What Is Digital Disruption in Business? (Plus Examples)

By Indeed Editorial Team

Published July 4, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

When new technologies get created, they can change the way companies operate, how markets function, or the way customers have expectations for companies. Known as digital disruption, companies strive to understand its effects so they can better respond to and take advantage of it. Understanding what digital disruption is and how it functions can help you plan for sudden changes and adapt to emerging technologies. In this article, we answer the question, "What is digital disruption?", explain the potential benefits of digital disruption, and provide examples for reference.

What is digital disruption?

You might be interested in learning the answer to "What is digital disruption?". Digital disruption is a phenomenon that occurs when new digital technologies arise and become widely adapted by society or businesses. These technologies, tools, or methods can affect the existing value of a company's goods or services in a given market, either negatively or positively. For example, if a new technology arises that makes supply chains more efficient, a manufacturer might benefit from the digital disruption. Alternatively, online streaming services made digital content more accessible, but ultimately put video and audio stores almost entirely out of business.

Related: What Is Technological Disruption? (Definition and Examples)

Elements of digital disruption

There are four main elements of a digital disruption, which include:

  • Technology: Digital disruption often occurs when new technologies, like inventions or designs, impact society and business. Businesses often adopt a company-wide digital culture and embrace these new technologies or risk losing their place in the market or going out of business.

  • Business: Digital disruptions also include marketing, development, or production changes that affect how companies operate. They might respond to these changes by changing the customer experience or the company's primary marketing channels.

  • Society: This element includes society, societal movements, cultural changes, and certain habits. For example, the invention of smartphones had a profound effect on society, culture, and customer expectations.

  • Industry: Industry changes include changes in customers, methods, or company processes. Companies typically respond to such changes by learning what customers want and upgrading outdated processes to become more competitive.

Related: What Is Digital Transformation and Why Is It Important?

Benefits of digital disruption

A digital disruption can have a positive effect on a business, given that the business is adaptable and understands how to use new technology, methods, or markets to succeed. Here are some potential benefits of digital disruption:

Greater innovation

Digital disruptions often inspire companies to embrace innovative new practices, technologies, or tools that can ultimately help the company create more competitive products and services. Innovation also can have a positive effect on society and culture, with technology changing the way we communicate, work together, form personal relationships, and perform daily tasks. Innovative companies can typically enjoy more talent in their workforce, greater revenue, and a stronger public image.

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Increased customer satisfaction

When customers know their favourite brands embrace digital disruption and adapt to new technologies or methods, they might feel a greater sense of satisfaction with that brand. They can feel better about supporting certain companies when they know those companies commit to positive change and innovation. Customers might also appreciate the company's efforts to create a more effective, affordable, and high-quality product or service.

Improved company growth

Companies that embrace digital disruptions and adapt to sudden changes can experience more growth, both in terms of their workforce and revenue. For example, if a company embraces technology that makes their manufacturing process ten times faster, they might set a new standard in their industry, attracting talent to the company and gaining new customers. Many technologies help companies scale their operations, providing the tools to hire more employees, take on more or larger projects, and more effectively manage their resources.

Evolving workplaces

Workplaces can change as new technologies, methods, or industry standards arise. For example, new workflow management tools can help companies become more efficient, increasing their competitiveness and innovation in the industry. If a company adopts new policies for diversity and talent acquisition, they might attract new employees that can help guide the company into the future. The number of changes a company can make also increases, giving the business more options to become a leader in the industry and attract more customers.

Related: What Does a Digital Marketer Do? Everything You Need to Know

Cultural changes

Emerging technologies, ideas, and cultural expectations can also affect a business. For example, many businesses now focus on diversity and inclusivity in the workplace. Cultural changes can also occur because of technology. For instance, smartphones impacted the way people communicate with each other and when they're expected to be available for work.

Examples of digital disruption

Here are some examples of digital disruptions to help you learn more about the concept:

Streaming services

Video and audio streaming services are an excellent example of how a digital disruption can affect an entire industry. When these services came into operation, video and audio content distribution typically occurred either via online files or physical CDs, DVDs, and VHS tapes. Digital streaming meant that customers were able to watch their favourite movies or listen to their favourite albums, songs, radio shows, and news entirely online. Some video rental companies failed to recognize streaming as a viable opportunity for change, and have consequentially gone out of business.

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Online learning

Before the internet, learning occurred almost exclusively in a classroom or the workplace. With the introduction of the internet and personal computers, educational materials became available online. Many events have contributed to the rise of online learning, where students increasingly want more flexibility and the option to complete their education from the comfort and relative safety of their own homes. Online learning is also sometimes cheaper, meaning students can avoid or minimize the debt for their education.

Cryptocurrencies

Cryptocurrencies are an emerging financial technology that caused disruptions in financial markets. Although often volatile assets, cryptocurrencies have their own culture and have created financial resources for people around the world. Many of these currencies connect to blockchain projects, which vary in functionality from organizing supply chains and preventing counterfeit goods to storing monetary value or hedging against the inflation of fiat currencies.

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Ride-sharing

Ride-sharing services are another good example of a digital disruption. The emergence of these services changed the transportation industry, especially for public transportation services and private taxi or chauffer services. Customers gained the ability to request a ride from anywhere directly from their phone, eliminating the exchange of physical money with their driver. These services also created a new job market, where anyone can download the rideshare apps and start working extra hours as a private taxi service. This took a lot of business from established taxi services.

Search engines

Before search engines, finding information meant browsing an encyclopedia or studying in a classroom. When search engines arose with the internet, people had access to huge amounts of information. Users were able to find information on almost any topic, quickly and from the comfort of their own homes. This changed how people exchange information and also how they verify the sources of that information.

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Smartphones

The invention of the smartphone was a significant milestone in technological progress, and effectively changed the way people live, work, and shop. Smartphones were a unique invention because they combined the power of a computer with the functionality and mobility of a cellular phone, giving people unprecedented accessibility to information, resources, and other people. These devices also limited the need for services like landlines, and with apps, people began using their phone for more than just phone calls and search engines. Now, there apps for nearly everything, from dating to learning new skills and sending or receiving money.

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