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> White Paper | Best Practices in Digital Transformation
9
Analysis & Discussion
Why ‘Best Practice’
The statistics that herald the continuing rise of the digital age
are well-known. To pick a selection of the most quoted: 4
billion searches a day (Google), 500 million tweets (Twitter), 254
million orders in a day (Alibaba), 350 million new photos per day
(Facebook), 235 million messages per day (Tencent QQ). According
to Cisco’s Global Cloud Index (2015), global data center IP trac will
grow at a CAGR of 27% between 2015 and 2020 to 15.3 Zettabytes
per annum according to Cisco, and there will be as many as 25
billion devices connected to the Internet of Things (IoT).
The growth of digitalization extends wider than social media and it
will impact the core of the global economy:
• eCommerce will double as proportion of retail sales worldwide
from 7.4% in 2015 to 14.6% in 2020 at a value of over USD $4
trillion. This figure, quoted in eMarketer at August 2016 does
not include travel and event tickets. While it may not seem as
spectacular as some statistics associated with the digital era,
retail is the largest area of commercial activity in the world – the
data includes areas of the world with limited Internet coverage
and even more limited eCommerce capabilities and goods less
suited for eCommerce, for example, perishables and foods
which are the largest area of retail.
• Global B2B E-commerce will reach USD 6.7 trillion by 2020,
according to Frost & Sullivan. The rate of increase (based on US
analysis published by Forbes) of B2B will increase at double the
rate of B2C.
The disruption can be demonstrated by comparison between
some of the organisations which have been seen as disruptors,
those which they have displaced, and the progress of the existing
market since disruption. Do note that many other factors may also
influence what has happened to the previous market and its key
players so the information should not be read as correlating directly.
It should also be noted that disruption in some cases grows or
creates markets, rather than just displacing incumbents: u
Figure 1: The Impact of Technological Disruption
Market Disruptor Key Statistic Measure Incumbent Impact
Taxi services Uber 2.93 (2014) > 20 (2016)
Gross global revenue
USD billion (leaked)
Fall in income of 10% among
established drivers (Benedikt
Frey, OMS, 2017)
Uber appears to have grown
rather than reduced driving jobs in
cities where it operates, the better
income stats for Uber drivers are
because platform allows more
eective use of driver time
Retail Amazon
1.2% (March 2013) > 5%
(March 2017)
Share of US retail
market for categories
served by Amazon
Sales from store-based retailers
grew by only 0.8% in Q1 2017
indicating trending decline
Considered the classic disruption
case study – Borders (book seller)
filed for bankruptcy in 2011
Accommodation AirBNB
July 2012: 4 > end
2016: 55
Google search index
data
Hilton: 100 > 85; Marriott: 80 >
65; Expedia: 63> 55
From just over 1% of US supply at
end 2014 to 5.5% in March 2017
Home
Entertainment
Netflix 100 million subscribers As at July 2017
Various in DVD and enter-
tainment supply chain, sales
of DVD players have declined
from 2006. Revenue from video
streaming is now 9 times that
from DVD rental/purchase.
Bankrupcy of Blockbuter.
Netflix listed for 91 Emmys in 2017.
Source: Corporate & Media Reports; DCD 2017