nasscom ilf 2016: attacking the digital disruptor

Attacking the Digital DisruptorsMohan SawhneyMcCormick Foundation Professor of TechnologyKellogg School of Management

1.What?

2.So What?

3.Now What?

3 Questions

Causes of Digital Disruption

Disruptor Strategies and Business Models

Dealing with Digital Disruption

Outline

We are entering a world where people, information, things and infrastructure will be connected via a broadband network, transforming work, life and business.

Connectivity Causes Disruption

The Evolution of Hyperconnectivity

Internet

of

Things

• 100 billion devices

Mobile

Internet

• 10 billion subscribers

Desktop

Internet

• 1 billion users

The Internet of Things is Already Here

Connected Fitness

The seamless connection of equipment, sensors, applications and devices to provide an interactive and personalized experience for consumers and improved efficiency and profitability for facility operators.

Connected Fitness

Wearables in clothingMuscle Effort SensorsBio Sensing Bra

Connected Fitness and Self-Quantification

The world of logging apps and sensor-enabled devices is entering the mainstream, enabling the quantification and the pursuit of well-being for everyone.

The integration of mobile technology, computing devices, and emerging delivery system capabilities into a patient-centered model of care.• Patient-centered personal health

management.• Typically includes a device or

smartphone application.• PHR and EHR integration is possible.• Particularly beneficial for conditions

where continual tracking is warranted, such as Diabetes, Asthma/COPD, Aging in Place, Medication Adherence.

Connected Health

Link glucose meter readings to patient records electronically.

This link ensures that readings are recorded correctly and allows for physicians to passively monitor a patient’s blood glucose.

Pilot studies show that this kind of application is correlated to a reduction of 5 points in blood glucose readings and a 1% reduction in HbA1c readings over a three-month period.

Example: Diabetes Monitoring

But this is just the beginning….

Wearables Smart Cars Smart Homes Smart Cities Vertical Applications

Causes of Digital Disruption

Disruptor Strategies and Business Models

Dealing with Digital Disruption

Outline

Types of Value in Digital Disruption

Economic Value• Price transparency• Usage-based pricing• Reverse auctions• Demand aggregation

Platform Value• Marketplaces• Crowdsourcing• Sharing economy• Peer-to-Peer

Experience Value• Personalization• Convenience• Automation• Immediacy

Digital Disruptor Value Proposition

Digital Distuptor Value Proposition

Choice

Cost

Convenience

Control

Customization

Community

Digital Disruption StrategiesSupply

Disruption

Business Model

Disruption

Channel Disruption

Price Disruption

Experience Disruption

Assessing Vulnerability: The Digital Vortex

Source: Global Center for Digital Business Transformation, IMD

Types of Digital Disruptors1. Disruptive Digital Startups2. Products as Software3. Innovative Incumbents4. Channel Disintermediators

1. Disruptive Entrants: UberQuestions Uber addressed:• Where’s the nearest cab?• How long do I have to wait?• Who is the driver?• What kind of car is it?• How much will it cost?• Do they take credit cards?• How much should I tip?• Can I split the cab fare?• Can I contact the driver?

2. Products as Software: Tesla

• Car as connected appliance• App to control the car• Over the Air software updates• Future-proof Hardware

3. Innovative Incumbents

4. Channel Disintermediators

Causes of Digital Disruption

Disruptor Strategies and Business Models

Dealing with Digital Disruption

Outline

4 Strategies to Deal with Digital Disruption

• Disrupt the Digital Disruptor

• Acquire a Digital Disruptor

• Integrate Digital with Physical• Think Like a Disruptor

Attack Acquire

AbsorbAdapt

Attack digital disruptors by creating a digital disruptor of your own

Leverage your assets and brand to create a model disruptors cannot copy

Compete asymmetrically using a Judo strategy

1. Attack - Disrupt your own business

Attack: HBO Fights Back!

HBO Streaming Service

2. Acquire: Keep Cannibals in the Family

+

Steps in Organizational Integration

Isolate Incubate

Infiltrate Integrate

Create a consistent web, mobile and social media experience

Leverage social media for in-store sales promotions

Link online commerce with retail stores

Design digitally enhanced physical brand experiences

3. Absorb: Integrate Digital with Physical

Designing Hybrid Experiences: Burberry• Brings digital world to life in

a physical space• Customers experience the

brand through immersive multimedia content like they do online

• RFID technology provides audio-visual content on selected items carrying microchips.

• Sales assistants use iPads to keep a log of purchase history and customer preferences.

Leveraging Social Media in the Store

Consistent Digital Experience: Nasty Gal

Digital customer strategies – Provide customers with an omnichannel customer experience, where they can choose how to engage at any time on any device. The channels must be integrated and contextual, with the ability to proactively engage on behalf of the consumer.

Digital enterprise strategies – Evolve the business processes to become a digital customer-first enterprise, with digital customer-facing processes, digital collaboration tools and a digital culture.

Digital operational strategies – Embrace technology that supports digital transformation. This includes an open architecture that allows the enterprise to integrate with third parties that may have different architectures running differently.

Becoming Digital

Question assumptions Embrace agile processes Build marketing into your products Leverage privileged assets Think big, start small, scale fast

4. Adapt: Learn from Digital Disruptors

The Agile Enterprise

Leadership – Change Mgmt.

Adapt or Die

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.

- Charles Darwin

Thank you!