Now is the time for companies of all stripes to start reinventing their businesses to keep pace with rapid global change, IBM's top executive said on Nov. 11.
Speaking at the 16th Nikkei Global Management Forum, IBM Chairman, President and CEO Virginia Rometty said technological shifts are disrupting industries, making innovation more crucial than ever. She identified these disruptions as big data, cloud computing and social mobility.
"Three shifts at once," Rometty said. "The technology industry is used to disruption by one shift. This is the first time in history there's been three ... so the pace of change is faster than you've seen before."
Rometty stressed that companies should focus not only on technology itself but also on what it can do. "It will be about the outcomes," she said, pointing to a "new basis of competitive advantage, speed and agility, simplification and personalization."
Rometty, citing a recent study conducted by IBM, said data- and analytics-driven companies are more likely to connect with their customers and employees, personalize their product offerings and make the best decisions on a real-time basis.
The IBM chief said the results these data-fueled companies deliver are even more compelling: "[These] companies are 3.7 times more likely to build new revenue streams, three times more efficient, 2.5 times better at managing risks."
Essentially, she said, they are "redesigning work."
Rometty explained how Japanese trading company NBK's sales rose 10% after it used analytics to identify what products customers buy. Shiseido, by using a mobile application, has transformed junior sales representatives into experienced cosmetics consultants. National Grid of the U.K. was able to trim costs by 25% with analytics that predict power outages.
Innovation may be painful, but sticking to one's comfort zone is not the answer, she suggested. Her company, after all, transformed itself from a PC maker with slowing sales into a data solutions provider.
"If you do not enter the tiger's cave, you do not catch the cub," Rometty said, quoting a Japanese proverb she likened to the English phrase "nothing ventured, nothing gained."
"It's about seizing what's in front of us."