It is the end of industries as we know them, which have been dissolved by technology
Every company is a software company? Yes, but that’s only part of the story. A new survey shows that seven in ten business leaders are willing to venture across industry lines to pursue new opportunities.
This means new levels of competition, but it also means a marriage of opportunity and convenience. Automotive companies are converging with consumer goods companies. Consumer product companies are getting into retail. Technology companies play in the field of communications and digital media. Telecommunications and digital media companies have become technology providers.
It is the end of industries as we know them, which have been largely dismantled by technology, as documented in Deloitte’s survey of 500 companies. At least 70% of executives believe their business has monetizable assets outside their sector. Another third reported that they spend more than a fifth of their revenue on growth outside their industry or sector.
“We are seeing an acceleration in industry hybridization in every sector compared to just five years ago,” says Brett Davis, principal at Deloitte Consulting and managing director of Converge by Deloitte, who co-authored the survey report and shared his observations on this growing growth. direction. “The lines are becoming increasingly blurred between traditional industries and competitors, collaborators, customers and suppliers.”
This means more competition – half of executives (51%) see a big or very big threat to their current market position from companies outside their sector. This threat may be mitigated by some compelling positive aspects. “Companies now have access to data points from multiple industries and bring them together to gain stronger insights into their target audiences,” says Davis.
Examples include “traditional non-financial services companies that offer financial services products such as banking or lending and integrate them with existing products and services,” he says. Another example, he says, is “the convergence of the technology and healthcare sectors.” These organizations are “coming together to deliver new experiences that integrate physical and digital experiences.”
The technologies facilitating this trend are all of the above – including “the cloud, artificial intelligence, social media, mobile, 5G, and robotics,” Davis explains. These technologies also significantly level the playing field, “helping mid-market players penetrate their businesses and compete with larger companies with much lower capital investments than in the past.”
New entrants to the market “can quickly launch integrated solutions with support from service providers across the vertical cloud rather than creating on-premises technology solutions, which requires a huge amount of investment in workforce and architecture,” he adds.
For example, Davis worked with a leading global money transfer company – a non-bank – that “wanted to build and launch a digital banking platform as part of its strategy to expand and deepen the relationship it has with its customers.” While launching a digital bank from scratch can be expensive and time-consuming, often taking several years. By taking a hybrid approach, the organization was able to accelerate and launch its digital banking offering in Germany, Romania and Poland in just 11 months.
There are many paths to this cross-industry hybridization. “Companies are hybridizing through new partnerships, organic investments in new businesses and platforms, as well as M&A activity, and sometimes all three to enter adjacent markets and spaces,” says Davis. “We are also seeing an increase in somewhat quick defensive plays when major high-volume players in one sector indicate or make moves to enter another sector.”
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(tags for translation)Deloitte