Could a simple app enter your industry and destroy your business model? Executives in the C-suite are being forced to answer that question on a daily basis.
In a new IBM report, “Redefining Boundaries: Insights from the Global C-suite Study,” C-suite executives cited “Uberization” — when technology is used to cut out the middleman and turns a common task into an on-demand product or service — as a primary competitive threat.
Conducted by IBM’s Institute for Business Value, the report reveals that C-level execs are worried about the risk of new technologies coming on the scene and disrupting their business models. To combat that issue, “they are placing greater priority on cognitive capabilities than market followers,” the study says.
“When it comes to their competition, C-suite leaders clearly have a new threat to consider — one that is often invisible until it is too late,” said Bridget van Kralingen, senior vice president of IBM Global Business Services.
“At the same time, the highest performers see advances in areas like cognitive computing and systems that can sense and learn as the key to dealing with disruptive events, showing a path forward for all executives,” she added.
Nearly one-fourth (24%) of C-suite leaders said they are focused on cognitive computing to learn what consumers want and need.
IBM, which has been ramping up its machine-learning division Watson, believes predictive and cognitive analytics can help enterprises forecast what might happen with a greater level of confidence.
The risks of Uberization on big business.
Businesses for a long time were worried about rivals who could provide a cheaper or better offering. Today, those same companies are being threatened by companies with completely different business models.
The study says these days competitors are often smaller and more agile players who are “unencumbered by legacy infrastructure.”
“The biggest threat is new competitors that aren’t yet classified as competitors,” said Piotr Ruszowski, CMO of Mondial Assistance.
More than half (54%) of C-level leaders acknowledge the need to bring in outside sources in their fight against unseen forces, while 70% plan to expand their partner network to combat hidden technologies.
Here are the top risks that are most feared in the C-suite, with the sharing economy listed in grey representing the “Uberization” of their industry:
There is an increasing need for proactively collecting customer feedback.
You can’t disrupt your own industry if you don’t know what customers want. Amazingly, only half of all respondents said they currently utilise customer feedback.
When asked about customer engagement for IBM’s 2013 Global C-suite Study, 60% of CEOs said they planned to directly engage their customers and proactively apply what they learned to set their business agendas. Despite those promises, CEOs and their C-level counterparts still lag behind their two-year-old promise.
In IBM’s newest study, 66% of C-suite execs say they plan to place greater focus on “customers as individuals.” That number has increased by 22% since 2013. Digital interaction is also listed by 81% as a major consideration, up from 19% two years earlier.
“We anticipate relying more heavily on partnerships and adjacencies, and on innovating by listening to clients and developing solutions together,” said David Mills, CEO of Ricoh Europe in the UK.
There are several technological factors that will revolutionise business.
IBM says top execs are placing stronger emphasis on “cloud computing, mobile solutions, the Internet of Things, and cognitive computing,” since these technologies will likely revolutionise their business models.
Those same corporate chiefs say they are now more concerned with IT security than ever before, with 68% of respondents ranking data breaches as the No. 1 risk to their enterprise.
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