According to an IDC survey from 2016, the top 20 market leaders in any industry will be 'disrupted' by new competitors within five years. Three years on, some are already disappearing. Digital competition is "disrupting" the market and wiping out traditional business approaches by offering new services and models powered using digital technology. Think of the Ubers, Airbnbs and Amazons of this world.
The 'old' business giants have a considerable challenge when it comes to digital transformation. Think of traditional banks. They often have to deal with a lot of legacy, complexity in the backend and offer complicated product like loans and ISAs. In addition, they are used to doing a lot of face-to-face – because those complex products need explanations from their (potential) customers – and therefore still have real estate. Just think how many chains with physical locations have already disappeared from the high street? Blockbuster, once a staple in every town, closed its very last store last August. And how many chains are having a hard time? Dixons Carphone, Carpetright and House of Fraser have all announced possible store closures in the last few months alone.
However, the progressive companies that are weathering the storm understand that digital transformation is a long-term endeavour. These companies want to evolve because they understand that the more digital problems they overcome and transform into new solutions and offerings, the more flexible they can be in response to changes in the market. In addition, these companies can increase their reach, have faster access to suppliers and can explore the possibility of automating processes, thus reducing costs.
Keep on turning
However, the more digital you are –which is thegoal of many digital transformation efforts– the more dependent you are on the underlying technology. After all, new technology and services must run continuously in order to be effective. In the event of a malfunction, digital companies cannot afford to restore from an incomplete backup, made 24 hours ago and which may still take hours to come online. Moreover, all data must be restored as completely as possible. Otherwise, how do you explain to all your customers that you have not delivered on their orders because the data is lost? As such, organisations must be continuously prepared for downtime, regardless of whether it’s planned and unplanned.
In an era when end users expect, and even demand, that business services run 24/7, companies must be able to restore their systems and data within a short period of time. How short? Most companies should be looking to restore systems in a few minutes in order to reduce disruption and customer inconvenience.
Role of social media
Customer experience is a driving force for both digital transformation as a whole, and the move to reduce disruption and downtime. Consumers have always held businesses to high standards – expecting good products, good customer service, and an overall good experience. However, now there is an increasing number of channels where customers can express any grievances, and this can have a direct impact on company reputation. Complaints on social media can directly harm a company’s reputation in front of both existing and potential customers. While there are many effective strategies to manage these types of social media crisis and try to limit the reputation damage, there is no substitute for preventing the catastrophe in the first place. Embracing resilience as part of a digital transformation process is critical to ensuring this
Taking a progressive approach to digital transformation is rapidly becoming imperative in an era of disruption. However, even when organisations have adopted new technologies to thrive in digital times, success comes down to being able to making those systems resilient. Being able to quickly anticipate system failures, prevent them where possible, and recover from them with minimal downtime and data will separate the victors in this age of disruption.