July 11, 2019
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Ride the 4 Waves of Digital Disruption
Contributor: Katie Costello
The rapid succession of digital disruptions calls for CIOs to create an organization that can rapidly adapt to new technologies and support the new business models they enable.
Dave, a longtime CIO at a large corporation, finds himself drowning in a sea of new technology developments. He is used to the old way of doing things, where a new technology advancement would come out every few years. As a result, Dave has grown comfortable waiting for the early adopters to figure things out first, then following.
“ The wait-and-see approach will no longer work for CIOs”
“The wait-and-see approach will no longer work for CIOs,” says Leigh McMullen, Distinguished VP Analyst at Gartner. “Digital business will hit the enterprise in four rapid waves, forcing organizations to learn to surf and adapt the new technologies that support new business models.”
McMullen explains the four waves of disruption and how organizations can stay afloat.
Read more: Act Now to Fund Innovation and Growth
The enterprise flips from cost to growth
Organizations are increasingly shifting from an emphasis on cost cutting, to a search for revenue and profit growth. More than twice as many CEOs say they want to build in-house technology capabilities to create business value than want to outsource IT work, according to Gartner’s 2019 CEO Survey.
“In growth mode, the enterprise must differentiate itself, but in digital business, the enterprise must use technology to do so,” says McMullen.
Recommendation: Redesign the IT operating model to support digital business, to transform talent, ways of working and other long-established elements of the IT organization.
Digital disruptions sows chaos market by market
Digital disruption has not yet reached its peak. It hits different markets in different ways and at different times. For example, heavily regulated industries like healthcare and banking continue to resist full digitalization, whereas streaming media overhauled the music industry entirely.
Recommendation: CIOs across different industries have a few options to respond to forthcoming digital disruptions, but should always assess the areas of the business that can benefit from digital technology and create new value for customers.
Read more: Digital Disruption Myths
The platform business model gets disturbed
Today a digital platform supports many digital businesses — the enterprise’s own and those of its ecosystem partners. For instance, there is more computing power sitting idle on employees’ desks and the device in their pockets than there is in all the world’s data centers.
Recommendation: To support the organization’s main business model, platform or otherwise, explore a distributed cloud architecture that combines cloud and edge computing. Distributed cloud offerings support the Internet of Things (IoT), but will also benefit mobile and desktop environments.
Artificial intelligence, IoT and blockchain create a perfect storm
Blockchain’s ability to support peer-to-peer microtransactions — combined with the intelligent decision-making ability of artificial intelligence (AI) and the sensory powers of IoT — will create never-before-possible businesses. AI applications including chatbots and virtual personal assistants are already being widely adopted across enterprises, and blockchain technologies are continuing to rapidly mature.
Read more: The Reality of Blockchain
Recommendation: Educate senior business leaders about AI, IoT and blockchain so they can understand the implications of these technologies and reorient middle management to cultivating talent around them.
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Recommended resources for Gartner clients*:
Learn to Surf 4 Waves of Digital Disruption by Leigh McMullen et al
*Note that some documents may not be available to all Gartner clients.