Digital Disruption and Its Implications on IT Strategy - Assignment Example

Digital disruption and its implications on IT strategy University Student Id Course Date Table of Contents Introduction 3 Critical analysis 4 Examples of digital disruption 5 Taxi market 5 Automobile industry 6 Implications of digital disruption on IT strategy 7 Disruptive innovations improve innovation of the IT strategy 8 Disruptive innovations increase focus on the needs of the customers 8 Disruptive innovations can make IT strategies irrelevant 8 Discussions 9 Issues faced by business due to digital disruption 9 Challenges 11 Conclusion 12 References 13 Introduction Digital disruption is referred to as changes in digital technologies occurring at a pace that causes disruption in the established value creation ways, social interactions, our thinking generally, and ways of doing business. It can also refer to the new digital technological changes which occur and new versions of business models which usually affect the value proposition of the various existing goods and services too. On the other hand, IT strategy is the main component that is established to create a very competitive advantage over all sorts of competition (Thomond and Lettice, 2002). The IT policy creates the difference between the success of a business and the failure of business. Any company which makes use of IT strategy runs its activities smoothly and therefore ends up being successful whereas any business that operates its operations without involving digital technologies may end up failing. Rapid increase in personal and work uses of mobile devices have led to an increment of digital disruption potential across many industries (Schmidt and Cohen, 2010). These have also caused disruption of media and entertainment industries on changes concerning how customers access the content being communicated by advertisers. Digital disruption can be viewed as an opportunity for many business where the resulting innovation can be used to make the company products competitive in the market. It has been said to cause high inequality risks and dislocates labor and capital, as many organizations are becoming capital intensive. The essay is trying to explore the implications of the digital disruption on the information technology strategy (Hang, Chen and Subramian, 2010). This entails critical analysis of the literature that is relevant to the digital disruption and IT strategy. The possible challenges that are likely to be faced by businesses due to the digital disruption are explored and conclusion relating to the effects of digital disruption on IT strategy provided. Critical analysis Digital disruptions do occur in different levels that can include disruptions concerning individual life. For instance, mobile connectivity can be taken to disrupt work-life boundaries that are established. Second, the digital disruptions can be regarding the work practices that can involve narrating work using microblogging in organization leading to change in the valuable work that counts in the organization (Christensen and Overdorf, 2000). Third, digital disruptions to the practices of businesses where the change in technology van result in social media use in the workplace disrupting the way information is transfer in the company leading to changes in power relationships. The disruption can also take place in the structure of industry where the digitalization of processes can disrupt production process, delivery, and value chains. Lastly, disruptions can be to the social systems where the increased use of the social media can cause disruptions to the traditional practices. Digital disruptions can be associated with the efforts that are geared towards realizing efficiency in operations. The advancements in technology have been contributing a lot in the digital disruptions as organizations are using the technologies to enhance their performance and realize efficiency (Klenner, Hüsig and Dowling, 2013). Many organizations are working toward achieving competitive advantages in eth market by coming up with innovative strategies that can make their products competitive. As a result, the companies operating in competitive market are using technology leading to disruption in the way of operations. For instance, organizations that are working towards achieving cost advantages tend to use technology in achieving efficiency. There have been increased innovations as organizations and individuals are looking for ways that can ensure that solutions to various problems are provided in a better way. This has led to technology innovations where the changes in technology are used to enhance the efficiency. For instance, organizations are now using technology innovations to offer services that can ensure that the customers are satisfied (Iordanova and Cunningham, 2012). The service delivery is said to be enhanced through innovations in technology where innovative features created do change the existing system in the service delivery process hence causing disruptions. The increased competition in different market is resulting in increased innovative technologies where organizations are in competition to acquire the larger market share in the industry. Examples of digital disruption Taxi market Innovative technologies have led to disruptive of the normal operations of businesses as the normal practices employed in the process of offering services in the market are altered. That can be considered as disruptive technology. For instance, Uber has brought transformation in the taxi sector as it has launched innovative services in the market. The Uber Company is using technology to make service delivery more effective and efficient. This has been a way of ensuring that the customers can be in a position to experience services that can meet the needs. The customers are now able to access the Uber services any time using their smartphones making the Uber services reliable and effective. Besides, the transactions are made easy as the payments are done using electronic means leading to increasing security (McQuivey, 2013). As a result, the Uber companies are becoming very competitive in the market. The competitive of the Uber Company can be associated with the improvement in the service delivery, as the services are considered convenient and of high quality. This is because the Uber Company is working towards ensuring that the customers are satisfied hence ensuring that service delivery is of high quality. Besides, the customers are provided with platform where they can give their reviews concerning their experience hence ensuring that the services offered are of high quality is essential to ensure positive reviews (Hang, Chen, and Subramian, 2010). The launch of Uber in the taxi market has disrupted the way the operations have been done in the industry hen that is an example of a digital disruption. Automobile industry In the automobile industry, digital disruption has been experienced in the operations in the industry in the process of working towards offering products that are competitive. The digital disruption has resulted as the players in the industry are becoming very innovative in offering services and products to the consumers. For instance, Tesla Company has transformed the industry by designing electric engines. The Tesla Company has been looking for making its products unique in the market aiming at meeting the needs of the customers in a better way than the rivals. The electric engines are considered environmental friendly, as the engines do not use fuel but electricity hence eliminating the air pollution associated with the use of fossil fuels. Besides, the use of electric engines has been associated with some advantages to the consumers (Garrety, et al. 2014). Some of these advantages can include low maintenance costs, as they do not use fuel but engines driven by electricity. The electric engines designed by Tesla Company have met the needs of the consumers in the market where customers have been looking for cheap but high-quality products. As a result, the traditional automobiles have been losing competition in the industry as Tesla cars are meeting the needs of the customers better. Therefore, the technology adopted by Tesla motors can be considered as a digital disruption in the automobile industry as electric cars can meet the customer’s needs better hence challenging the traditional cars. Implications of digital disruption on IT strategy Digital disruption has been affecting the IT strategy due to technological change that has been taking place. Many organizations are continuously changing their IT strategy to suit the changes in technology and achieve competitive advantages in the industry. The digital disruption in many organizations can be associated with the changes in IT strategies to achieve set objectives. Besides, the digital disruption in organizations can be linked to the response of the organizations to changes the market like an increase in competition (Cunningham and Silver, 2012). For instance, an organization can come up with new ways of offering certain services to the customers aiming at making its service delivery process unique hence competitive. Technology is dynamic and is expected to keep changing leading to changes in the IT strategies as organizations are changing their strategies to adopt the technological changes in their operations. Failing to change the IT strategy with the changes in technology can result in irrelevance in the industry leading to loss of market share. As a result, digital disruption is likely to cause some significant changes in the IT strategy of any organization in the process of responding to the changes in technology. Some of the Implications of digital disruption on IT strategy can include increased focus on the needs of the customers, increased innovation, and irrelevance of the IT strategies that do not keep pace with the technological advancements. Disruptive innovations improve innovation of the IT strategy The IT strategies adopted by organizations are becoming very innovative as they are challenged by the disruptive innovations. Many organizations are now working towards ensuring that their IT strategies are in a position to make sure that they achieve some competitive advantages in the market (Thomond and Lettice, 2002). As a result, the organizations are changing their strategies to make sure that they competitive in the industry as they strive to make their organizations competitive by making use of the technological advancements. The increased innovations are geared towards ensuring that the needs of the customers are met in a more effective and efficient way. Disruptive innovations increase focus on the needs of the customers The IT strategies are now becoming highly focused on the needs of the customers due to the increased disruptive innovations. Disruptive innovations have been associated with the increase in focus on the needs of the customers as organizations are looking for the best ways of making their products and services competitive by making use of technology (Thomond and Lettice, 2002). The increase in innovations is leading to increase in unique features that make the products competitive in the market. As a result, the IT strategies that are adopted by organizations do ensure that they offer market solutions by being innovative to meet the expectations of the customers. Disruptive innovations can make IT strategies irrelevant The IT strategies that are failing to adopt the technological advancements are likely to become irrelevant in the industry. The technology has been changing rapidly leading to the disruptive innovations that have been on the front line to guarantee quality and excellent service encounter. The disruptive innovations are then leading to better ways of solving industry problems related to meeting the needs of the consumers (Klenner, Hüsig and Dowling, 2013). The organizations that are not keeping pace with the changes are likely to become irrelevant in the market as they offer products that cannot meet the expectations of the customers. Discussions Issues faced by business due to digital disruption Digital technologies do offer new opportunities by creating innovative business models therefore ensuring competition of entrepreneurs with established practices of the business that covers a wide range of industries. This opportunities encourage productivity growth and improves living standards of entrepreneurs (Garrety, et al. 2014). The pro-productivity policies in consideration with digital and non-digital opportunities contributes exploration task on potential impacts and digital technology challenges for workers and society, markets and competition and governments operation ways. There is a rapid increase in the use of devices which are mobile to carry out certain activities and also for personal utilization. This use of IT has raised the potential for digital disruption in several industries. A good example is a way Netflix, Amazon, and others have substantially interfered with the media services by creating change on how the services can get accessed by clients and monetize by the advertisers. In nowadays, broadcasting networks must use the multi-channels approach to monetizing their entertainment products. However, this term digital disruption is sometimes misused by numerous business people in describing their products which involve digital technology to compete effectively against other marketplace peers. Digital disruption is sometimes confused by some individuals with the term disruptive technology. This term is always used by people to describe how the new technology has displaced the established technology (Thomond and Lettice, 2002). Besides this term “disruption” is a more unfortunate word to be used to illustrate this phenomenon and therefore it would be better to use the word “transformation." Digital disruption is very common nowadays due to the advancement of social media in the places of work. Importantly, both individuals and businesses should always identify the only useful changes and therefore implement the necessary measures to take control of its effects. When technology advances occurred, disrupts the established ways of doing business and social interactions too. However, change cannot be avoided and thus it will automatically happen therefore people who accept the changes must learn discernment to benefit from the current technology entirely. Individuals who always accept changes in their daily businesses end up succeeding in their activities. As business people, we should not fear any change or be much excited by the new technologies emerging (Hansen and Bozic, 2009). Companies should use the information technology strategy to focus on the new technologies and also conduct the people who manage the technologies to confront the digital disruptions which may affect their activities. Other technology strategies focus on the efficiency of company`s use of technology. For instance, employees in a company make use of technology in ways which bring value to the enterprise. The information technology strategy has expressed how technology should get utilized in an organization`s corporate strategy. There is a need to implement IT strategy to recover the country`s competitive edge (Christensen and Overdorf, 2000). The IT world is becoming dynamic, and this brings advances in the storage of data and processing the data. Establishing an IT strategy plan for business makes the enterprise get prepared for any future changes that may unexpectedly arise due to digital disruptions, and therefore the approach will help to come up with new methods of working. The IT strategy contributes to modernize businesses so as to meet the new demands of customers. Challenges There are also challenges which usually affect businesses as a result of digital disruptions. This includes; robots being used to replace human labor which results in unemployment cases since robots now replace the individuals who have to provide a workforce to the companies. The technological change has made it easy to introduce robots which are more efficient than employees because they do not fatigue (Klenner, Hüsig and Dowling, 2013). IT strategies are quite costly and therefore many businesses do not have enough monetary funds to implement the necessary equipment for IT strategies. This can lead to a business becoming closed due to additional operational costs. Within the next few years to come, many global enterprises will have to place the digital transformation as their corporate strategies in their businesses. The digital marketing strategies will put all activities in business IT investments. Digital transformation requires employees who are computer literate and therefore the workers usually demand higher salaries in the markets places. This makes business expenses to rise rapidly since many companies have been using cheap labor from illiterate people. Also, employees require getting trained about the new technologies on how to handle sophisticated equipment. Companies also need to all their members of the board to ensure that they do not deal with people from a pre-digital era (Thomond and Lettice, 2002). All leaders in businesses usually face uncertain future but they transform their businesses by analyzing their activities and strategic capabilities, hence end up positioning their companies to evade any disruptions which may arise in future. Conclusion Disruptive innovations have transformed the way of doing business where the operations businesses are improved to meet the market demands in a better way. Increased competition in the market and the desire to achieve competitive advantages has been behind the increased innovations in the business operations. For instance, Robo-advertising techniques have been adopted where these technologies have positively influenced the current business. It aids in the balancing of the business portfolio as well reducing the risks rate. The improvement in technology has led to the utilization of touch less capital in conducting the entire transactions. Also, the innovation among people has contributed significantly to this trend (Christensen and Overdorf, 2000). Thus, many people are shifting from the face to face sales to the use of mobile and master cards. These technological devices reduce substantially the losses as well rates that can get incurred amid general transactions. Hyper-transparency is also among the emerging trends in the digital disruption. Many companies brand their product for the purpose of creating better quality. However, with the technology, many customers will go for the products they obtain relevant information from the web. Due to this, the current companies are deploying the online product promotion techniques which result in the realization of many clients (Hansen and Bozic, 2009). Therefore, a better advertisement will build the companies’ reputation thus the business will realize huge profits. References Christensen, C.M. and Overdorf, M., 2000. Meeting the challenge of disruptive change. Harvard business review, 78(2), pp.66-77. Cunningham, S.D. and Silver, J., 2012. On-line film distribution: Its history and global complexion. Digital Disruption: Cinema Moves Online, pp.33-66. Garrety, K., McLoughlin, I., Wilson, R., Zelle, G. and Martin, M., 2014. National electronic health records and the digital disruption of moral orders.Social Science & Medicine, 101, pp.70-77. Hang, C.C., Chen, J. and Subramian, A.M., 2010. Developing disruptive products for emerging economies: Lessons from Asian cases. Research-Technology Management, 53(4), pp.21-26. Hansen, E. and Bozic, K.J., 2009. The impact of disruptive innovations in orthopaedics. Clinical Orthopaedics and Related Research®, 467(10), pp.2512-2520. Iordanova, D. and Cunningham, S., 2012. Digital disruption: Cinema moves on-line. St Andrews film studies. Klenner, P., Hüsig, S. and Dowling, M., 2013. Ex-ante evaluation of disruptive susceptibility in established value networks—When are markets ready for disruptive innovations?. Research Policy, 42(4), pp.914-927. McQuivey, J., 2013. Digital disruption: Unleashing the next wave of innovation. Schmidt, E. and Cohen, J., 2010. Digital Disruption-Connectivity and the Diffusion of Power, The. Foreign Aff., 89, p.75. Thomond, P. and Lettice, F., 2002, July. Disruptive innovation explored. InConcurrent Engineering Conference Proceedings (No. 7). http://sloanreview.mit.edu/article/how-useful-is-the-theory-of-disruptive-innovation/ http://searchcio.techtarget.com/definition/digital-disruption Read More