longer an additional component, but lay at the core of an organisation’s corporate strategy, allowing the organisation to gain competitive advantage in areas such as customer service and growth, whilst at the same time managing issues such as big data and risk management.
For Cassim, the evolution of new technologies that enable companies to leapfrog the way business has been done up until now opens up exciting opportunities. This is especially true for South Africa (and Africa as a whole) where consumers are some of the world’s most connected via smart phones and mobile technology.

“From an innovation perspective, South African companies have a lot to offer, especially when it comes to digital business models that are able to leapfrog traditional life cycles and go straight to the smart phone. South African companies are already at the forefront of digital disruption and are leaders in the space of crypto currencies such as Bitcoin,” he says.

Globally, Deloitte Digital is seen as being at the forefront of understanding and exploiting digital transformation and disruption.

Kennedy Research has named Deloitte Digital a global leader in Digital Customer Strategy & Experience Consulting. In the 2015 Digital Customer Strategy & Experience Consulting report http://www2.deloitte.com/us/en/pages/about-deloitte/articles/deloitte-digital-named-leader-digital-customer-strategy-by-kennedy.html, Deloitte Digital is positioned highest when compared to its competitors and service providers in "Breadth of Consulting Capabilities" on The Kennedy Vanguard™.

Both Adão and Cassim said that the expertise of Deloitte Digital is easily accessible to KwaZulu-Natal businesses wishing to rise to the digital business challenge.

“We take our clients on a journey. We lead them into the digital age through our experienced advisory team, understanding their business, and, most importantly, understanding their customers. The real transformation occurs when our engineering and development teams enable and make their digital strategy a reality. Based on our advanced analytics and customer definition, we’re able to design an intuitive and intelligent interface for every customer touch point,” said Cassim.