{"id":2096,"date":"2018-10-01T22:17:30","date_gmt":"2018-10-01T12:17:30","guid":{"rendered":"https:\/\/whispir.wpengine.com\/?p=2096"},"modified":"2025-02-11T22:32:17","modified_gmt":"2025-02-11T11:32:17","slug":"digital-disruption-cause-and-effect","status":"publish","type":"post","link":"https:\/\/www.whispir.com\/en-us\/digital-disruption-cause-and-effect\/","title":{"rendered":"Digital disruption – cause and effect"},"content":{"rendered":"

Disruption in commerce means a radical break from the existing processes in an industry. In the digital age, this sort of disruptive innovation usually comes from new internet-enabled business models that are shaking up established industry structures.<\/p>\n

To maintain a competitive advantage, businesses, government agencies and even NGOs are being forced to adopt these new operating practices, or face going out of business.<\/p>\n

The risks are real and dramatic. A recent study by Accenture\u00a0showed that industry leaders expect\u00a0up to 40 per cent of incumbent businesses to be displaced\u00a0by new technology causing digital disruption by 2020.<\/p>\n

A clear example of this is emerging in the banking & finance sector, where industry insiders expect to lose as much as 23 per cent of revenue\u00a0to leaner tech-enabled competitors (FinTechs) by 2020.<\/p>\n

FinTech competitors are targeting 33 per cent market share, and smart money seems to agree.\u00a0Global investment in FinTech grew to $17.4 billion<\/a>\u00a0in 2016, up from just $2.1bil in 2011.<\/p>\n

So what\u2019s driving the current wave of disruption?<\/p>\n

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The Global Software Revolution<\/h3>\n

The growth of accessible cloud infrastructure, SaaS and open source software solutions, and mobile computing has significantly lowered barriers to innovation, distribution, and adoption of IT.<\/p>\n

This ubiquitous access to advanced digital technology is seeing software, and communications technologies, becoming key differentiators in the way organisations of all sizes now compete.<\/p>\n

More and more major businesses and industries are now run on software and delivered as online services\u2014drawing inspiration from Silicon Valley-style entrepreneurial technology companies that are rapidly disrupting established industry structures.<\/p>\n

Disruption tipping point<\/h3>\n

Software disruption typically manifests when nearly 50 per cent of incumbent revenue is lost to technological competition and uptakes in digital innovation.<\/p>\n

In less than two decades the global recorded music industry, for example,\u00a0lost over half its revenues<\/a>, while the fall in newspaper advertising revenues has been even steeper.<\/p>\n

Digital disruption examples:<\/h3>\n