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Will digital disruption affect your industry or company?

In 2015, digital disruption was not deemed worthy of board-level attention in about 45 percent of companies. In 2019, only 12.4 percent feel that way.

The Digital Vortex 2019 study insights from more than 1,200 business leaders in 58 countries across 14 industries More than one-third of the Top 10 in each industry will be displaced by digital disruption in the next five years The number of firms with a strong digital strategy has jumped from 54 percent in 2017 to 75 percent in 2019

Digital transformation is no longer a choice. Governments, industries, companies, and individuals are all getting swept up in this wave, which not only beckons a change in the way we work but also the culture of work itself. Building customer-centric models, collaborative partnerships, innovation-based investments, data-driven decisions, implementation of AI, mobile and IoT technologies are all part of this digital culture. The time has come for a clear framework of governance, digital strategies and higher levels of accountability.

The recent Digital Vortex 2019 study confirms the widespread belief that more than one-third of the top 10 incumbents in each industry will be displaced by digital disruption in the next five years. It's time for companies to reassess their digital transformation goals and move from ideation to implementation. In retrospect, it's not surprising that companies such as Safeway and DuPont slipped out of the S&P500 to be replaced by Facebook, Amazon, Apple, Netflix, and Google – all of which have strongly embraced digitalization.

This Digital Vortex 2019 study is the third in a series of biennial studies launched in 2015 by the Global Center for Digital Business Transformation (DBT Center), an IMD and Cisco initiative. The opinions of over 1,200 business leaders in 58 countries across 14 industries were collected from January 2017 to March 2019 to better understand attitudes and behaviors towards digital disruption. These opinions were supplemented with data from public sources.

 

Source: Global Center for Digital Business Transformation, 2019

A total of 14 key industries have moved closer to the center of the "vortex", where the velocity and magnitude of change are highest, according to The Digital Vortex 2019 study. The positions of many industries have shifted between 2017 and 2019. 

The study shows that the five industries most vulnerable in the digital transformation drive are: the Media and Entertainment, Telecommunications, Retail, Financial Services, and Technology Products and Services. The Transportation and Logistics industry has experienced the largest jump with regard to its vulnerability, moving from 11th to 7th place.

 

Source: Global Center for Digital Business Transformation, 2019

Close to 88 percent of respondents in the Digital Vortex 2019 survey have stated that digital disruption will have a major or transformative impact on their industries. While the number of companies claiming to have a digital strategy has jumped from 54 percent in 2017 to 75 percent in 2019, the majority acknowledges that it is fragmented; only 22 percent of survey respondents claim to have a coordinated digital strategy. 

The major gap in industry-wide digital transformation uncovered by the survey is the stark perception difference that exists between senior leadership and lower-level managers regarding digital transformation efforts – while 39 percent of C-suite leaders believe they are actively responding to digital disruption, this perception decreases significantly among mid-management levels. This shows a clear lack of a unified vision and a collaborative narrative, which can lead to another gap between ideation and execution efforts. Having all stakeholders, from executive leadership to business partners and employees, on the same page is crucial to develop a foundation on which change can occur 

 

Source: Global Center for Digital Business Transformation, 2019