In an ever-changing business world, businesses strive to develop strategies to stay relevant in business and equally outshine competitors while maximizing returns. The rate of digitalization has made the saying, ‘the FUTURE is digital untrue because the NOW is digital.’ Digital technology has transformed various aspects of human relations ranging from agriculture, finance, manufacturing, businesses, entertainment, etc. This article will look at what digital disruption is and analyze how it affects businesses with AI (artificial intelligence) and IoT (internet of things) as its primary agents.
Digital Disruption
Digital disruption is the effect which follows a fundamental transformation of industries, market, etc with the introduction of digital capabilities. You could equally say, it is the transformation that is caused by digital technology and business models.
Some examples of digital disruption are listed below:
1. Electronic reading – This has redefined the print and publication industry.
2. Uber – They’ve disrupted traditional operations of taxis.
3. The digital camera – This disrupted the sector of film photography and photo-processing. Film photography Companies such as Kodak are staggering as they didn’t embrace Digital disruption.
AI & IoT Affecting Businesses
With AI and IoT, businesses have taken a new shape. Artificial intelligence can be used to solve problems across the board and can therefore help businesses increase sales, detect fraud, improve customer experience, automate work processes, and provide predictive analysis.
On the same vein, the digital upsurge has allowed businesses to adopt IoT to gain competitive advantage and provide better customer experience. The merger of both AI and IoT makes for a more connected intelligence. AI-Processes real-time data while IoT generates a large amount of data. AI then transforms this data in real-time. The merging of these two results in:
- Predictive Analytics – ‘What will happen?’
- Prescriptive Analytics – ‘What should we do?’
- Adaptive/Continuous Analytics – ‘What are the appropriate actions or decisions? How should the system adapt to the latest changes?’
Accessing The Impact of Digital Disruption on Business & How to Adapt
With previous patterns, you can easily predict that in businesses such as the automobile industry, they will undergo a significant shift as a result of the introduction of AI in the automobile industry in a relatively short expanse of time. With Tesla, Google, and Apple working tirelessly to build driverless vehicles, the transformation of the automobile industry will inadvertently disrupt other sectors, which will have to shift strategy to compete. These include enterprises in the traditional auto production value chain such as car parts production companies, repairs, etc.
Some key elements to consider in adapting while in an ever-changing business environment with digital disruption include:
- Cost Value
- Competing by offering the customer a lower cost or other economic gains.
- Saves time and money by automating and optimizing routine processes and tasks.
- Increase revenue by identifying and maximizing sales opportunities
- Experience Value – Competing by offering the customer a remarkable experience, which is where the role of IoT comes in majorly. The collection of various data from sources and transforming them into meaningful data with AI helps in giving customers a stress-free user experience because needs can easily be predicted. Giving more value experience requires providing the support team with improved tools for monitoring the problems faced by the clients. IoT supports you to address and resolve them efficiently. A merger of IoT with AI in the form of chatbots paves the way into knowing customer needs and therefore how services and products rendered can be improved.
- Platform Value – competing by creating network effects that benefit customers.
These values are not exclusive but rather mutually inclusive. They all work hand in hand to give excellent value.
Digital disruption marks a change in consumer needs
Conclusively, digital disruption marks a change in consumer needs and understanding; this makes it easier to understand these needs and to fulfill them while making customers happy. Digital disruption is fine when you are not taken unaware, however, on the reverse, it could mean a fight for mere survival, just as in the case of Kodak.