SAN JOSE, Calif., May 14, 2015 /PRNewswire/ -- Many of the world's largest corporations are scrambling to transform and remodel their businesses as lean and inventive new startups with vision, ambition and a willingness to take risks disrupt their markets and prompt acquisitions, restructuring and a new focus on innovation, reports the Business Performance Innovation (BPI) Network. In fact, the report finds that global executives are almost unanimous in their belief that emerging digital start-ups are causing disruption in their markets.
That's because upstart category disruptors are tapping into shared economy business models, agile and efficient cloud-based IT operations, Big Data insights and more digitally connected and socially influenced consumers to create new value and experiences for customers. The new crop of emerging growth companies are forcing large corporate incumbents to rethink and reinvent the way they engage more intimately with customers and make their products and services more accessible and available through all channels of interaction.
These are some of the key takeaways from a new global study undertaken by the BPI Network, in partnership with Tech Mahindra, a specialist in digital transformation, consulting and business re-engineering solutions. Members of the BPI Network include chief innovation officers and heads of IT transformation, change management, business re-engineering, process improvement, and strategic planning.
<<Download the report at http://www.bpinetwork.org/start-up-innovation>>
Entitled "Start-up Innovation Inspiring Business Transformation: How Disruptive Entrepreneurship is Driving Corporate Renovation and Reinvention," the research report is based on an online survey of more than 250 enterprise business leaders and innovators across North America, Europe and Asia. The Q2 2015 study was undertaken by the BPI Network, in association with the TiE organization, which has 14,000 entrepreneurs in 60 chapters across 17 countries. TiE is the producer of TiEcon, the largest conference on entrepreneurship, which will be held May 15 and 16 in Santa Clara, California. Findings will be discussed at a special panel presentation on May 16.
According to the BPI Network report, 98 percent of survey participants believe new digitally driven category contenders are disrupting traditional markets, including 37 percent who describe the market disruption as "severe." These new ventures are bringing to market direct-to-customer business models that are data-driven, convenient, efficient and more personal. The biggest perceived benefits to customers include:
- Making it easier to shop, compare and pay
- Increasing access, availability and convenience
- Lowering costs and barriers to entry
"We're seeing a growing number of high profile, emerging growth companies that have become disruptive forces in traditional markets, like insurance, hospitality, travel, healthcare, education, transportation, retailing, marketing, sales, advertising, payments, communications, entertainment, and investing," notes Donovan Neale-May, executive director of the BPI Network. "Their shared economy business models and new digital channels of engagement and market access are producing rapid growth, astounding valuations and stratospheric multiples when they go public."
Big companies are not standing still. According to Lakshmanan Chidambaram, senior vice president of North American operations at Tech Mahindra, many of Tech Mahindra's U.S. and global enterprise clients have "intrapreneurial" teams, Open Innovation initiatives and are scanning aggressively for investments, co-development opportunities, and acquisitions to increase their competitiveness. They are also embracing more nimble business practices, leaner operational models, and new transformational technologies.
"Large enterprises cannot afford to cede innovation and disruptive thinking to business start-ups and emerging contenders. Technology change is creating huge opportunities, and successful companies now believe they need to become market disruptors themselves," said Chidambaram. "Our clients globally and in every industry are embracing new digital business models, and aggressively tapping into the disruptive power of data and connected technologies. They're implementing more cost-efficient and automated IT and business operations to improve agility and seeking to create competitive advantage through the development of new connected experiences, products, solutions and supply chains."
A number of these disruptive innovators will be presenting at the TiEcon Silicon Valley event, where they will be seeking more funding, partnering, networking and insights. Among the dynamic new ventures and growth companies represented at the two-day conference are Lyft, Tesla, Liaison Technologies, Credit Karma, Flipcart, App Dynamics, Qlik, Pub Nub, Loop Pay, Bromium, Zomato, Nutanix and Declara. More notable category disruptors include: classified ads (Craigslist), long distance calls (Skype), record stores (iTunes), research libraries (Google), local stores (eBay), taxis (Uber) and newspapers (Twitter).
Corporate business executives surveyed in the BPI Network study believe that large enterprises are learning from, and emulating, technology savvy, fast-moving and opportunistic young competitors. Most notably by becoming more customer-centric in their thinking, being willing to fail and take non-traditional approaches, as well as disrupt the status quo through technology innovation.
Respondents perceived the most category disruption to be taking place in the following 10 industry sectors: 1) Advertising, sales and marketing; 2) retailing; 3) IT solutions and services; 4) entertainment; 5) media; 6) travel; 7) education; 8) banking; 9) payments; and 10) healthcare.
Survey respondents additionally ranked the top five ways corporate incumbents are seeking to pre-empt or stay competitive with new contenders. This includes:
- Building and funding "intrapreneurship" teams and "inventioneers"
- Recruiting, empowering and promoting "change agents" in the enterprise
- Investing in promising startups and new ventures
- Embracing Open Innovation strategies and containing the Not Invented Here syndrome
- Monitoring impact and implications of disruptive technologies on their business
In seeking to understand why some large corporates are struggling to continuously innovate and neutralize new rivals, BPI Network survey respondents believe established enterprises are most challenged by:
- Management politics, functional competition and silos of operation
- Organizational structure and change-resistant mentality
- Self-preservation and concerns about failure among executives
The full 31-page report is available for download from the BPI Network web site. The research was undertaken in April, 2015 with 34 percent of respondents drawn from companies with annual revenues of more than $1 billion, 17 percent from middle market companies with revenues between $100 million and $1 billion, and 49 percent from companies with less than $100 million in annual revenue.
About the BPI Network
The Business Performance Innovation (BPI) Network is a peer-driven thought leadership and professional networking organization reaching some 50,000 heads of IT transformation, change management, business re-engineering, process improvement, and strategic planning. It is dedicated to advancing the emerging roles of the Chief Innovation Officer and Innovation Strategist within today's enterprise. The BPI Network brings together global executives who are champions of change within their organizations through ongoing research, authoritative content and peer-to-peer conversations. These functional area heads (operations, IT, finance, procurement, sales, marketing, product development, etc.) and line-of-business leaders are advocates for Innovation as a fundamental discipline and function within 21st Century organizations. They seek to demonstrate where and how new inventive solutions and approaches can advance business value, gratify customers, ensure sustainability and create competitive advantage for companies worldwide. Learn more at www.bpinetwork.org
About Tech Mahindra
Tech Mahindra is a specialist in digital transformation, consulting and business re-engineering solutions. We are a USD 3.5 billion company with 98,000+ professionals across 51 countries. We provide services to 674 global customers including Fortune 500 companies. Our innovative platforms and reusable assets connect across a number of technologies to deliver tangible business value to all our stakeholders. Tech Mahindra is also amongst the Fab 50 companies in Asia as per the Forbes 2014 List. We are part of the USD 16.5 billion Mahindra Group that employs more than 200,000 people in over 100 countries. Mahindra operates in the key industries that drive economic growth, enjoying a leadership position in tractors, utility vehicles, information technology, financial services and vacation ownership. Connect with us on www.techmahindra.com
Kevin Sugarman – BPI Network
SOURCE Business Performance Innovation (BPI) Network