Disrupt or be disrupted
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By 2020, 50 billion devices will be connected to the internet, creating $19 trillion in economic value. Organizations will need to undergo digital transformation to survive in this new digital world. The key is to start small with innovation labs and tiered investments to experiment with new technologies and business models while keeping the core business running smoothly. Only organizations that are willing to disrupt themselves will survive the wave of changes brought by digital transformation.
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Disrupt or be disrupted
- 2. By 2020, 50 billion devices will be connected to the internet, creating $19 trillion of economic value. In this world of digital newcomers toppling traditional giants, it’s time to disrupt or risk being disrupted.
- 3. 1. How do you go digital while keeping the wider business running?
- 4. By 2020, around 75% of organisations worldwide will either be digitised or on their way. To make that transition smoothly, they’ll need to get every part of the business on board with the digital agenda. Jens Meier, CEO and Chairman of the Hamburg Port Authority, did it by using a clever bit of kit.
- 5. We have a huge bridge in the port called Köhlbrand Bridge and there was all this traffic. Trucks were overtaking each other and slowing down the traffic behind them. But when we told people, nobody was interested. So we put in an IT system to put some numbers against what we already knew, and people listened. We were allowed to put in a sign forbidding trucks from overtaking and the traffic jams disappeared Jens Meier, CEO and Chairman of the Hamburg Port Authority. “ “
- 6. Moving into this new world might seem a daunting prospect, but no CIO needs to go it alone. Cisco has a ‘build, buy and partner’ model; we build a lot of technology, but we also buy and partner with other companies, absorbing new skills in the process. Gartner recently referred to this as ‘techquisition’.
- 7. 2. How do you take on more agile challengers?
- 8. We have a three-lane motorway for investments. The inside lane is for big investments: the money we’re putting into the technology that is transforming our entire business model into being an omni-channel retailer. A middle lane for significant projects, which make the most of these investments - like myJohnLewis, releases every 4 weeks on the web and mobile sites, our new Gift Card and so on. And then there’s the fast innovation lane. Last year we ran our second incubator JLAB2015 with five companies and a £100,000 prize. Now we have investments in some very interesting companies including location specialists Localz and connected home company Peeple. We are piloting the first in our stores and aim to sell the door peep hole app from the second. Paul Coby, IT Director for John Lewis “ “
- 9. But innovation can’t exist in a vacuum. If you want to get a return on your fast lane investments, you’ve got to build the right environment. At John Lewis, that environment is Room Y: a room behind the dustbins on the first floor of its London HQ. It’s full of iMacs, laser cutters and 3D printers, and it has a single purpose: fast innovation.
- 10. 3. How do you make the most of data?
- 11. Rebecca Jacoby, SVP of Operations at Cisco, calls data the ‘holy grail of disruption’. The savviest organisations understand that data is their most strategic asset, so they’re more than happy to offer gadgets and software for free. Just ask Facebook (free) and Google (free).
- 12. One small bit of data-driven technology can give a company an insurmountable advantage over its competitors. Take Amazon. Because they know not only what you’ve bought but what you’ve browsed, they can see which products are potentially popular and make sure they’ve got enough stock. It’s a trick their competitors, who use the same sort of supply chain logistics and have the same sort of products, can’t keep up with.
- 13. 4. How do you stay secure in a world of many clouds?
- 14. The final piece of the puzzle is security. Today, 60% of data is stolen in hours but 54% of breaches go undetected for months.
- 15. And despite this everpresent danger, many organisations have been naïve, protecting entire databases with a single username and password. It’s a hacker’s dream and a PR disaster waiting to happen. Traditional security measures just don’t cut it in this brave new digital world. It’s no longer enough to have security systems that wake up when an attack happens and fall asleep the moment the threat’s over.
- 16. Security needs to be pervasive - from the network to the mobile user and from the cloud to every corner of operations – wherever employees are and data is. Done right, security will enable business models like mobility or the cloud. It will also reduce risk by stopping more threats and keep IT teams more productive so organisations stay focused on what they do best. David Goeckeler, SVP of the Cisco Security Business Group. “ “
- 17. Where do we go from here?
- 18. Tomorrow’s digitised world has no respect for the size or age of an organisation. To win, businesses will need to reinvent themselves and find a way to bring their people with them.
- 19. The key is to start small, with innovation labs like John Lewis’ Room Y, and tiered investments like its three-lane motorway. And as IT becomes more and more central, CIOs will need to start asking for help from other innovators like universities, researchers and cities.
- 20. Traditions will die. Leaders will fall. And only the bravest of the disrupters will survive. Take the change seriously, and you’ll be one of the lucky ones.
- 21. Learn more: The next wave of the internet Connected Futures Magazine