Completing the Formula for Digital Disruption

The technology industry has continually generated discussion points over the past few decades and continues to do so to the present day.  Consumerisation of IT has brought many technologies from the home to the boardroom, not the least of which have been smartphones and tablets. Not far behind were the cloud based social networks and before we could blink BYOD was the de-facto standard. Now we live and trade in the era of “all-things-digital”. The ultimate threat and opportunity has become the ever present “digital disruption”. Of course, like most things technology – “digital” remains open to interpretation and application fit for purpose. The most commonly used term, in conversations around digital, is “SMAC” – Social, Mobile, Analytics (generally meaning Big Data) and Cloud.

Whilst fundamental, we think that these components alone cannot and should not drive digital strategies and even less so the definition of new business concepts driven by digital – i.e. Digital Disruption.

We believe that there are two critical components to this definition that are missing, but let us confirm our definition of SMAC as a start:

(S)ocial: Traditional communication channels have, in the past few years, been disrupted by the emergence of social business which allows for real-time, transparent, two-way communication between internal and external stakeholders within an organisation. Communication silos have been broken down within various levels of an organisation and amongst the brand and consumer. Social personas have been created to add a human element to the brand. Technology has made it easier for companies to engage on social networks, disrupt the way business is conducted and help us better meet the needs of customers within a specific market. Organisations can be flatter with collaboration replacing beaurocracy.

(M)obile:  Mobile devices have become the de-facto enabler into the digital economy. According to the GSMA’s 2015 Mobile Economy report, the mobile industry has now become the “cornerstone of the global economy”. It is expected that by 2017, a third of all mobile devices in Africa will be smartphones driving a rapid rise in internet usage over the next few years. Mobile money and banking solutions such as M-PESA in Kenya and HomeSend in Nigeria have started a revolution within the banking industry bringing portable financial services to a receptive population, whilst local and international players are scrambling to claim a piece of the action. With a vast installed base of Dumb, Feature and Smart phones and an ever growing network infrastructure, it is no surprise that Africa is dubbed the “mobile continent”. To reach and engage with the African employee or customer, it is mandatory for businesses to be thinking of a ‘Mobile First’ approach to their existing business models, irrespective of the industry or market in which they operate.

(A)nalytics: The proliferation of structured and unstructured (big) data, that is being created by mobile devices, sensorssocial medialoyalty programs and website browsing, is creating new business models built upon customer-generated data. Today, global digital transformation is increasingly relevant across all markets and industries such as healthcare and financial services. According to the Deloitte 2014 Tech Trends Report, “lagging response times can be a matter of life and death.” Analytics can, therefore, help address key challenges such as improving prediction accuracy, providing augmentation and increase the effectiveness and efficiency of delivery. Furthermore, analytics provides a significant way to bridge the gap between the promise of big data and the reality of practical decision makers.

(C)loud: Cloud based solutions and technologies have made it possible for organisations to consider high impact changes to business models, organisation structures and even product design. The ability to rapidly leverage and replicate applications, data and insight across time-zones, countries and companies provides the ideal bearer for any application or solution. Cloud – like mobile – is a default consideration during any solution re-architecting or corporate re-imagining exercise.

Despite the individual excitement caused by each of the components we have just discussed, we believe, that organisations who regard (SMAC) as a complete definition of Digital Disruption would remain challenged in generating material business impact through the application of these technologies alone. In fact, decision makers could be introducing significant business risk to their organisations, including the propensity to accumulate technical debt.

It is our view that Digital Disruption = Cs(SMAC)i

Where:

  • Cs is the pro-active and relevant application of cyber security technologies and practices to all digital solutions
  • i is the application of structured innovation techniques which will create the exponential value from the application of digital technologies.

(C)yber (S)ecurity:  It should come as no surprise that the majority of US CIO’s have picked information and cyber security topics in all or most of their Top 5 priorities for 2015 / 16.  With the constant presence and application of digital technologies, CIOs must go on the offensive when protecting their organisation’s information assets. The evolution of an organisation’s security infrastructure must match the digital disruptions that the organisation is experiencing or planning. It is therefore as important to innovate around securing the corporate information assets the disruption will produce as it is the application of digital technologies.

(I)nnovation: The final differentiator and the source of exponential value to be derived from the application of all five components of digital! All technologies should be led by business need and design. Structured innovation creates an opportunity to manage an ideation process that eventually culminates into proofs-of-concept. When combined with agile delivery models, this becomes a truly powerful tool to both mitigate business risk and enriching the collective understanding of the “art of the possible”.

Whilst individual application of “SMAC” technologies will yield some short term return and possible reduce the extent of EXCO pressure on the CIO, it is our view that tangible and sustainable business value will ensure when “Innovation” leads the application of these technologies and our Cyber Security innovations keep in step with (or ahead of) or Digital Disruption ideas.

To find out how our definition of digital disruption can help you solve your digital challenges; contact Tim Bishop on tibishop@deloitte.co.za  , Coenrad Alberts on calberts@deloitte.co.za  or Kamal Ramsingh on kramsingh@deloitte.co.za.

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Deloitte South Africa

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