Mark McDonald

A member of the Gartner Blog Network

Mark P. McDonald
GVP EXP
8 years at Gartner
24 years IT industry

Mark McDonald, Ph.D., is a former group vice president and head of research in Gartner Executive Programs. He is the co-author of The Social Organization with Anthony Bradley. Read Full Bio

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Digitalization creates new dimensions for disruption

by Mark P. McDonald  |  April 9, 2012  |  15 Comments

Disruption is the interruption of normal work or practice according to Wikipedia.  In business disruption is the result of deliberate strategies and practices as companies seek to exploit differences and create competitive asymmetry where competitor strengths become comparative weaknesses.

Clayton Christensen detailed the principles, strategies and drivers of disruption in a series of insightful books that define the standard for business research.  Christensen’s initial publication in 1997 concentrates on how differences in price and performance can cause incumbents to take the right actions for the right reasons but produce the wrong result – disruption.

Technology is a significant source of disruption.  New technologies such as mobility, analytics, big data, social and cloud are creating dimensions of disruption that go beyond traditional tradeoffs between price and performance.  The Internet defined new terms of price and performance in terms of eCommerce models that concentrated on ‘being digital’ by transforming atoms into bits.

Digitalization reflects the business side of digital technologies.  Digitalization focuses on the application of digital resources to create value and revenue.  This is a different focus from eCommerce’s concentration on the technical transformation of analog assets into information-based resources.   One based on changing business terms rather than transactional technologies.  I believe there are three dimensions that provide a way framework for emerging digitalized business strategies and disruptions.  These are shown in the figure below.

 

Viewing digitalization from this perspective creates new dimensions of disruption – digital disruption that drive company and product strategy.

  • Access disruptions change how customers, suppliers, intermediaries and others interact and the way in which they create value.  Amazon can be seen as pursuing successive strategies of access disruption, starting with internet based disintermediation but quickly advancing to deeper disruptions through digital distribution (Kindle) including an access based approach to cloud services.
  • Disrupting enterprise economics involves understanding how digitalization changes how value is assigned, attributed and earned in ways that go beyond normal thoughts about revenue, cost and margins.  This appears to be one of the games being played between freemium/service based offers and traditional product purchase offers (i.e.: Google and Microsoft)
  • Performance disruptions created by the way in which digitalized technologies deliver a greater level of value with more effectiveness.  While Apple is the obvious example here, viewed from a performance perspective brings another view on their strategies and moves from the recent upgrades to the iPad 3 to investments in PCs and its apps/content ecosystem.

These dimensions provide a way to analyze and assess your strategy, the strategy of competitors and how to think about future moves.

Close readers of business books will recognize that access, economics and performance bear some similarities to Treacy and Wiersema’s Discipline of Market Leaders value disciplines of customer intimacy, operational efficiency and product leadership. There is some relationship, but I believe that digitalization has changed the nature of competition from the single discipline focus to one based on combinations of access, economics and performance that puts together new disruption strategies.

Digitalization and digital technology has transformed the terms of competitive disruption creating new dimensions of access, economics and performance that will define strategic moves, the distribution of value, and future terms of competition.

Latter blog posts will focus on each dimension and as always appreciate your thoughts and observations.

Related posts:

Access, one of the sources of digital disruption

15 Comments »

Category: 2012 Digitalization Distortion Strategic planning     Tags: , , ,

15 responses so far ↓

  • 1 Swarandeep Singh   April 9, 2012 at 3:45 pm

    Nice post Mark. While it is difficult to understand and predict the patterns of such industry-wide transitions, you have attempted to put up a simple framweork that is helpful. It oculd also be interesting from a strategy point of view to look at the factors accelerating and impeding the movement towards digitalization.

    Look forward to your future posts on the subject.

    Thanks

  • 2 Mark P. McDonald   April 9, 2012 at 5:36 pm

    Swarandeep

    Thanks for reading the blog and thanks for your comment. More to come latter this week and next.

    Mark

  • 3 Access, one of the dimensions of digital disruption   April 12, 2012 at 7:18 am

    [...] Mark McDonald, Ph.D., is a group vice president and head of research in Gartner Executive Programs. He is the co-author of The Social Organization with Anthony Bradley. Read Full Bio Coverage Areas: ← Digitalization creates new dimensions for disruption [...]

  • 4 Access, one of the dimensions of digital disruption   April 12, 2012 at 10:52 am

    [...] technologies are opening new avenues for companies to disrupt competitors and markets.  The prior post outlined three dimensions of disruption: access, enterprise economics and performance.  This post [...]

  • 5 Future of E-Commerce « Wiweck's Blog   April 13, 2012 at 8:46 am

    [...] Digitalization creates new dimensions for disruption (blogs.gartner.com) [...]

  • 6 Enterprise Economics, one of the dimensions of digital disruption   April 17, 2012 at 9:23 am

    [...] technologies open new avenues for companies to disrupt competitors and markets.  The prior post outlined three dimensions of disruption: access, enterprise economics and performance.  This post [...]

  • 7 Performance, one of the dimensions of digital disruption   April 20, 2012 at 3:56 pm

    [...] Digitalization creates new dimensions for disruption [...]

  • 8 Feeling digital is not the same a being digital   April 24, 2012 at 6:51 am

    [...] an ‘internet of things’ filled with new sources of value, revenue and the opportunity to digitally disrupt industries and incumbents. We can use these technologies to further mimic the analog world, but [...]

  • 9 Feeling digital is not the same as being digital   April 25, 2012 at 9:03 am

    [...] an ‘internet of things’ filled with new sources of value, revenue and the opportunity to digitally disrupt industries and incumbents. We can use these technologies to further mimic the analog world, but [...]

  • 10 Aatir RMCF Ansari   April 26, 2012 at 12:54 am

    nice post Mark, looking forward to more post on this topic
    thanks
    Aatir

  • 11 The Digital Edge in Retail   January 17, 2013 at 10:08 pm

    [...] Mapping three paths for digitalizing the business Feeling digital is not the same a being digital Digitalization creates new dimensions for disruption [...]

  • 12 Digital Technology and the Board of Directors   April 5, 2013 at 8:15 am

    [...] Digitalization creates new dimensions for disruption [...]

  • 13 Tofa IT » Digital Technology and the Board of Directors   April 5, 2013 at 12:32 pm

    [...] Digitalization creates new dimensions for disruption [...]

  • 14 A short soapy story or how laundry soap is an allegory for digital disruption   April 8, 2013 at 6:22 am

    [...] Digitalization creates new dimensions for disruption [...]

  • 15 So long and thanks for all the fish   May 16, 2013 at 9:42 pm

    [...] Digitalization creates new dimensions for disruption [...]