The pace of digital disruption will stay the same and/or accelerate over the next five years, said Bain recently.
According to a Bain survey of 1,400 business leaders across 14 countries, 70% of respondents indicate they are experiencing “significant digital disruption” while 85% of them believe the pace of digital disruption will either maintain or accelerate over the next five years.
Survey highlights
- Nearly 80% of companies that are considered as “digital disrupters” gained market share over the last two years.
- Digital disrupters put “digital” at the very top of their agendas, yet even they are having to adapt to a fresh wave of emerging technologies that are enabling new competitors and business models.
- The astonishing out performance of tech stocks may have eased, but don’t expect a corresponding slowdown in the pace of digital disruption, said James Anderson, partner in Bain’s London office and leader in Bain’s Vector capability.
“In fact, we are seeing a fresh wave of disruption today driven by new business models and emerging technologies such as deep-learning artificial intelligence, Metaverse, Web3, advanced robotics, and connected devices supported by edge computing and 5G networks,” he noted.
Disrupters stand Out
According to Bain, disrupters believe we are living through a profound shift in how business operates.
When compared to what is known as “digital chasers,” disrupters are twice as likely to say that digital technologies will radically alter their sector, the firm added.
Bain said it found that disrupters have the following characteristics.
Talent magnets. Disrupters are eight times more likely than late digital adopters to attract and retain the right people, with the right skills, in the right roles.
Innovative. Nearly two-thirds of disrupters are building “Engine 2” digital businesses outside their core as a response to both opportunity and disruption; another source of resilience and growth.
Attentive to ESG progress. Most disrupters view ESG initiatives as being intertwined with their digital activity; about 60% consider ESG a primary criterion in the prioritization of their digital initiatives, and about 90% clearly track the role of digital initiatives in ESG progress.
Six key digital transformation challenges
In addition, although 97% of the executives Bain surveyed indicated that digital transformation is a priority, fewer than 20% of them believe that their company has achieved more than 80% of their digital transformation goals.
Bain said companies need to focus on the following six priority areas.
Commit to the cause. More than 80% of early-stage transformers said their top-level commitment to change hadn’t yet cascaded through the ranks or been fully codified into compensation and career management.
Refactor tech architecture. Accelerate the shift to cloud technologies and invest in a modular and flexible enterprise technology stack.
Extract full value from data. Embed repeatable processes for scaling advanced analytics; deploy artificial intelligence (AI) and machine learning at scale.
Make Agile the norm. Ditch siloed operating models and ensure that Agile and other new ways of working extend beyond the IT department.
Ignite innovation. Rekindle a risk-taking culture; only 1 in 10 early-stage transformers currently feel they have the risk-taking culture (and effective risk management) that is commonplace at disrupters.
Become a talent magnet. Invest more in employee training, give employees room to pursue experimental side projects and search internally for “digital dreamers”.
