What Really Is Digital Disruption?
Digital disruptors don’t just come from start-ups. That was one of the key messages from a series of talks held recently at the SMU Future Ready Forum 2016.
Patrick Thng is a 30-year veteran of innovation and technology within the financial services sector and has worked for DBS Bank and the World Bank among many others. As Senior Faculty and Director, Executive Initiatives, at SMU’s School of Information Systems, he also advises corporates on how to maximise the opportunities from digital disruption.
Mr Thng says some companies don’t always understand what digital disruption is. Using social media in your company to brand yourself isn’t digital disruption, while using data analytics to better understand your customers’ buying habits also doesn’t count. Instead, digital disruption must have some form of innovation, and happens when a new entrant brings in superior technology to better meet the needs of the mass market.
Mr Patrick Thng spoke at SMU’s Future Ready Forum 2016 on “Digital Disruption: What, Why and How for the C-level Executives”.
While most people think of internet start-ups as the chief digital disruptors, they can also spring up within large and traditional organisations. For example, a number of banks have set up innovation centres which are generating ideas and innovations for their customers.
But of course there are many well-known start-ups which were launched specifically to disrupt traditional players. Recent examples include Uber and Airbnb. The interesting fact about these companies is that Uber is the world’s largest taxi company but owns no vehicles, while Airbnb is the world’s largest accommodation provider but owns no real estate.
Mr Thng highlighted what he considers are the biggest opportunities within the digital disruption space. These include financial technology (fintech) in banking, and analytics combined with the Internet of Things (IoT)—particularly the use of sensors in the insurance industry. For example, sensors in cars can quickly determine the cause of an accident, the data can be uploaded and sent to the insurer, and a payment made within 24 hours.
Talking about using the power of disruption within an organisation, Mr Thng said, “CEOs and senior leadership must provide the role model in digitisation, encouraging future sensing by educating yourself and your business leadership team.”
Looking at entrepreneurship within an organisation, Anne-Valerie Ohlsson-Corboz, Assistant Professor of Strategic Management (Practice), at SMU’sLee Kong Chian School of Business, used the example of sportswear giant Nike. As the import duties in China increased and Nike faced growing costs in the run-up to two major sporting events in Brazil, it created a shoe that required only a knitting machine and could be set up quickly. “Nike is the footwear company that spends the most on R&D. They are willing to bet on ridiculous ideas,” she said.
Assistant Professor Anne-Valerie Ohlsson-Corboz spoke at SMU’s Future Ready Forum 2016 on “Learning from Expert Entrepreneurs: Creative Problem-solving in Organisational Settings”
SMU prides itself as an industry-orientated university and has very strong links with the corporate world and is involved in a number of joint research projects, including digital disruption.
Patrick Thng and Anne-Valerie Ohlsson-Corboz were speakers at the SMU Executive Development organised Future Ready Forum 2016 held on 16—17 March 2016.
Risks In A Digital Economy
The proliferation of mobile devices, cloud computing, and the Internet of Things (IoTs) has created a new landscape of cyber risks. In particular, the shift to remote work and the increasing use of data storage and big data sets have made organisations and individuals more vulnerable to cyber-attacks.
As Dr Joseph explains, a recent report by McKinsey & Company highlights the growing scope of cyber threats and the need for organisations to take action to protect themselves. The report emphasises the importance of risk management, incident response planning, and security investment in order to mitigate the impact of cyber threats. As the number and sophistication of cyber-attacks continue to rise, it is essential that businesses and individuals take steps to protect themselves.
“With hackers using AI, machine learning, IoTs and complex algorithms, the kind of cyber-attacks have become more sophisticated when compared to the past,” adds Dr Joseph. “Add to this a big gap in the fact that there are loopholes in the regulatory landscape, with major shortfall in talent possessing relevant domain knowledge on cyber security aspects.”
With the advent of digital transformation, many businesses have become increasingly reliant on technology to operate. This has led to a corresponding increase in the number of cyber-attacks, as criminals seek to take advantage of vulnerabilities in digital systems. Some industries are more susceptible to these attacks than others, due to their handling of sensitive information or an insufficient investment in upgrading and maintaining technology.
According to Dr Joseph, the six most vulnerable industries are small businesses; the healthcare and medical sector; banking, credit or financial firms; government and military organisations; educational institutions; and energy and utilities companies.
A Security-First Mindset
With the rise of sophisticated cybercriminal activities, businesses have to future proof themselves to stay well-protected. This means that off-the-shelf, generic antivirus software and firewalls have become obsolete, adds Dr Joseph, and businesses need to take proactive steps to beef up their defences. In addition, regular training for staff on how to spot scams, investing in cutting edge technology like artificial intelligence and machine learning powered solutions, and hiring dedicated cybersecurity personnel are other steps that can be taken to increase cyber security.
“In this ever-changing environment revolving around cyber security, businesses must invest in accelerating digital transformation and make the necessary choices to navigate how they can forecast for the next three to five years,” she cautions.
“The decision made today will impact the businesses in the years to come.”
With the ever-growing reliance on technology, it is essential for leaders to be trained to understand issues related to cyber risk, to make informed decisions about cybersecurity. For example, Dr Joseph suggests the use of event simulations as an important tool for organisations to prepare for and respond to actual cyber crises. By utilising trained professionals in simulated cyber events, businesses can ensure that they are prepared for the worst-case scenario.
As Dr Joseph elaborates: “Businesses must also set aside budget for training their employees on aspects related to cyber hygiene, and create mock exercises to see how prepared the employees are with respect to identifying a cyber threat or vulnerabilities.”
Moreover, poor cyber risk management decisions can have a crippling effect on an entire organisation. With the increasing interconnectedness of decisions and interactions between different mechanisms and departments prevalent in most organisations, it is essential that risk management strategies include all three pillars of cyber security – people, processes, and technologies. By taking a holistic approach to cyber security, businesses can more effectively protect themselves from the ever-evolving threats posed by hackers and cyber-criminals.