Research: IBM’s ‘Redefining Boundaries’ global C-suite report says beware ‘digital giants’ and ‘ankle biters’.
In IBM‘s second survey of the global C-suite, disruption looms large on the agenda as both "digital giants" and "ankle-biters" prepare to muscle in on new territory.
The study, entitled "Redefining Boundaries", surveyed 5247 C-suite executives (CxOs), including 818 CEOs, 643 CFOs, 601 CHROs, 723 CMOs and 657 COOs. Most represented are CIOs, with 1805 respondents.
It aims to explore how C-levels are dealing with the threat of competition and how they are positioning themselves to deal with the future.
One of IBM’s three key pieces of advice, as well as to "create a panoramic perspective" and "be first, be best, or be nowhere", was to "prepare for digital invaders" – invaders which fall into two main camps.
"There are two kinds of invader: digital giants and ankle-biters.
"’Titans like Alibaba and Tencent have begun to muscle in on territory traditionally occupied by state banks such as ours," the CIO of a financial services firm based in Hong Kong explained.
"The CMO of a U.S. food retailer can sympathize. ‘Google is getting into the grocery business to protect the profitability of its ad display business, and Amazon is getting into the business because it wants to sell the world to the world," she ruefully remarked."
While the giants are landing "a few well-placed punches", the report adds that "the ankle-biters are equally dangerous en masse.
"They’re small, smart and agile.
"They’re also unencumbered by legacy infrastructure. In fact, they often don’t have any infrastructure at all because they use others’ assets."
The banking industry is cited as an example of a traditional industry where these ankle-biters are taking "chunks of flesh". Consumers can now use "Nutmeg for savings, Kabbage for loans, Robinhood for stock trading and Currency Cloud for cross-border payments" – functions previously all performed by banks.
The digital invasion could also come from another industry, according to the report. While CxOs used to think rivals were equally likely to come from their own industry, "today, CxOs are more worried about outsiders invading their patch.
"The boundaries between industries are continuing to erode, as companies in one sector apply their expertise to others – bringing previously separate industries together and sometimes redefining the very way in which they’re classified," the report says.
"Agrochemical giant Monsanto is moving into ‘data-driven farming,’ for example, with the
creation of real-time tools to help farmers maximize crop yields.
"And U.S. defense contractor Lockheed Martin recently partnered with DNA-sequencing firm Illumina to develop personalized health and wellness solutions."