So why are organisations facing these challenges, and how can they address them? Here are some ways companies can deal with such risks as we move into 2016.
Surviving digital disruption
Almost every established business model in Australia is facing digital disruption as people increasingly expect to pay for most services via online transactions.
To survive digital disruption, Australian organisations must innovate or risk being left behind. Fostering a culture of innovation within your organisation, while also collaborating with external partners, are both essential.
For example, as a response to a swathe of new competitors shaking up the banking and financial services industry, the Commonwealth Bank of Australia (CBA) has developed an agile workplace that encourages innovation. With now more than 65 per cent of CBA’s transactions processed online, the bank is focused on how it can expand and improve digital services for its customers.
Not all ideas make it to market – beta testing allows the bank to gauge customer responses to prospective products and services. CBA recently launched a tap-and-wave service that allows customers to make purchases with a simple wave of their smartphones.
Client needs impacting IT
According to the survey, executives are concerned about how changing client needs will impact their organisations’ IT departments.
As clients increasingly demand fast and accessible digital services, the IT departments of organisations will play an important role in shaping long-term digital strategies. This means companies must shift their organisational structure to empower IT professionals to develop new digital services and create innovative products that meet client needs.
New business models entering the Australian market have shaken up traditional industries in recent years – the prime examples being Airbnb challenging hotel chains and ride-sharing service Uber stealing market share from taxis.
Meanwhile, in the entertainment sector, Netflix has swooped in on the customers of Foxtel, free-to-air TV networks and even movie theatres as people look for convenience and access to a greater amount of content.
For players in the service industries and the digital space, sitting back and denying disruption could spell the end – just look at the demise of Blockbuster and Video Ezy.
Currently, the Australian taxi industry is hoping the development of tighter licensing schemes will help it regain customers from Uber. But the taxi industry will still have to battle newer entrants to the market, like other ride-sharing apps and carnextdoor.com.au, which allows owners to rent their cars to neighbours when they aren’t in use.
Instead of relying solely on regulations to protect an industry, organisations should be concentrating on meeting customers’ needs through innovating their services. If companies acknowledge the new market players and position themselves against them on equal footing, it gives them a better chance of shifting to an innovative mindset.
For Australian organisations that are likely to be disrupted, creating a separate division within the company that is responsible for experimentation and creativity is a good place to start in out-innovating the competition.
Also on the minds’ of executive leaders is stiff competition from foreign companies, which has impacted the market share of Australian organisations in recent years. In particular, Australian brick-and-mortar retailers have battled against international online retailers that offer a wider range of products at lower prices.
In a globalised marketplace, Australian companies can no longer rely purely on their local market share. But, as they say, if you can’t beat them, join them. Establishing a joint venture with an overseas partner can be a key way for Australian organisations to boost business growth.
With disruption coming from overseas, within your own industry and across the digital landscape, Australian executive leaders will need to continually adapt to compete in a shifting market landscape.
Heather Jennings is a Sydney-based freelance journalist and content producer with ten years’ experience writing about technology, finance, careers and workplace relations for a number of Australian news websites.
Heather has worked for publishers including AdNews magazine, Thomson Reuters, Yahoo7 and ninemsn.