Chief executives, or the so called C-suite leaders, are wary of the rising trend of “uberization,” or disruptive business technologies that may revolutionize the global business landscape and boost competition to the highest levels.
In a recent IBM study called “Redefining Boundaries: Insights from the Global C-suite Study,” IBM Philippines revealed that 54 percent of C-suite leaders worldwide last year expect strong competition even outside their respective industries due to technology disruptions. The response is higher than the 43 percent of respondents who had that view in 2013.
Technology disruption is the presence of rapid technological advancement in industries—the ride-on-demand service Uber being a well-known example—that creates new business entrants that are faster, cheaper and more efficient than existing traditional businesses.
Disruption is seen as a threat to businesses due to the emergence of unlikely competitors. Many businesses and enterprises fail, as they cannot keep up with evolving market demands that being better met by continuous technological disruptions.
The IBM study interviewed more than 5,200 chief executive officers, chief financial officers, chief marketing officers, chief information officers, and other C-suite leaders in public and private enterprises across 21 industries in more than 70 countries.
The study showed that C-suite leaders expect “industry convergence” to be the primary force that will impact their businesses in the next three to five years. These leaders also share the view that the highest performing enterprises place greater priority on cognitive capabilities than market followers.
“When it comes to the competition, C-suite leaders clearly have a new threat to consider—one that is often invisible until it is too late. 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,” said Bridget van Kralingen, senior vice president of IBM Global Business Services.
The study also showed that the highest performing firms are 24 percent more likely to be focused on cognitive computing, saying that enterprises may likely succeed and get ahead of competitors if they can use predictive and cognitive analytics to forecast the emerging and future trends of the market.
Among businesses, the biggest perceived threat comes from the “new competitors that aren’t yet classified as competitors.” These new entrants with completely different business models, and other smaller and more active players that do not need costly infrastructure pose a threat to established businesses.
The study also said that 48 percent of the C-suite leaders recognize the importance for more decentralized decision-making, while some 54 percent see the need to bring in innovation from outside sources, with 70 percent of the executives planning to expand partner networks.
During interviews with the chief executives, IBM said many admitted that they find it hard to see what’s coming next. But despite this handicap, only half of the respondents utilize customer feedback when identifying and exploring new trends and technologies.
In the previous global C-suite study in 2013, 60 percent of the C-suite leader respondents said they plan to directly engage customers and apply what they learned in setting business agendas, but the current study revealed that the gap in applying feedback has hardly closed after two years.
Now, 60 percent of the respondents said they would approach customers as individuals—higher than 22 percent in 2013—while 81 percent said they plan to drive more digital interaction, which is a 19 percent increase from the last study two years ago.
“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 UK-based Ricoh Europe and one of the respondents of the study.
Eye on technology
Locally, all chief executives identify technology as the most important force affecting and impacting their businesses. Cloud computing, mobile solutions, the Internet of Things and cognitive computing are a few examples of trends that are seen to revolutionize businesses.
In a sharp change from the previous study, a 68-percent majority of C-suite leaders now see IT security as one of the top priorities in businesses.
“In 2013, when we conducted our previous C-suite study, security concerns made just a blip on their radar screens. Today, the majority of chief officers, irrespective of role or the technology they selected, think IT security is the top risk,” said Luis Pineda, president and country general manager of IBM Philippines.
“When we asked them to describe what impact the next wave of business or technology change might have on their business, many chief officers freely admitted that they found it hard to see what might be coming next, let alone reflect on its wider implications. Most chief executives, regardless of their role, were fairly consistent in their view that cloud computing, mobile solutions and the IoT are likely to predominate in the coming three to five years,” he added.