Today's competitive landscape is experiencing massive upheavals as new rivals from different industries and digital upstarts challenge the incumbent players. These competitors are harnessing cloud, IOT, mobility and other technologies to blur the boundaries between sectors, launch vastly different business models, and cut out existing suppliers.
Businesses wishing to succeed in this new marketplace need to prepare themselves for the onslaught, and learn to turn the tables to invade the invaders' space.
So said Shane Radford, entertainment and media industry lead, IBM Eastern Africa, unpacking the results of the IBM 'Redefining Boundaries' Global C-Suite Study in Johannesburg yesterday. The report surveyed 5 247 business leaders, mostly face to face, from 21 industries in over 70 countries.
The input, from a wide range of public and private sector enterprises, was analysed by IBM's global team of business strategists, consultants and statisticians. 500 of the responders were from the Middle East and Africa, and for the second time, 100 of that number came from South Africa, adding a local perspective.
Blurring industry boundaries
Radford said IBM has identified three key initiatives to prepare enterprises for the next level of competition. "Prepare for digital invaders, create a panoramic perspective, and be first, be best, or be nowhere."
He said the research revealed that the boundaries of competition are becoming ambiguous. A few years ago, C-level executives (CxOs), knew who their competition was. The biggest danger was a new rival entering the market with a cheaper product or service, which could be counter acted by improving or extending your existing product range, or getting to market in more imaginative ways.
Today the competition is often invisible until it is too late. The boundaries between various industries are blurring as businesses in a certain sector apply their expertise to others, uniting previously disparate industries, and redefining the way in which they are classified. "For example, telecoms players are launching digital and media services."
When asked to pinpoint which developments they expect to see more of in the future, he said this industry convergence was the top trend. "SA's view mirrored the global one, with responders agreeing that industry convergence is the major driver of change in the marketplace."
Digital giants and ankle biters
The question is, are we being disruptive enough, and are we moving fast enough? "Businesses today have to deal with 'digital invaders'," said Radford. These businesses use totally different business models, and usually target a vital part of the value chain, bypassing the incumbents and taking control of the customer relationship, making other suppliers redundant.
He cites two kinds of invader - digital giants and ankle biters. "Starting with the digital giants, we know that customer expectations are rising, but not exactly what they expect. Those expectations aren't being set by us, or by our competitors. They are being set outside our industry by digital giants such as Apple or Amazon. That's who we are really competing against."
Ankle biters, on the other hand, are small and agile. They are unencumbered by legacy infrastructure, and often don't have any infrastructure at all, as they use others' assets. They are hard to spot until the damage is done. "The biggest threat is new competitors that aren't yet classified as competitors."
A threat and an opportunity
So how do we prepare for digital invaders, he asks? "Technology is both a threat and an opportunity. In terms of external factors that were considered game changers, SA responders said technology is still number one, followed by regulatory concerns."
"Customer interaction is moving increasingly online. The rapid adoption of digital is also happening in a big way in SA. What also emerged, was that SA needs to collaborate more with more external parties for innovation."
Another area where SA was in line with its global counterparts, was its agreement on the impact of cloud, mobile and IOT. There was also a general consensus that although in the emerging phase, cognitive technologies are set to become a big thing, and act as a bridge to new levels of personalisation and insight from the burgeoning amounts of data flooding the enterprise.
"Another topic that we cannot leave off the table is security. This emerged as a top risk for CxO's in SA, again, in line with the global view. Today's world has multiple channels - mobile, social, physical - all of these opening up our boundaries, and coming hand-in-hand with massive risks. Customers need to know their transactions are safe."
While each of the individual types of technologies - cloud, mobile and social, IOT and cognitive - is important, it's really about the collective, the ability to harness and bring them together, notes Radford.
In conclusion, he says businesses have to get to the fundamental thinking of the industry and break away from the norms. "Re-engineering products and services is no longer enough to sustain competitive businesses."
* IBM C-Suite Study Executive Forum was run in partnership with ITWeb.
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