New business models, great customer service, competitive intelligence, agility and speed and talent are required to lead businesses through the changing markets and digital transformation, according to a report co-authored by Telstra and Deloitte.

The Taking Leadership in a Digital Economy report said it’s a critical time for businesses to allocate their resources effectively.

“Organisations set to win in the digital economy share these five characteristics,” said Steve Hallam, Deloitte Digital partner who co-authored the report. “And one thing is certain – being too late is more costly than being too early.”

Gerd Schenkel, head of Telstra Digital who co- authored the report, said the changes currently experiences by businesses are transformational.

“There is no debate that digital innovation – including advances in computing, networks, devices and the capabilities they unleash like cloud computing and data analytics – is a profound force in our economy,” he said.

According to Schenkel, Telstra, for instance, have and will continue to build an integrated digital experience across multiple channels including online, mobiles, tablets and social media for its customers as a way to adapt to new opportunities.

“Our intent is to make customers’ interaction with Telstra simpler and more convenient, which has resulted in significant take-up of our digital services,” he said.

“We commenced this journey 18 months ago and now 35 per cent of service transactions are completed online and our digital strategy allows our customers to deal with us at a time that is convenient to them across multiple devices and platforms.”

It’s strengthening these customer relationships and having the foresight to explore community forums, and engagement tools like gamification, as well as collaborative consumption that will begin to differentiate those able to anticipate and be ready for digital disruption and those that aren’t.

“It’s not about what you own, but what you do,” Hallam said. “Deloitte forecasts the direct contribution of the internet to the Australian economy to be $70 billion in 2016 – growing roughly 7 per cent each year over the next four years.”

In a recent research paper, Digital Disruption: Short fuse, big bang? Deloitte predicted a very significant impact from digital technology on eight out of 18 industries that account for 32 per cent of the economy. (see figure below)

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The most significant digital disruptions were forecast to occur in ICT and media, the financial and professional services industries, retail, real estate, arts and recreation.

“All too often incumbents forget to look beyond their traditional boundaries and miss the most important competition of all, that of substitutes,” Hallam said.

“In the digital economy, past competitors may also become future partners, and current customers may become future competitors. Traditional value chains that were held together by physical limitations dissolve and new, networked-based competition begins to form.”