This document summarizes the results of a study by IBM that surveyed over 5,000 C-level executives from over 40 countries. The key findings were: 1) Executives feel increased pressure from outside competitors entering their industries, such as Uber disrupting the transportation industry. 2) Industry convergence and new technologies are seen as major forces of change over the next 3-5 years, with cognitive computing and the Internet of Things posing significant threats and opportunities. 3) "Torchbearers", or leading innovative companies, are more focused on new markets, decentralized decision-making, and open business models, allowing them to better adapt to disruption.

1. ©2015 IBM Corporation1

2. Rob van den Dam / Global Telecommunications Industry Leader IBM Institute for Business Value

3. For this study we surveyed
business 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
643
601
1,805
723
657
©2015 IBM Corporation3

4. ©2015 IBM Corporation4
…from more than countries
North America
Central and
South America
Western Europe
Middle East
and Africa
Central and
Eastern Europe
Asia Pacific
Japan

5. ©2015 IBM Corporation 19 November 20155
What’s putting the world’s
top executives on edge?

6. ©2015 IBM Corporation6
CxOs are terrified of outsiders making a land grab
More competition expected
from other industries
More competition expected
from within the same industry
“We used to look at the Four Seasons as a competitor.
Now we look at disruptors like Airbnb.”
CMO, Travel, United Arab Emirates
Business landscape change (in 3 to 5 years)
54%29%

7. ©2015 IBM Corporation7
In Telecom and China, competition from outside
has already been a threat for many years
76%
69%
More competition expected from other industries
Telecom industry
China
….. any many more

8. ©2015 IBM Corporation 19 November 20158
“The ‘Uber syndrome’ – where a
competitor with a completely
different business model enters
your industry and flattens you.”
Judy Lemke, CIO, Schneider, United States

9. ©2015 IBM Corporation9
Prepare for the digital invaders
Create a panoramic perspective
Be first, be best, or be nowhere
©2015 IBM Corporation9

10. ©2015 IBM Corporation10
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)
80%
TelecomChina

11. ©2015 IBM Corporation11
External forces impacting the enterprise (in 3 to 5 years)
For the first time, the entire C-suite selected
technology as the main game changer
Technology
factors
Market
factors
Regulatory
concerns
Macro-
economic
factors
People skills Socio-
economic
factors
Globalization Geopolitical
factors
Environmental
issues
72%
71%
55%
51%
48%
34%
31% 31%
27%

12. ©2015 IBM Corporation12
Telecommunications is by far the main game
changer in Telecommunications
All Telecom China
Technology
factors
Market factors Regulatory
concerns
Macro-economic
factors
People skills
90%
80%
73%
49% 53%

13. ©2015 IBM Corporation13
In coming years, Telcos expect increased impact from
cognitive, SDN/NFV, eSIMs, IoT and energy savings
Which of the following TECHNOLOGIES will be most
important for the industry?
SPECTRUM
EFFICIENCY
BIG DATA
MOBILE
PAYMENTS
CLOUD COMPUTING
ENERGY SAVINGS
INTERNET OF
THINGS
SDN/NFV
eSIM/ VIRTUAL
SIM
COGNITIVE
COMPUTING
SECURITY
SOLUTIONS
81%
77% 76%
69% 69%
56%
52%
39%
26%
20%
COGNITIVE
eSIM/
Virtual SIM
VIRTUALIZATION
ENERGY
SAVING
INTERNET OF
THINGS
2020
68%
64%
50%
71% 69%
62%
78% 77%
79%
91%
NOW

14. ©2015 IBM Corporation14
We have identified a small group of leading
innovators that financially outperform: Torchbearers
Torchbearers
100%
are Leading Innovators
20%
of Leading Innovators are
Outperformers; thus
5%
of the total population
are Torchbearers
*
Peer level
Market
Followers
Leading
Innovators
24%42%34%
2% 5% 20%
*
Outperformers in growth
and profitability

15. ©2015 IBM Corporation15
Torchbearers are better placed to take on the
disrupters
47%
38%
More decentralized
decision-making
Greater focus on
new markets
Cognitive computing
Market FollowersTorchbearers
69%
57%
62%
45%
more
38%
more
21%
more
24%

16. ©2015 IBM Corporation 19 November 201516
“We need to change the way we make decisions. If
we empower our employees more and more, we’ll
be able to accelerate the speed at which we do
business.”
Shogo Ikeuchi, CHRO, Recruit Holdings, Japan

17. ©2015 IBM Corporation17
Torchbearers are far more concerned with preparing
to change how they go to market
70%
56%
Revenue model
64%
51%
Customer segments
Parts of the business most impacted by the next wave
more
25%
more
25%
Market FollowersTorchbearers

18. ©2015 IBM Corporation 19 November 201518
“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
©2015 IBM Corporation18

19. ©2015 IBM Corporation19
Torchbearers are more likely to have deployed a
more future-oriented business model
38%
29%
Open
(ecosystem)
27%
20%
Platform
Business model types (currently using)
more
31%
more
35%
Market FollowersTorchbearers

20. ©2015 IBM Corporation20
Whether launching a new business model or a new
product offering, Torchbearers prefer to be first
80%
41%
80%
41%
Preference to reach the market first
more
95%
Market FollowersTorchbearers

21. ©2015 IBM Corporation 19 November 201521
Speed
©2015 IBM Corporation21
Scale
Scope

22. ©2015 IBM Corporation22
What’s next?
ibm.com/csuitestudy