Digital disruption is requiring companies to find new ways to reach out to customers and prospects.
The digital economy is here, especially in the U.S., where for the first time more people shopped online over the Thanksgiving weekend (including Cyber Monday) than in physical stores. But it is not just in the retail space the digital economy has supplanted the traditional players.
It is happening in multiple industry sectors as advances in technology combined with standardization disrupt existing business models. Thus, business and IT executives must adapt to a digitized ecosystem, as it is critical for business success from today onward. Business and IT executives must create new business models that marry the API cloud economy with their legacy environments.
According to the National Retail Federation, more people in the U.S. shopped online over the Thanksgiving holiday weekend (103 million) than shopped in brick-and-mortar stores (102 million).
This is a first and just the beginning of a new era.
Adobe, which tracks online retail sales, estimated that shoppers spent $11 billion online from Thanksgiving Day through Cyber Monday, an increase of 15 percent year-over-year. Furthermore, 28 percent of the sales were executed using mobile devices such as smartphones and tablets.
Similar to what happened when eCommerce came on the scene, the digital disruption is requiring companies to find new ways to reach out to customers and prospects. The below chart on digital disruption shows how digital firms have become the largest players in various industry sectors without actually owning the assets.
Not only have they garnered major market share but in some cases the digital firms have also bankrupted major brick-and-mortar firm – e.g., Amazon's success eliminated Borders Group while Netflix drove Blockbuster video rental out of business.
The API Economy
Business as usual is no longer a viable strategy. Business and IT executives have to rapidly shift gears and participate in the digital API economy. This will require the integration of existing legacy environments (as backends) with cloud applications through standard APIs. (See below chart.)
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About the author
Mr. Braunstein serves as Chairman/CEO and Executive Director of Research at the Robert Frances Group (RFG). In addition to his corporate role, he helps his clients wrestle with a range of business, management, regulatory, and technology issues.
He has deep and broad experience in business strategy management, business process management, enterprise systems architecture, financing, mission-critical systems, project and portfolio management, procurement, risk management, sustainability, and vendor management. Cal also chaired a Business Operational Risk Council whose membership consisted of a number of top global financial institutions.