To begin to help answer, Centric Digital has developed a methodology for measuring digital “readiness” in the context of enterprise business. An end-to-end assessment of companies across industries and business models has revealed definitive insights about the state of digital in a variety of business settings and what can be expected in just the coming months.
This analysis provides Centric Digital’s point of view on where a select group of industries is in their digital transformation life cycle and how companies within those industries are or are not meeting customer’s digital expectations.
Look away for even a split second these days, and you’d be surprised at just how monumentally bearings can shift for an industry in what seems like the blink of an eye.
Just a month ago, Amazon sent shockwaves through the grocery industry with its acquisition of Whole Foods. Then suddenly on Prime Day, that same grocery disruptor’s Alexa-enabled devices top-lined the day’s discounts and helped AI assistants “cross the chasm” and achieve widespread market adoption.
While Amazon seems singularly qualified to push an industry toward disruption — see bookstores, enterprise web services, and even at-home meal prep — what comes next isn’t always so clear. Knowing disruption is coming down the pipeline is one thing, knowing when it’s at your doorstep is quite another. For the hospitality and tourism, insurance, and healthcare sectors, that time is now.
That is where Centric Digital’s Digital Readiness methodology steps in. As part of a survey of 377 companies distributed across distinct industries, Centric Digital has built a point of view on what the bleeding edge of digital disruption looks like, and which companies in what industries must pay attention — and immediately — in order to stay ahead of an oncoming tidal wave of digital transformation.
Centric Digital’s digital readiness methodology was developed to answer a simple question: Under what circumstances can a company establish its “readiness” to stay ahead of digital disruption? And more specifically: What must companies do to improve their digital readiness across their channels, through their experiences, on their internal platforms and among their processes and people to ensure that when digital is threatening to completely disrupt their business model, they are ready to conquer the steps necessary to meet those challenges head-on?
Building a consistent taxonomy to survey companies inside and out across those dimensions and then assessing every company agnostic of industry or business model revealed two distinct trends:
1. Industries, where companies scored highest in digital readiness on average, were already those industries that had undergone what many would consider “digital transformation” — already needing to redefine the consumer experience to stay competitive in a quickly evolving landscape. Meanwhile, those industries scoring just below our disruptive threshold were the most likely next target for digital disruption (“next at bat”).
The Explanation: Our digital readiness metric indicates an ability to react to changes in consumer expectations for the industry on a digital scale. If companies are better prepared for those changes, they are logically then investing in the resources and digital technologies required to be in that position. Those industries where the competition has already started pushing forward on digital transformation would then necessarily exhibit greater “readiness” for the next frontier in that industry’s digital transformation.
Healthcare and Financial Services, while already clearly feeling the broad pressures digital transformation from a variety of angles is not yet truly “disrupted” in the eyes of the digital readiness index. Looking to healthcare, the rate of change among the more traditional providers, whether labs, pharmacies or insurers, is certainly increasing, but there are plenty of elephants left lagging. That being said, however, disruption is coming more quickly than they might be ready for, and they will have to turn their attention to digital to stay relevant.
2. Those industries where companies had wide-ranging readiness scores across a spectrum of digital maturity exhibited the clearest evidence of being disrupted today. In these industries, where some immovable objects are faced with nimble startups and disruptors, the spread of digital readiness across companies shows that there are indeed vast differences in overall maturity company to company inside of an industry, and in those industries, disruption isn’t just a concept, it’s a daily concern.
The Explanation: Much like the overall readiness score, the range of readiness speaks to the variety of independent scores across companies contained in a single industry. If some companies are leaps and bounds better prepared for digital disruption than others, then those companies are preparing for a storm the industry’s laggards don’t see coming. Those leaders can react to and change with the rising tide of digital coming for every industry. Those companies with greater readiness see the impending nature of the change approaching their doorstep.
Looking to retail and apparel and insurance industries can give digital executives the clearest picture of this story. These industries, pushed forward by companies like MetLife and Amazon, are being fully displaced by digital disruption, a complete shift in the paradigm for consumer and provider. And while not every company has made the shift, a few key players are pushing change at a rate expanding the boundaries of those industries. That’s where disruption is the starkest, and that’s where things must shift, and quickly if companies hope to keep pace with consumer expectations.
So what does that mean for your industry? Among those industries with higher scores, the proposition is clear: either reimagine the journey your customers and users experience when interacting with your business across any channel or touchpoint OR risk falling so far behind the competition as to not have a chance to catch up and put out the “going out of business” placards.
We can draw a distinct line, however, at a point where that high average industry readiness gives way to the late adopters. Companies are only beginning to see the light at the end of the digital readiness tunnel as they prepare for a transformational moment like an Amazon acquisition of an industry leader to push an entire sector toward digital adoption. These are our Impending Digital Disruption companies — the ones next up to bat.
Meanwhile, industries at the very top of our Cyclone have a distinctive story to tell. In these industries, companies have already taken the steps necessary to develop an approach to digital transformation while others have not. That is the clearest personification of disruption — where a select few companies are pushing an industry toward a new digital paradigm. In these industries, companies must turn their attention to digital strategy immediately, disruption is staring down every company in that industry today.
This turning point, where an industry must transform for the sake of retaining its customers and maintaining the legacy of an industry, will eventually face every enterprise, but knowing when that turning point has arrived, when the future of your business depends on digital adoption, cannot be overvalued.