When Cisco’s outgoing CEO John Chambers declared that 40% of the companies in the Fortune 500 will no longer exist within a decade, it was a wakeup call for all of those with their head still in the sand about going digital.
The message was clear; digital transformation is the future and it waits for no one. Status, heritage, and the name – household or otherwise – can count for little in this particular revolution, as customers call the shots and disruptors swoop in ready to upturn every sector as we know it.
A cursory glance through the history books reveals a roll call of the big names that became casualties, the high street giants, who underestimated the capabilities of the upstarts and failed to make a necessary transition. Some 15 years on from the dot.com boom and what have we learned?
While the underlining digital technology that powers the disruption may be a better-known quantity, the more inventive and innovative ways this is used, continue to present new challenges. The sheer volume of data and greater accessibility means that the risk of being caught napping is still high for the large incumbent. Indeed, to emerge as a powerful digital player instead of an unprepared incumbent demands the most proactive and strategic of approaches.
Ultimately, meaningful transformation goes beyond the four walls of the business itself. However radical an internal overhaul may seem, if it happens in a totally insular way, it can still leave a company vulnerable in terms of being prepared and equipped to respond to the accelerated demands and expectations of today’s hyper-personalized customer experience.
Then there’s the argument for having a complete rethink of how the competition is viewed. For instance, how often do we see disruptors pitted against the multinational as something gnawing away at the profit that needs to be battled against? This may be true up to a point, but today’s savvy operators are learning lessons from the approach of their startup competitors and how this can inform and add value to their own offering. In turn, they can reposition the relationship as one where start-ups become best practice to learn from rather than just rivals to beat. Santander’s partnership with startup online finance provider, Funding Circle, is a case in point, as is Waitrose’s hook up with Ocado to establish a digital channel and home distribution service before creating its own digital offering.
Most notable is the traction in the airline sector, where a number of incumbents are following the lead of the global travel start-ups which have become their core competition having raised the bar in terms of customer expectation and service levels.
The big airlines are seeing how these disruptors are reaching customer touch points faster and in a more focused way. Tapping into their agility and innovation through open API platforms is a way of expanding and enriching the service offering as developers access the airline’s data while transforming their revenue models and driving major digital transformation. As a result, the airline can better engage with customers through the creation of mobile applications and innovative solutions that get to market sooner than traditional approaches.
But the ability to spot the opportunity isn’t just about nous and awareness. It has to be backed up with the tools and resources to properly act on it with speed and agility a prerequisite when the moment arises. It’s why the platforms that facilitate a fast response have never been more critical as the bedrock of digital transformation with solutions that integrate data and even the integration is integrated.
TIBCO’s Digital Transformation platform is a case in point underpinning all new business models to optimise your speed of response in seizing digital opportunities. We’re seeing it shift to a mainstream need as business becomes increasingly data-driven and an increasingly critical resource to leverage to establish competitive differentiation.
And it prompts the focus from the business core to the edge as big data, cloud, IoT, and mobile technologies demand alternative integration flows beyond the confines of the traditional enterprise IT.
A joined up approach on all levels is the best way to seize and optimise the digital opportunity and not become one of the 40% or more of companies predicted to be extinct in the next decade.