Tuesday, 11 September 2012 05:20

The Big Bang – Digital disruption coming your way Featured


One-third of the Australian economy faces imminent and substantial disruption by digital technologies and business models, according to a new report from consultancy Deloitte Australia.

“We call it a ‘short fuse, big bang’ scenario,” says Deloitte Australia CEO Giam Swiegers. “This presents significant threats, as well as opportunities, for both business and government.

“Australia’s business and government leaders do not need to look far into the future to see the new wave of digital disruption headed towards them. It is already here, transforming the way companies and agencies operate and how they engage with their customers.

“With dramatic news of digital-related restructuring among many household names, it’s easy to feel the sky is falling. Even the mighty Microsoft announced in July 2012 the first loss-making quarter in its history as a public company after writing down the value of its online advertising business by US$6.2 billion.”

Swiegers says that digital technology opens up unprecedented possibilities. “These innovations are changing economies and markets, and reinventing relationships between organisations, suppliers and customers. They are also changing society. Whether you’re delivering goods or services online, recruiting new talent via LinkedIn, developing a mobile app or ditching your document retention department, you’re already experiencing the upside of digital technology.”

The reports says that many new digital technologies, such as broadband, smartphones, the cloud, big data and social media, are essentially extensions of the IT advances of the past few decades. “But it is a mistake to see the digital revolution as a function of technology, rather than one of business evolution.

“Digital reduces barriers to entry, blurs category boundaries, and opens doors for a new generation of entrepreneurs and innovators. In turn, incumbent market leaders will face substantial pressures. We refer to changes – both positive and threatening – as digital disruption”.

Swiegers says it was chosen as a neutral term, a simple description of what is happening. “For some, digital disruption will be explosive and immediate – a force that rocks the foundations of their business. For others less vulnerable to digital trends, the changes will be slower and more subtle. For others again, digital innovation will be the cornerstone for future value creation.”

Central to the report is a digital disruption map, A Gartner style quadrant which looks at 18 industries and compares their vulnerability to disruption from two perspectives: the size of the impact (the bang) and the imminence of change (the fuse).

The methodology uses data across 13 factors and 26 indicators that determine the intensity and timing of digital disruption. Deloitte says the sectors that fall within the most pressing short fuse, big bang quadrant comprise about one third of the Australian economy, with those facing an equally big bang, but within a longer time frame, comprising another third.

  • Short fuse, big bang – industries expected to face both significant and imminent digital disruption include finance, retail trade, professional services, and information, media and telecommunications.

  • Long fuse, big bang – industries that can expect significant disruption, but over a longer timeframe, include those where government and large business play a greater role, such as education, health, transport and government services.

  • Long fuse, smaller bang – industries that have lower levels of total digital potential and that can expect to see the least additional disruption compared to the changes of recent years, such as manufacturing and mining.

  • Short fuse, small bang – industries that will not be greatly affected by digital technology, such as accommodation and construction.

The report neatly summarises the many changes technology is causing in business and society. Deloitte does this sort of thing better than its competitors, and it is a timely reminder that organisations and individuals that do not embrace the digital age will be left behind.

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire. He is one of Australia’s longest serving and most experienced IT journalists. He is author of the only definitive history of the Australian IT industry, ‘A Vision Splendid: The History of Australian Computing.’

He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time weekly IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.



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