It's now a year later and a lot has happened. Digital Disruption will soon be available as a hardback book (also as an eBook, natch). You can pre-order a copy now at Forr.com/DDbook. To complete the book I had to get far outside of my comfort zone -- I work with media companies and consumer product companies primarily, but to prove that digital disruption is a fundamental change in the way we all do business, I had to interview people in the pharmaceutical industry, the military camouflage industry, and I even recently spoke to the CIO of a cement manufacturer! And to my pleasant surprise, they were every bit as digitally disruptive as their counterparts in the consumer-facing enterprises that we think of when we imagine digital disruption.
One of the main reasons every company can be and eventually must be a digital disruptor is the rise of digital platforms. These platforms are founded on a set of devices, wrapped together with software experiences that identify each customer individually, and are open to app contributions from thousands of partners. The platform owners that matter today are Amazon, Apple, Facebook, Google, and Microsoft.
Earlier this week I caught up with Discover’s Mike Boush to talk about his keynote at the upcoming eBusiness Forum, where he’ll explore innovations in eBusiness at Discover. Here’s a snippet of our conversation, and a sneak peak of Mike’s session at the event:
Q: What digital initiative have you undertaken in the last 12 months that you're most excited about?
A: I love what we're doing with partnerships online. It's creating a whole lot of value for customers and, frankly, getting us out of the "must be built at Discover" mentality. It started with an integration with PayPal in order to deliver peer-to-peer payment services. The program leverages PayPal’s huge delivery platform, and customers love it. Then we introduced an integration with Amazon that lets customers pay for their Amazon.com purchases with the cash they earned through our Cashback Bonus rewards program. This really highlights the difference between competitors' "points" programs and our straightforward cash, and the transparency shows just how great our program is. And recently, Google announced our integration of Discover card enrollment into the Google Wallet from our website, which is convenient for customers and helps position us in the mobile payments space. These integrations are just a sample of what we've done, but they become powerful illustration of what we can do when we team up and innovate with other great companies.
Q: What gets in the way of delivering the right experience to your customers?
I had the chance to catch up with Bert DuMars, VP of Digital Marketing & eCommerce at Newell Rubbermaid, in advance of his keynote later this month at the eBusiness Forum. I spoke with Bert about the impact of digital channels on the overall shopping experience, and how Newell Rubbermaid is charting a course for profitable eCommerce growth. Here are some of his thoughts.
Q: What digital initiative have you undertaken in the past 12 months that you're most excited about?
You have heard the word disruption; you know what that is. And you have heard the word digital. You know what that is, too. But put them together – digital disruption – and they add up to much more than the mere sum of their parts. Digital disruption, when properly understood, should terrify you.
Three sources of digital power – the prevalence of free tools and services that enable disruptors to rapidly build products and services, the rise of digital platforms that are easily exploited by aspiring competitors from all directions, and the burgeoning class of digital consumers ready to accept new services – have combined to unleash a disruptive force that will completely alter every business on the planet. Digital disruption isn’t disruption squared. It’s the disruption of disruption itself.
Most people I meet think they get digital disruption. And a survey of global executives we conducted shows that 89% of executives believe that digital will disrupt their industry. But they don’t realize just how big a deal disruption will be when it finally hits them.
I have been writing and speaking about digital disruption for years – full time for more than a year now – and it still manages to surprise me. In the month of October, I’ll keynote several Forrester Forums and there confess that digital disruption is even more powerful than I thought it was when I wrote the original Disruptor’s Handbook in 2011. What have I learned?
It’s amazing how quickly the world of digital experiences is changing technology, and vice-versa. I’ve covered web content management (WCM) since I joined Forrester in 2006, and that particular market has changed quite in a bit, due in large part to the disruptions caused by digital experiences. These days, many more stakeholders participate in the WCM decision-making process, traditional technology decision-makers can no longer afford to make technology decisions in a silo, and key WCM players are refining and expanding their strategies. I’ll tackle this in more depth with Ron Rogowski next month at our Forum in Orlando but, if you’re a digital experience (DX) decision-maker, you should keep in mind:
· Don’t hold your breath for a true DX suite. Though some of the vendors are promising integrated suites that contain content management, commerce, analytics, optimization, etc., none has best-of-breed offerings in all of these areas. And even if one were available, haven’t you already made too many investments to do yet another rip-and-replace? Some of the vendor strategies remind me of the great promises of the all-encompassing enterprise content management suite (remember how that turned out)?
Digital disruption is forcing business leaders in every industry to rethink their strategy. Music, media, and publishing have been turned upside down. Now, non-digital products and services — from airlines to automobiles — must consider new competitors, new economics, and new customer relationships. For example, game-changing, disruptive mobile experiences and apps on platforms like Amazon.com, Apple, eBay, and Google give those firms control of consumer mobile devices and platforms, allowing them to both "tax" sales and hijack payments as well as threatening to further strangle already-squeezed margins for eBusiness professionals.
Last year Netflix attempted to shift its business strategy to focus mainly on streaming video. Although I wasn’t present in the boardroom discussions, it’s a reasonable bet that Reed Hastings and his team had decided the future was online streaming and that physical discs were a dinosaur. Since the war for content would be fought over streaming, Netflix would focus on adding value to its streaming customers and spin off the disc customers. On the surface this seemed to many a reasonable strategy, especially since Netflix reported that its digital streaming customers and the disc-in-the-mail customers were mostly not one and the same. So Netflix execs crunched the numbers and decided this was the right move for them. Perhaps they had hoped to spin off the disc side of the business to raise some capital. Whatever their thinking, their strategy choices left some gaping unanswered questions for observers like me:
The pace of business change is accelerating. The reason why it is accelerating is the mushrooming of disruptive factors: your customers expecting anytime/everywhere access to you through their mobile devices, competitors leveraging big data technology to rapidly execute on customer-centric value propositions, and new market entrants with lean business models that enable them to outmaneuver your business.
Most companies deal poorly with disruptive change. If they are the “disruptor,” seeking to use these disruptive factors to steal market share, they often run without a plan and only after, for example, a poor mobile app customer experience, realize what they should have changed. If they are the firm being disrupted, the desire for a fast response leads to knee-jerk reactions and a thin veneer of new technology on a fossilized back-office business model.
This is where the value of business architects and business process professionals comes to play: you help your company plan and execute coherent responses to disruptive factors. That’s why your company needs you to attend Forrester’s Business Architecture & Process Forum: Embracing Digital Disruption in London on October 4 and Orlando, FL on October 18–19, 2012.
We’ll start with James McQuivey describing how technology is changing the playing field for disruption in his keynote: The Disruptor’s Handbook: How To Make The Most Of Digital Disruption.
We’ll look at how firms have used technology to rethink their operating models, eliminating low-value activities to focus on what their customers value in Craig Le Clair’s Implementing The Different In The Age Of Digital Disruption.
Every day our clients flood us with inquiries on what to do about mobile and social software and smartphone and tablet adoption—not just as it pertains to their customers but to their employees too. Many firms seem to be scrambling to develop their mobile application strategy, spinning up new teams or working with outside agencies in a rush to introduce their own “killer app” or deploy some mobile capability on their CRM platforms. Smartphones and tablets are just the beginning of an explosion of digital touchpoints we will use to engage with each other, commercial enterprises, and public sector institutions. Gaming platforms, smart TVs, goggles, “magical mirrors”—there’s no end in sight.
Here's a flash of the blindingly obvious: More and more products are going digital. You know this, but what I'm interested in is how they are going digital and to what degree. I see three major aspects: (1) the product itself becomes digital; (2) a physical product adds digital technology; and/or (3) processes and context around a physical product become digitally infused. Let me offer a sort of continuum of examples, and then I want to ask a question:
Music (nearly 100% digital). The greater part of music bought these days is in the form of a 100% digital product.
Health band. With a health band (e.g., Fitbit, Nike FuelBand), I don't really care about the physical product, but I'll put up with it to get the digital benefit: lots of data (and more) about my workouts and health.
Cameras. A digital camera is a physical product that uses a combination of physical and digital technology, and I actually care about some of its physical design (e.g., lenses). It produces a 100% digital artifact (photos), and the process around the photos is digitally infused.
USB picture frame. Part physical, part digital. By replacing the center of a picture frame with a digital screen, I get a new twist on an old standby. But, working with the digital part still requires a high degree of physical manipulation (carry a USB drive to the frame, etc., etc.).
WiFi picture frame. Part physical, even more digital. The WiFi bit bumps it way above a USB picture frame in terms of seamless integration into a digital world. I can email a picture to the thing, or maybe tag a photo on Facebook and suddenly it shows up.