Does Digital Require Radical Disruption?

People often associate digitalization with disruption. Managers have been led to believe that digital transformation means a dramatic change to their company’s value proposition. They, therefore, end up investigating non-existent customer needs and try serving them with a new high-tech product.

But this is not what digital transformation truly is.

If you look at companies who successfully implemented innovative technology, you might see that despite the “high-tech factor”, it improved on non-digital business processes to serve the same old customer needs.

Let’s take an example from the taxi industry.

The world faced an inevitable change when Uber appeared. Taxi drivers were frightened. It seemed like this new app will destroy the taxi driver’s profession.

But “call-in” taxi services existed before Uber. You find the number and order a cab. What then? The waiting time is unknown, the ride time is unknown, and the fare/payment term is unknown.

It is not a surprise that Uber got popular – you know the exact waiting time, see the car on a map, know the arrival time, the estimate comes close to the actual fare, and you pay in a click. Drivers are prescreened. Ratings are visible. If you lost an article, you get it back.

Did Uber erase taxi companies all over the world? Nope. Consumers wanted convenience. Uber provided that. It pushed the taxi companies toward progress. There are more drivers and passengers because of it.

In our view, every digitization project should start by finding the best way to serve existing customers’ needs. Technology just enables that in ways not done before. Now every company has to pay attention to the voice of every customer and every employee. In exchange, they choose a certain company over another. The automatic price calculation, online rating, interactive maps… all driven by AI. How did we even live without it?

Uber didn’t erase the taxi industry. It pushed it to change and innovate. And the most important, it helped taxi companies listen to their customers.

Digital disruption is only feared when it is unknown. Digitalization is not scary. AI is not scary. It is a natural process of a world’s transformation. The key is to, therefore, learn what it is.