Innovative industry incumbents, such as Unilever and Procter & Gamble, outperform digital giants, including Apple and Google, in industry disruption, according to 72% of C-suite members surveyed in IBM's Incumbents Strike Back report of 12,500 C-suite officials. This is in part because incumbents own 80% of the world's commercialized data.
Disruption is possible for 30% of companies that outperform competitors in revenue and profits. Those companies have subsequently "reached the pinnacle of personalization," and almost half of organizations are looking into new platform business models new data can be drawn from.
Digital giants were the first to effectively harness data by building a platform business model. To keep up in the market, 57% of disruptive companies are already building or operating on a platform business model. Only 17% of disruptive companies are not considering a platform-based approach.
Disruption lies in the confidence of an organization to pursue recreation. Traditional business models and platforms can only carry a company as far as the times allow. Incumbent companies are those able to harness the technologies used by the digital giants, like AI, ML and blockchain, for example.
The value a company finds in data is not necessarily a direct result of the "longevity of experience by data," said Carl Nordman, global director of IBM's C-suite study program, in an interview with CIO Dive.
However, the difference between incumbents and tech giants stems from the relationship with customers. Because tech giants were born in the age of commercialized data, they are more capable of fostering beneficial data.
Until the last year or so, incumbents were "suffering" from declines in revenue or loss in competition. Since learning where existing business platforms fall flat, incumbents have started to overcome "the disruption of these digital giants by having learned the lessons and allocating capital to projects" that will ultimately drive better business, said Nordman.
Expanding a business platform's design outside of ideals created by internal IT departments will help propel a company toward a digital yet humanized experience for customers, according to the report.