| | JUNE 20209unprecedented rate and with outsized customer impact. They do this with close to zero physical footprint thanks to savvy digital marketing that satisfies the taste buds of a primarily Internet-driven customer buying behavior. On top of this, these entrants operate cost structures that unlock new revenue models. Models that allow customers to move from large upfront capital expenditures and into predictable, steady operating expenses. All because of how these entrants leverage the cloud to drive the customer experience.As industries continue to converge, previously linear value-chains are transformed into increasingly collaborative ecosystems where any given company can be a partner, a competitor or a customer. Sometimes several at once. Established companies risk overextending themselves in their relentless pursuit of growth by chasing too many opportunities at once. Or, they try to compete with new entrants on the entrants' terms rather than their own. Regardless of scenario, incumbents open themselves up to losing track of the things that attracted customers in the first place, which erodes any initial competitive advantage these companies previously enjoyed. In a world where solutions are deployed via the cloud, the Internet puts control of the buying experience squarely with customers and participants operate in ever-convergent ecosystems, suppliers must come to terms with what they can offer that others cannot. This is especially true for companies that operate in mature industries where revenue growth now primarily comes from increased market share. Clearly defining the core competences ­ not the offerings ­ an incumbent has at its disposal is important to answer the question: what does the organization bring to table that merits its existence? Firms that are able to articulate which knowledge that originally made them successful are better equipped to also understand which drivers result in competitive advantages.Armed with insights about what drives their specific competitive advantage, incumbents can now tackle the disruptive potential of cloud-based technologies on their own terms. Divestment decisions becomes more straightforward, in particular within IT operations, due to increased clarity for what kind of domain competence is required from in-house IT to successfully support business objectives and what can be outsourced to a partner. The resources that are freed up from targeted divestiture can, in turn, be reinvested into people, processes and tools that secure, augment and scale a firm's core competence further.Finally, negotiating beneficial positions and aligning incentives in these convergent ecosystems become easier when participants understand what core competence they bring to the table that others don't. The result is more impactful collaboration between customers, partners and competitors in a world where cloud technologies are becoming ever more present. Hugo NordellThe change of pace the cloud enables is simultaneously unbundling and digitizing traditional supply-chains
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