The arrival of the Internet in the 1990s with its border-less nature gave rise to a myriad of start-up businesses with the opportunity to new markets and buyers like never before. Disruption had been the norm then due the agility and connectivity that the Internet enabled. 

Fast forward two decades, the tables are turning. The very same Internet that enabled start-ups to thrive now has equipped institutions and industry incumbents with knowledge to counter the trend. This new era favours big, mature companies, or the ‘incumbents’ in many industries.

According to the ‘Incumbents Strike Back: Insights from the Global C-suite Study’ that IBM’s Institute of Business Value recently released, the incumbents’ wealth of historical knowledge and mode of operations offer an advantage over newcomers from, once again, acting to disrupt their respective industries.

The organisations that weathered recent disruptions have likely grown stronger – and better ready to transform – as a result. Fortified by strong relationships and assets, industry incumbents continue to reinvent themselves. Seven out of 10 survey respondents believe that incumbent organizations, rather than new entrants, are leading the disruption in their industries. Nearly 50% of C-Suite executives believe they are either investing in or considering a new platform that feature next-gen business architecture.

It is happening in Malaysia too. Several local banks, insurance and healthcare companies around the country are adopting these disruptive technologies to accelerate their business and extend their reach.

These companies understand that they don’t need to be the first to detect a disruption that could change everything. They operate in something closer to a state of continuous change, ready to re-invent themselves. As incumbents, they are more than prepared before they’re forced to reconsider their options; this comes only when a new competitor or a market disruption appears.

The study points to two influential factors that drive the change:

• 80% of the world’s data resides behind organisations’ firewalls and only 20% of the data is public and searchable on the Internet. Established businesses can use new tools – such as artificial intelligence, blockchain, and the Cloud – to develop deeper insights from such data. They can combine unstructured data with searchable data to create competitive advantages.
  
• New business models are emerging as more organisations opt for Cloud as the platform of choice. For incumbents, these services offer the chance to expand their legacy differentiation by reaching out to new industries, becoming a new standard, or securing leadership across an entire industry
  
• The C-Suite executives whom I’ve had the opportunity to interact confided that they are learning and partnering with organisations in their value chains and even sharing physical assets and people skills with them in order to make the leap.

Indeed, it is a new dawn for Malaysia and so much to look forward to; specifically for businesses – new or 

(Text by: By Freddy Lee, Chief Technology Officer, IBM Malaysia)
(Freddy Lee is the chief technology officer at IBM Malaysia. In his spare time, he writes songs, coaches tennis and dabbles in photography,)