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Survey: Most CEOs Expect Drastic Business Changes Soon

Sixty-five percent of CEOs polled by a recent IBM survey said they expect competitive and market forces to radically change their businesses in two years, driving them to innovate or “go extinct.” The CEOs, among 765 questioned individually for the second IBM Global CEO Study, said pressures from new competitors, emerging markets and new business […]

Written By: John Hazard

Mar 1, 2006

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Sixty-five percent of CEOs polled by a recent IBM survey said they expect competitive and market forces to radically change their businesses in two years, driving them to innovate or “go extinct.”

The CEOs, among 765 questioned individually for the second IBM Global CEO Study, said pressures from new competitors, emerging markets and new business models are driving them to consider different ways of doing business, and many said they consider IT to be the backbone for that transformation.

Forty percent said they expect changes in a competitor’s business model to upset the competitive dynamics of their industry.

“Since 70 percent of our business is based on a service that will no longer exist as we know it, we need to adapt our enterprise to survive,” one CEO said, according to the report.

Click here to read about IBM’s efforts to recruit ISVs and partners to the software-as-a-service market.

“When you talk to these guys they all have examples where these disruptions have happened,” said Marc Chapman, global leader of strategy and change services at IBM Business Consulting Services, which conducted the poll. IBM Business Consulting Services is based in White Plains, N.Y.

“If it’s the airline industry, it’s Jet Blue or Southwest airlines changing the cost structure; Dell developed the direct channel and changed the way computers are sold; Tivo for television; iTunes for the music industry; Phoenix University versus brick-and-mortar colleges and universities.”

Technology and IT will be the driver behind the business model transformation that will allow the enterprise in turn to transform, said Ronald A. Williams, CEO and president of Aetna, based in Hartford, Conn.

Aetna has used technology to drive the company’s evolution from an insurance provider to a consumer-driven health care provider, he said.

“By understanding what we do—serve customers—we were able to create the next generation of health care products,” Williams said. “We realized that if customers pay more for health care, they want participate in the decision-making … We made technology support that process.”

Aetna now allows customers to compare “actual prices” for medical care prior to visits, allowing them to make informed decisions, he said.

Survey: Most CEOs Expect Drastic Business Changes Soon

John Hazard

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