Multinational management consulting firm McKinsey & Company has recently made the statement that in order to cope with the challenge of digital disruption, companies need to reinvent their core business model. What does this advice mean and what steps can IT professionals take to stay on top of this wave of change?
According to the research, the effects of digitisation have only begun to become clear in many industries, meaning that there is still major disruption to come. Businesses need to be ready to adapt to this disruption and find new revenue sources because, the current digital shift rewards change and punishes status quo.
So what does this mean? Making the odd adjustment to your business model here and there won’t be enough – you need to be open to completely rethinking your business models. Australian companies are, by and large, facing the same challenges caused by digital disruption as those overseas, and the solutions used there are applicable here too. Andrew Rowsell-Jones writes for CIO that companies wanting to realign themselves to deal with a digital shift in their industry should follow three basic steps:
1. Investigate threats and opportunities – Do your research. Where is your market heading, and what new technological or social developments are likely to redirect it? What are your competitors doing, and is it effective? What can you do better?
2. Understand the results – Set aside the time and resources to properly get a handle on the situation. This is where IT professionals have an advantage over other business members, as our understanding of digital technology and how it affects our industry goes deeper than most.
3. Take action – It’s all very well identifying what the opportunities and risks are for your business, but it doesn’t count for much unless you do something about it. Once you’ve made your analysis, you need to take steps to avoid the threats or capitalise on the opportunity. It might mean that you have to move quickly – the nature of the disrupted digital landscape is that little remains static for very long.