Digital Disruption Denmark – a digital paradox?

Digital Disruption

Published 28. January 2015, by Accenture Denmark

Digital Disruption Denmark – a digital paradox?

What does digitalisation mean for businesses in Denmark? To what extent do they see it as a threat or as an opportunity? How well prepared are they for the disruption – already evident in several sectors – to their own businesses?

A recent Accenture survey of senior Danish executives set out to answer these questions. And what emerged from our analysis was something of a paradox. While Danish businesses believe that digital will create major changes within their industry over the next five years, they don’t see those changes as having an impact on their own mix of products and services over the same period. So what’s going on? The results of our survey point to some confusion or misunderstanding about what digital means and its fundamental impacts.

Being digital is about more than acquiring new capabilities or technologies to make work easier, faster and more cost effective. Digital is changing not just business processes, but the whole way that a company, and even an industry, operates. GE, for example, is moving its traditional emphasis on manufacturing to a future built on providing a service, for example by harnessing the data from the aircraft in which its engines are installed. Or Michelin, that instead of just selling tyres now provides a data-driven service to fleet operators to maximise the cost effectiveness of their trucks.

These businesses are completely restructuring their business models around digital. It’s not, yet, something that most Danish businesses are prepared for. Most see digital as incremental, rather than transformational. But the scale and speed of ‘big bang’ disruption that digital brings, mean that simply using digital to improve existing processes won’t offer any protection when – not if– disruption takes hold.

Because digital disruption is unlike any preceding types of innovation and defies conventional strategic wisdom, Danish businesses need to take steps to prepare for it now. Drawing on our experience Accenture believes that there are three key areas of activity –understand, identify and execute – that all Danish business can usefully explore. First, senior management needs to understand the impacts that digitalisation could have on the company’s business and operating models and identify a member of senior management to push the digital mindset, making sure its linked to the most important areas of the business. Technology-focused trendspotting should also be integrated into the strategy update cycle, linking the implications of future technologies to key areas of the business.

Next, identify and setup innovative collaborations. Companies should look at potential partnerships among customers, suppliers and innovative startups– any type of organisation with bold ideas – that could help develop new business and operating models. This should also include spotting potential disrupters and finding ways to collaborate with them before they can cause problems.

And finally, execute those ideas by creating and experimenting with new business models, products and services based on digital insights and opportunities. It’s important to remember that the key source of digital advantage comes from continuously testing new ideas and ‘learning by doing’ for example through rapid prototyping.