I was just reading the IBM CEO Study Report, It was very interesting, I suggest everybody read it. Below are some thoughts/excerpts from the same:
What will the Enterprise of the Future Look like?
- Organizations are bombarded by change, and many are struggling to keep up.
- CEO's view more demanding customers not as a threat, but as an opportunity to differentiate.
- Nearly all CEO s are adapting their business models — two-thirds are implementing extensive innovations.
- CEO s are moving aggressively toward global business designs, deeply changing capabilities and partnering more extensively.
- Financial outperformers are making bolder plays.
Traits of the Enterprise of the Future
Hungary for Change:
CEO s are most concerned about the impact of three external forces: market factors, people skills and technology. Customer expectation shifts, competitive threats and industry consolidation continue to weigh on their minds.
These 3 were rated above many other factors including MacroEconomic Factors and Globalization - which you would think would be top factors given fears of recession, inflation etc globally.
Innovate Beyond Customer Imagination:
As one real estate CEO from India highlights, “In India, 400 million consumers will demand new housing in the next 20 years — that’s more real estate than the United States has built since the Second World War.”
the middle class is growing and becoming progressively more prosperous. Greater disposable income brings new demand for more sophisticated, higher-value
products and services.
in established economies, significant wealth accumulation among aging baby boomers and a corresponding increase in young, affluent inheritors are boosting prosperity in what some might otherwise consider flat-growth markets.
CEO s cautioned that using the same go-to-market strategies, products and services seldom works: tapping into these new geographic and demographic
segments will require a deeper understanding of these customers and a more tailored approach.
Customers now have far more sources of information, and the enterprise is no longer the definitive authority.
With the billion-user Internet, customers can broadcast expectations and share views worldwide — and publicly grade a company’s performance against them. Like-minded customers can network socially and pool their influence. And in increasing numbers of industries, customers are swapping passive roles for much deeper involvement. “Consumers” are becoming “producers,” creating entertainment and advertising content for their peers and even generating their own electricity.
The Enterprise of the Future aims beyond articulated needs and wants, creating first-ofa- kind products, services and experiences that were never asked for — but are precisely what customers desire.
- Finds ways to make offerings relevant to new markets and increasingly prosperous consumers
- Understands timing and network effects
- Connects everyone to the customer
- Uses technology to anticipate shifts faster than the competition
As the world becomes more connected and more accessible, CEO s see tremendous opportunities to expand their global reach, tapping into new sources of expertise and new markets. Traditional views of globalization — labor arbitrage and riding the wave of economic growth in China and India — are being replaced by a new focus: global integration. By this, they mean new business designs that facilitate faster and more extensive collaboration on a worldwide scale and rapid reconfiguration when new opportunities appear.
Across the entire CEO sample, more than half plan to deeply change their organizations’ capabilities, knowledge and assets. New customer expectations are driving some of these shifts. “We need to move away from an operational focus to a client interface focus,” one U.S. CEO said. “This requires new skills and a new skill mix for the corporation.”
We also found that outperformers are 20 percent more likely to partner extensively than underperformers.16 This reinforces what we discovered in our last CEO Study: extensive collaborators outperform their competitive peers.“Partnering has shifted from tactical ‘Enter a new market’ to strategic ‘Access to capabilities’,” explained one CEO from Hong Kong.
Disruptive By Nature
Most CEO s are embarking on extensive business model innovation. And outperformers are pursuing even more disruptive business model innovations than their underperforming peers.
CEO s told us they are changing their business models because it is increasingly difficult to differentiate based on products and services alone. But they also stressed another reason: they simply have more options now.
Forty-four percent of CEO s are focused solely on enterprise model innovation or are implementing it in combination with other forms of business model innovation. This trend toward enterprise model innovation is even more pronounced in emerging economies (53 percent).
Enterprise model Specializing and reconfiguring the business to deliver greater value by rethinking what is done in-house and through collaboration (as Cisco
has done by focusing on brand and design while relying on partners for manufacturing, distribution and more).
Among those pursuing revenue model innovations, nine out of ten are reconfiguring the product, service and value mix. Half are working on new pricing structures.CEO s are incorporating more services into their offering portfolios and changing one-time payment models to ones centered on recurring charges. More are starting to price based on value to the customer, rather than on cost plus. Depending on the particular needs of their respective industries, some companies are bundling to create more valuable solutions, while others are unbundling to offer customers a menu of choices.
CEO s are also using revenue model innovation as part of their geographic expansion strategies. Having the right pricing structure, they told us, is critical when entering markets like China and India where consumers have a wide range of incomes.
CEO s mentioned several reasons for not pursuing industry model innovation. But most can be summed up with: it’s tough to do. For similar reasons, industry model innovators are more focused on redefining their existing industries (73 percent) than on entering or creating entirely new ones (36 percent).
Things to do::
- Thinks like an outsider
- draws breakthrough ideas from other industries
- empowers entrepreneurs
- Experiments creatively in the market, not just the lab
- Manages today’s business while experimenting with tomorrow’s model
Genuine Not Generous
CEO s are investing rapidly in corporate social responsibility. CEO s generally agree that customer expectations of corporate social responsibility (CSR) are increasing.While customers have always cared about societal issues, their concerns are now more frequently turning into action and influencing purchasing decisions. According to a recent CSR study, 75 percent of the companies surveyed say that the number of advocacy groups collecting and reporting CSR-related information on them has increased over the past three years.
- How do you get your customers/prospects to work with you to craft out your products/service offerings?
- How are IT departments /CIO's preparing for these things? - As I don?t see any of these being possible without significant assistance from IT.
- How can IT departments/CIO's collaborate better with its customers (business users)?
- How do we leverage Social Networks to get intimate with the customers and their needs?
- Though the IT industry is one of leaders in leveraging global capability - Are they leveraging the "Capability" or only "Bodies"?
- Are IT departments and IT Services Organizations processes recalibirated for Global Integration?
- What innovation in terms of Enterprise /Revenue / Industry model has IT Department or IT Services Organizations seen?