What’s the common thread between a largely American finance and taxation software company and one of the most popular camera and accessories maker of yore? Not too long ago, both faced incredible pressure to reinvent themselves. And while Intuit was quick to pick up and ride the transformation wave early to reap huge dividends, Kodak had to go through a trough before transforming from a declining camera company to an emerging imaging company.
That digital disruption is taking over every industry is an established truth. Yet, there haven’t been enough examples among the ranks of long-established companies in this decade who have adopted the needed transformation journey with agility. In fact, we’ve seen too many of the opposite. Just think of Blackberry, Blockbuster Entertainment, or even many media houses that have disappeared for lack of adaptability to newer formats of news consumption. As the CIO of Tribune Media, David Giambruno, has beautifully put it, “We went from Flintstones to Jetsons in 9 months” – and that’s the reason they are not just afloat today but have also caught a strong wind in their sails.
This leads us to believe that by the end of the next decade, business leaders will look back at the 2020s as the era in which technology-enabled business model transformation and upended many sectors including retail, manufacturing, entertainment, transportation, and others.
Which brings us to the question:
“Why did established companies of the 21st Century take so long to understand the changing business scenario and respond to it?”
The answer is that many of these players remained trapped in traditional industry thinking and seldom stepped out of their comfort zone when they reached the maturity plateau of their business life cycle. In a way, they had become prisoners of seeing their businesses operating in an industry with firm boundaries, rather than as navigating in a digital ecosystem with porous, ever-shifting borders.
On the other hand, we have been extremely impressed by companies like Fortive who are proactive in accelerating their digital strategy by reimagining their products and customer experience. The company is leveraging opportunities opened up by the Internet of Things (IoT) to tap into the process and machine data and driving exciting innovation to extract new value in their myriad businesses – field instrumentation, transportation, sensing, product realization, automation and specialty, and franchise distribution. Read more about this here.
So, to help large companies avoid the next decade’s surprises and be a Fortive in their own industries, TCS’ Business 4.0 Thought Leadership Institute is conducting research this spring with chief information officers in large, global businesses. We are investigating the phenomenon of digital ecosystems: how many companies are preparing for them, the digital platforms that have begun to dominate commerce in those ecosystems, and the conditions necessary for any established company that wants to compete successfully in the digital arena.
Why CIOs, you ask? Our many interactions with them around the world tell us they are best suited to help the rest of the C-suite navigate the murky and fast-churning waters of business model innovation. Owing to their business outlook and a savvy comfort with evolving technology, they are at a great vantage point to take a broad and dispassionate view of the company. That’s what makes us zoom into their perspective in our study, and ask pointed questions like:
In how many companies are board directors and top executives conducting their strategic planning and thinking about digital ecosystems versus traditional industry competitors and opportunities? How involved is the CIO in these discussions? And does this vary by industry or by country?
Who’s driving the analysis of digital ecosystem opportunities? The CIO? Head of the strategy? Chief marketing officer? CEO? Other executives?
How important is it for digital business model innovators to use such technologies as cloud, IoT, artificial intelligence, analytics, etc.?
How are companies experimenting with potential new digital businesses – inside the core? Outside the core? What is the most successful structure?
How do they view competition? Through the prevailing attitude of “don’t cooperate with competitors” or the attitude of “competitors are also likely to be key partners”? Or something else?
What have the most successful digital business innovators – the companies that ignored traditional industry structures and identified whole new ways to use digital technology to deliver unprecedented value to customers – done differently? Why did they seize the digital opportunities while others didn’t? What importance did such factors as culture, agility, the digital depth of the board and top management, and the extent to which they possess customer data play in digital success or its opposite?
We are eager to share more on the results of our transformative conversations with CIOs. Stay tuned and we will be back with incredible insights from our study.
About the author(s)
Reguraman (Regu) Ayyaswamy is Senior Vice President & Global Head, Internet of Things (IoT) at Tata Consultancy Services (TCS). In this role, Regu lends direction to the world’s leading companies as they transform into connected digital enterprises, poised for growth in the Business 4.0 era. Regu partners with global business leaders to help them unlock new opportunities and revenue models by harnessing the combined power of IoT and emerging digital technologies.
Regu also leads the Engineering & Industrial Services (EIS) business at TCS where he advises business leaders on strategy, development, process and growth management. Drawing on his extensive experience, he provides direction to companies looking to develop products that focus on local markets and developing worlds, and long-term strategies for global R&D management.
Regu is passionate about bringing business and operations transformation to enterprises across industries, helping them drive top line growth through innovation and achieve bottom line improvement through efficiencies. He is an advisor to multiple global enterprises on improving their speed to market for new products, renovating their business models and overhauling their operations processes with proven impact delivered in core industries like manufacturing, utilities, transportation and retail.
An acknowledged thought leader, Regu is regularly invited as a speaker to major industry events and featured in leading online publications on how IoT can be leveraged to address the challenges faced by business organizations and drive value throughout the Connected Digital Enterprise. He is also frequently quoted by major media houses in their features about shaping key digital transformation deals in the market.
In addition, Regu holds a number of key responsibilities in many national and international fora, including serving as a Board member of TCS Japan Limited.; steering committee member of Engineering and R&D council of NASSCOM and member of the Governing Council for Center of Excellence for IoT set up by the Government of India with NASSCOM.
Regu resides in Chennai with his wife Padma, and they have a son and daughter. Outside of work and his passion for technology, Regu is an avid reader with a drive to enrich his understanding different schools of philosophy.