redefining boundaries government point of view

Redefining BoundariesInsights from the Global C-suite Study

Government Industry Perspective

©2015 IBM Corporation2

For this study we surveyed

industry leaders…

Chief Executive Officers (CEOs)Chief Financial Officers (CFOs)Chief Human Resources Officers (CHROs)Chief Information Officers (CIOs)Chief Marketing Officers (CMOs)Chief Operating Officers (COOs)

818 643601

1,805723657


were from Government organizations347


The study covers more than countries

North America

Central and South America

Western Europe

Middle East and AfricaCentral and Eastern Europe

Asia Pacific

Japan


interviews

6%

4%5%7%

3%

2%

8%

4%

3%

3%

2%

6%

18%6%

8%

5%

3%

8%

Our respondents represent a wide range of public and private enterprises

Energy and Utilities

Media and Entertainment

Telecommunications

Consumer Products

Life Sciences and PharmaProfessional and Computer ServicesRetail

Travel and Transportation

DISTRIBUTION SECTOR

COMMUNICATIONS SECTOR

Banking and Financial Markets

Insurance

Aerospace and Defense

Automotive

Chemicals and Petroleum

Electronics

Industrial Products

Education and Research

Healthcare

Government and NGOs

INDUSTRIAL SECTOR

PUBLIC SECTOR

FINANCIAL SERVICES SECTOR


We identified a small group of leading innovators that financially outperform: Torchbearers

Torchbearers 24%

of the total population are Leading Innovators

20%

of Leading Innovators areOutperformers; thus

5%

of the total populationare Torchbearers

*Peer level

Market Followers

Leading Innovators

24%42%34%

2% 5% 20%

*

Outperformers in revenue growth and profitability

Market perception of the enterprise


What’s putting the world’s top executives on edge?


“The ‘Uber syndrome’ – where a competitor with a completely different business model enters your industry and flattens you.”CIO, Transportation, United States


So what does this mean for Governments?

2. Governments must create business environments that enable the private sector to compete in increasingly dynamic industries and contribute to economic vitality

1. Governments can leverage lessons from market leaders to help improve service delivery and transform business and operating models


Industry convergence – redefining boundaries

Prepare for the new digital competition

Create a panoramic perspective

Be first, be best, or be nowhere

Enabling economic vitality

Agenda



CxOs expect industry convergence to have the biggest impact on their business

Total CEO CFO CHRO CIO CMO COO

70%

60%

50%

40%

30%

20%

10%

0%

Industry convergence

The “anywhere” workplace

Rising cyber risk

The redistribution of consumer purchasing power

The sustainability imperative

Alternative finance and financing mechanisms

The sharing economy

Top trends to impact business (in 3 to 5 years)


Government CxOs expect rising cyber risk and the “anywhere” workplace to have the greatest impact

Industry convergence

The “anywhere” workplace

Rising cyber riskThe redistribution of consumer purchasing powerThe sustainability imperativeAlternative finance and financing mechanismsThe sharing economy

Top trends to impact business (in 3 to 5 years)

66% 49%

50% 65%

46% 67%

43% 18%

32% 39%

25% 17%

24% 26%

Global Government


CEOs again selected technology as the most important external force that will affect their enterprise

External forces impacting the enterprise (in 3 to 5 years)2006 2008 2010 2012 20152004

Technology factors

Market factors

Regulatory concerns

Macro-economic factors

Socio-economic factors

Globalization

People skills

Geopolitical factors

Environmental issues

2013


Government CxOs rate budgets, people skills and geopolitical factors higher than global CxOs

External forces impacting the enterprise (in 3 to 5 years)

Technology factors

Budgets People skills Geopolitical factors Regulatory concerns

72%

15%

48%

31%

55%

72%68%

64%

51%49%

Global Government

©2015 IBM Corporation13 ©2015 IBM Corporation13

New permutations are emerging out of “old” industries


“The biggest threat is new competitors that aren’t yet classified as competitors.”Piotr Ruszowski, CMO, Mondial Assistance, Poland

©2015 IBM Corporation May 1, 202314 ©2015 IBM Corporation14







Agenda



CxOs continue to see interactions with constituents moving increasingly online…

no change

no change

Business landscape change (in 3 to 5 years)

More face-to-face interaction More digital/virtual interaction

Global Government


…and CxOs plan to create more individualized customer experiences

no change

no change


More focus on customers as segments More focus on customers as individuals

Global Government


…against of the global sample

of Government CxOs plan to expand their partner network


CxOs in general see a need for more decentralized decision-making – Government CxOs are mixed

no changeMore centralized decision-making More decentralized decision-making


Global Government


How to prepare for the new digital competition

Decentralize and delegateDelegate all but the most important decisions to the people closest to your customers

Share to shineRatchet up plans to form new partnerships and share key resources with partners

Seize the middle spaceLook to become the linchpin in networks where other companies reach their customers








Agenda



“The hardest thing is working out whether what’s happening is hype, trend or tsunami.”Faik Açıkalın, CEO, Yapı Kredi Bankası, Turkey



CxOs see cloud and mobile having the greatest impact on their business in the future

Cloud computing and services

Mobile solutions

Internet of Things (IoT)

Cognitive computing

Advanced manufacturing technologies

New energy sources and solutions

Bioengineering

Man-machine hybrids

Technologies revolutionizing business (in 3 to 5 years)

63% 79%

61% 72%

57% 54%

37% 38%

28% 13%

23% 17%

12% 6%

10% 5%

Global Government


“There’s no one technology that matters most. It’s connecting the dots between

them all that’s important.”Mike Mancuso, Executive Vice President & CEO, Philips Healthcare, United States



IT security has emerged as the top risk; Government CxOs are even more concerned

68% 83%

36% 36%

35% 30%

35% 26%

30% 35%

27% 29%

25% 11%

24% 26%

Global Government

IT security risks

Reputational damage

Financial risks

Regulatory compliance violations

Loss of intellectual property

Extended periods of downtime

Data tampering

Workforce disruption

Future risks (based on next “wave” of technology)


CxOs rely mainly on conventional techniques to identify new trends – Governments are no exception

Brainstorming Predictive analytics

Simulations Prescriptive analytics

Crowd-sourcing Cognitive computing

Internal tools and techniques to identify and explore new trends and technologies

Global Government


Government CxOs look to external thought leaders for insight; less than half rely on customer feedback

External thought leaders

Customer feedback

Market research firms and analysts

Competitors

Companies in adjacent industries

Blogs and social media sites

Traditional media

55% 69%

51% 45%

50% 42%

47% 26%

39% 32%

29% 30%

21% 41%

Global Government

External sources to identify and explore new trends and technologies


Torchbearers pay greater attention to customer feedback than CxOs in Government…

External sources to identify and explore new trends and technologies

Customer feedback

GovernmentGlobal Torchbearers


… and they place far more weight on next generation technologies than Government CxOs

Cognitive computing Advanced manufacturing technologies

New energy sources and solutions


Technologies revolutionizing business (in 3 to 5 years)


How to create a panoramic perspective

Form your own futures squadSet up a specialist forecasting team, equipped with the right technologies and skills

Cultivate your cognitive capabilitiesLook to cognitive and predictive analytics capabilities to improve confidence levels in forecasts

Take an ecocentric view of the world Leverage the collective abilities of your ecosystem to better read – and prepare for – the future








Agenda



PartnershipsProduct/service portfolio

Operating model

Strategic direction

Customer segments

Delivery channels

Revenue model

“Disruptive technologies could change the fundamentals of our business.”

Kazuo Hirai, CEO, Sony Corporation, Japan


Government CxOs believe technology will force them to reassess most aspects of their business

Product/service portfolio

Operating model Partnerships Delivery channels Revenue model Customer typesor segments

Parts of the business most impacted by technology

Global Government


of global CxOs are experimenting with different business models or thinking of doing so



When Government CxOs explore new business models, “open” and “platform” are the top choices

Open(ecosystem)

Platform Integrator Freemium Razor and blade Long tail

Business model types (experimenting with or considering)

Global Government


“Uber has a market cap that exceeds the market cap of all the car rental companies

combined, and it’s only an app.”CMO, Transportation, United States



Nobody said it would be easy: CxOs face many obstacles when deploying new business models



Torchbearers are leveraging innovative business models; governments are embracing “open” models

Open(ecosystem)

Platform

Business model types (currently using)



… and whether launching a new business model or product offering, Torchbearers prefer to be first

Preference to reach the market first



How to be first, or best

Investigate unfamiliar territoryLook to unrelated industries and organizations for completely new and different ideas

Go offline to test for the bestSet up an innovation center outside the current organization structure

Create – and capture – the momentOnce you’ve decided to launch a new business model, product or service, move fast







Agenda



The public sector must create business environments that enable the private sector to thrive

Source: Improving economic competitiveness and vitality: A smarter approach to economic development. IBM Institute for Business Value. October 2013.


Key takeaways to enable economic vitality

Understand your clients’ value chains and keep your finger on the pulse

Collaborate with private sector leaders to better understand their needs

Ensure your education ecosystem is coordinated and agile

Embrace open data initiatives to encourage and enable innovation


What’s next?


We invite you to continue the conversation

ibm.com/csuitestudy


Redefining Boundaries

Insights from IBM’s Global C-suite Study

redefining boundaries government point of view

Government & Nonprofit