Incumbents Strike Back
Despite the Hype, New IBM Study Finds 72 Percent of C-suite Executives Don’t Fear Uncertain Digital Disruptors, but Innovative Industry Competitors
Industry incumbents’ influence on the market has been shadowed by digital disruptors – or unlikely competitors—but according to our new IBM IBV study that’s no longer the case. We are witnessing the rise of the “incumbent disruptor.”
Unlike the 2015 study findings where 54 percent of C-suite executives (CxOs) expected more competition from other industries, that number dropped by half to 26 percent two years later.
The largest ever IBM C-Suite study, “Incumbents Strike Back: Insights from the Global C-Suite Study,” is based on findings from meetings with more than 12,500 CEOs, CMOs, CFOs, CIOs, CHROs and COOs across 20 industries in more than 112 countries.
The new study highlights how the next wave of disruptive innovation will be led by established enterprises, posing a significant competitive threat to new entrants and digital players. In fact, 72 percent of surveyed C–suite executives claim incumbent organizations are leading the disruption in their industry rather than new entrants.
Data has become the established companies’ most powerful asset with incumbent enterprises owning 80 percent of the world’s data providing them with more opportunity than ever before to extend their expertise and experience at scale.
The use of data is of emerging importance for CxOs looking to invest in platform business models, where they can use technology such as AI and blockchain to streamline backend and frontend processes. The study found 46 percent of organizations are either investing in or considering the new platform business model – with the remaining 54 percent will need to leverage others’ platform models.
For example, like almost every other complex process dominated by data, international trade and shipping ripe for innovation by the creation of more transparent and secure handling of information among trading partners and across international borders.
Both a technology platform and catalyst for business process transformation, blockchain creates an immutable record of transactions, which enables members in a trading network to track the exchange of critical information in global trade such as records of inspection, bills of lading, customs documents and the final receipt of goods. That’s why Maersk recently announced blockchain has the potential to deliver a new era to the entire ecosystem of players in global shipping and trade including shippers, shipping lines, freight forwarders, ports, customs authorities and banks.
Since the collaboration between Maersk and IBM began to build new blockchain- and cloud-based technology for the global shipping industry, multiple parties have piloted the platform including the Customs Administration of the Netherlands and the U.S. Customs and Border Protection, Port Houston, the Port of Rotterdam, and companies such as Tetra Pak, DuPont and Procter & Gamble.
These successful pilots demonstrated how the blockchain-based platform could provide end-to-end visibility of shipments across a network of participants while automating clearance and digitizing paperwork filings. And could explain why the IBV study found future reallocation to platform business models could approach an estimated USD 1.2 trillion in the next two to three years, up 174 percent from the approximately USD 420 billion reportedly already invested.
Data alone, though, is no longer the province of the hungry upstart. Incumbents’ ability to seize this opportunity will only happen if they foster a culture where employees armed with data-based insights can be full partners in problem-solving and shaping the enterprise’s strategic direction. People skills, the hiring and training of talent, was the biggest single riser in the survey, jumping from fifth to third, and reaching levels roughly equivalent to technological factors—61 to 63 percent—in importance.
The next wave of disruptive innovation will be led by established enterprises, posing a significant competitive threat to new entrants and digital players.
By leveraging proprietary data, decades of industry-specific expertise, and emerging cloud, AI and blockchain technologies, those incumbents will out-innovate the so-called disruptors of the last decade.
There is a full series of insights being made available over the next months (roles, industries, regions) here: ibm.com/globalcsuitestudy
This article was originally published on Peter J Korsten’s Linkedin.