Digital Disruptors hustle, innovate and execute leaving legacy IT behind

Hustle is a word that means a range of intentions in different countries. But the core theme of moving quickly and getting it done (sometimes “it” may be ambiguous or up to generous interpretation) is central to how capioIT views the requirements of organisations who will drive the shift towards a true digital future.

The ability to capture innovation, and execute on change may be less ambiguously defined, but is of equal criticality. For those companies that are creating the digital world, and by extension, those that will define the future for enterprises, government and consumers the ability to provide leadership in innovation, execution and the ability to drive change with speed, aka hustle, is absolutely essential.

That leads to the need to understand who is providing this leadership, and pointedly, who isn’t. Independent emerging technology research and advisory firm capioIT undertook an at times overwhelming but always independent study to rank 60 vendors on the basis of their ability to innovate, execute and hustle in the new world of the Digital Economy. These 60 technology based companies ranged in size from Bluewolf to Apple and originated in 12 countries. All have been leaders in their field at one stage in their lifecycle, be it in the modern economic era, or in the age of the typewriter and electronic calculator. Some have yet to fully reach potential, for others the glory days may have past them by.

The fifty companies included in the study were classified into five different types of organisations as follows (% indicates proportion of total companies)

• Disruptor (20%)
• Diversified (25%)
• Legacy Services (30%)
• Software (12%)
• Telco (13%)

Each firm was ranked based upon global capability based on a weighted list of 10 variables. These variables or capabilities were split between Innovation and execution. Both are critical for transformation, and both require hustle.

 

Innovate
Attribute	Weighting
Internal Innovation	15%
Ecosystem Innovation	10%
Customer Centricity	30%
Hustle	20%
Digital Investment	25%
Total	100%

 

Execute
Attribute	Weighting
Client Outcomes	30%
Global Integration	20%
Workforce Engagement	20%
Partner Investment	15%
Hustle	15%
Total	100%

Disruptors lead across virtually every metric. They are able to innovate and execute better.  It is not surprising that the ability to innovate is even proportionally stronger than the execute rating. That is the upside of being a disruptor, innovation leads execution. At the same time execution is essential. If you cannot execute on innovation you will not last long.

Of the legacy firms, the best placed are software firms. The successful software firms (and software components of the diversified technology providers) have been able to innovate in particular. There is a lag in execution, but unlike some of the other vendors the base has established.

Key Strengths of Disruptors

• Seed and create change
• End to end culture of innovation
• Creation and significant enhancement of emerging business models
• Ability to fail and rebound
• Understand processes where value is created and those that are less valuable
• Employee empowerment
• Knowledge that the market is never won
• Hustle Hustle Hustle
• Passion Passion Passion

Key Weaknesses of Laggards

• Organisational silos
• Culture of holding onto what used to work
• Inability to evolve at speed
• Management by control
• Lack of hustle
• Follow not lead

The sixty vendors are highlighted in the chart above. Clearly with 60 vendors this is a busy  chart. But what it does highlight is that being a disruptor and a legacy vendor is difficult. Disrupters make new markets, fail fast and have ample passion and the ability to hustle. Twitter, Facebook, Amazon and Apple have created new markets. Salesforce, Google et al did not create markets as much as revoutionalise and democratize existing innovation at scale other entrants cannot match.

The disruptors are also differentiated within and between their ecosystem. Overwhelmingly the traditional vendors included in the study are basically clumped in undifferentiated glue. Escaping is difficult. Arguably, only Microsoft has escaped the wrath of the legacy bear trap.

Why has Microsoft escaped? – It acquired what it needed, it had a hustle culture, embraced passion and regained the ability to seed and create change. Compare this to a firm such as HP who has struggle to shift beyond organisational siloes, operate at speed and is following the market.

In general, Indian based services providers are reinforced as part of the legacy, not as the disruptors they once were.  They have failed to shift onto the next big plays in the market, and are heavily reliant on labour based activities, and acting too slowly in the shift to automation. CSC, CGI, Fujitsu et al are even more challenged as they have not properly adopted services to the Indian provider market game, let alone the newest challenge of automation and as-a-service services.

IBM is a company struggling with a dual identity. On one hand, investments in Bluemix, Watson, Analytics and Cloud make it a clear innovator and market creator. Balancing this out is challenges with legacy services and software business that are driving so many internal and client challenges. HP is struggling on many fronts, but has the hope of a breakup presenting the best structure for it to hustle.

Capture Point

Transforming organisations is difficult. Only a small number of firms can have the culture, opportunity and gravitas to really transform an industry and be a true disruptor.  IT related firms are struggling significantly with the global shift towards a Digital environment. Whilst some are enjoying more success than others the path is exceptionally difficult and competitive across all parameters.

 

If you require further information, please contact Phil Hassey,  Founder capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted by email below,

[email protected]

Please see below for details of methodology, definitions etc for this study.

Included Vendors

The following vendors were included in the report.

Disruptor

• Amazon
• Apple
• Bluewolf
• Facebook
• Google
• McKinsey
• Netsuite
• Rackspace
• Salesforce
• TenCent
• Twitter
• Workday

Diversified

• Cisco
• EMC
• Fujitsu
• HP
• Intel
• Huawei
• IBM
• Juniper
• Lenovo
• NEC
• NetApp
• Oracle
• Dell
• Samsung
• Siemens

Legacy Services

• Accenture
• ADP
• Atos
• Capgemini
• CGI
• Cognizant
• CSC
• Deloitte
• Genpact
• HCL
• Infosys
• Pactera
• PwC
• TCS
• Unisys
• Wipro
• Xerox

Software

• CA
• Informatica
• Microsoft
• SAP
• SAS
• Tableau
• Vmware

Telco

• AT&T
• BT
• Deutsche Telecom
• NTT
• Singtel
• Telefonica
• Telstra
• Verizon

Vendor Selection

The sixty vendors were selected for a range of factors. The majority “self-selected” as being legacy vendors or clear innovators. Some such as Tableau (analytics) and Bluewolf (Cloud based Services) were chosen to highlight the leading providers in emerging markets.

The telecommunications providers were chosen to represent both regional and global providers.  Tencent was selected as a leading disrupter from China.

Disrupter (20%) – Typically a comparatively new company, not always aligned as an enterprise IT company, but providing true disruption to the sector

Diversified (26%) – Legacy IT company offering a range of capabilities such as hardware, services, software etc

Legacy Services (28%) – Pure play services firms, either from an IT, BPO, Applications and consulting perspective

Software (12%) – Enterprise software provider

Telco (12%) – Telecommunications services provider

Methodology

Due to the extensive nature of the research and the inclusion of 60 global vendors, clearly data and process integrity is a critical component of a report of this type. It is fundamental that the data be valid and untarnished. To help ensure this, all information for the measurement and assessment of these attributes comes from a range of sources to ensure a range of opinions. Sources of information include clients of firms included, partners of the firms included, regulatory and government bodies, vendor briefings and meetings, media sources, the IT ecosystem and any other relevant source.

Ranking Variable Definitions 

Innovation

Internal Innovation – This is research undertaken within the organisation, or under the direct control. It included such functions as product development, research labs and other sources of IP

Ecosystem Innovation – This primarily relates to innovation driven by the ecosystem external to the selected vendor, be it partners, clients or other relevant groups.

Customer Centricity – The ability to act in such a way to ensure that the customer is the centre of engagement and activity

Hustle – Ability to move with speed urgency and purpose as a corporate entity

Digital Investments – Direct investments in digital capabilities, across the spectrum from legislative to security and social media.

Execution

Client Outcomes – Focus on executing to ensure client outcomes are met, directly, or by partners

Global Integration – The ability to offer similar levels of capability across global marketplaces, without a reliance upon small numbers of markets.

Workforce Engagement – To act as an employer of choice, and provide capacity for a globally empowered workforce

Partner Investment – Direct investment in new and existing partners, in addition to transformation of partner ecosystem to enable ecosystem to meet changing requirements.

Hustle – Ability to move with speed urgency and purpose as a corporate entity