To many people, it feels like a digital future has already arrived. But the exciting new technology of today will look tame in comparison with the technologies that could emerge tomorrow.
Whether or not the “augmented reality” of the future sounds like utopia, there is no doubt that tomorrow’s digital innovation will have a profound impact on our personal, social and professional lives. It will be big business too: the “wearable technology” sector alone is expected to expand rapidly in the near future, with some experts forecasting growth of between US$10b and US$50b in the next five years.*
If they are to be successful, modern businesses must account for “digital disruption” at every stage of their value chains and modify their strategic plans accordingly.
According to a survey conducted by Oxford Economics in 2011, the four areas of digital change that will have the greatest impact on businesses are: cloud computing, data, social media and mobile technology.** The full article considers the impact of each of these trends in more detail. It also warns against the related risks while reminding that, with risk, there is always opportunity.
The complexity of the situation means that businesses are devoting more and more time and budget to digital. It is estimated that total global enterprise profit from digital business will be US$14.4t by 2020 and that the market for digital consulting will be worth approximately US$72b by 2022.***
But to capitalize on this huge potential, businesses need to develop an ambitious digital strategy. EY has developed a three-stage process to help clients maximize the possibilities of digital innovation. The EY Digital Realization™ Framework focuses on three phases of the digital journey: create, incubate and activate.
As part of the first stage, EY helps clients to focus on defining their digital business offering. It is important in this initial phase for a firm to look at its digital strategies and capabilities, and to ensure that these are aligned with the business’s broader strategic vision. Companies can then identify and design the products and services of their digital offering – ensuring that this will deliver real value.
Having developed a strategy, the second phase of the Digital Realization™ Framework involves the business validating its digital offering. EY helps its clients to test their digital initiatives through small-scale pilot studies that isolate and test business assumptions. This incubation step then leads through to the final activation phase, in which EY helps clients to refine their strategies and commercialize their digital offerings, creating and capturing economic value.
* “Google unveils ‘smart contact lens’ to measure glucose levels.”
** Digital Megatrends 2015, pp. 8-14.
*** Joseph Bradley, Joel Barbier, Doug Handler, Embracing the Internet of Everything To Capture Your Share of $14.4 Trillion, Cisco, 2013, p.1.