Digital Disciplines: Attaining Market Leadership via the Cloud, Big Data, Social, Mobile, and the Internet of Things

Chapter 20Digital Disasters

Instead of attaining market leadership through the application of one or more digital disciplines, some firms seem to attain a drop in revenues, profitability, market capitalization, brand equity, or customer satisfaction and loyalty, through poor, misguided, or no application of information technology. Forewarned is forearmed: Knowledge of where others have run into problems with information technology may help you avoid repeating their mistakes.

Some digital disasters unfold quickly, as with BATS' (Better Alternative Trading System) IPO, which was halted within a half-hour due to its own trading system failure, with all trades subsequently cancelled.

Others happen in slow motion, as incumbents fail to notice challengers until it's too late. Being a challenger is no assurance of success, either. Although there are different ways to measure survival—for example, a business may close due to shifting life priorities of the founder rather than bankruptcy—it appears that only about half of new businesses last more than 5 years.¹,² This survival rate hasn't changed very much in 20 years, even with changing macroeconomic conditions, tax policies, or anything else. Moreover, the lifetime of businesses is decreasing, and turbulence, measured as the relative change in market position, is increasing.

Even for businesses that do manage to survive—or even grow to multibillion-dollar market caps and revenue streams—product launches are by no means a sure bet. ...