man yelling_S

Incumbents strike back: Leveraging years of data

A global IBM survey of 12,500 clients last November, discovered a frank admission by big companies that when digital disruption took place a few years ago, it was fast and caught them by surprise. During an interview with Enterprise IT News, IBM Malaysia’s MD Chong Chye Neo related survey responses that startups had had “a free path to go after businesses that incumbents weren’t ready to challenge.”

Startups experienced high growth, in the double digits as a result.

Since then it has tapered off and after over two years of being bombarded by the startups, incumbents are beginning to realise that they have capability to do the same as startups. “And more so, because they have deep knowledge of the business,” Chong pointed out.

She explained, “Now minds are open. For example, there is more acceptance that banking is necessary, but not banks. Everything can be done online. Incumbents didn’t acknowledge it then, and now customers come to us saying, ‘I see it, I understand it and I can do something about it.’”

Now, this requires use of technology and Chong observed companies now are ready to embrace technology as a result.

And the low hanging fruit that these companies can immediately take advantage of, involves the data that they have collected over the years.

And the three main factors of data, cost and resources are in the incumbents’ favour.


“Eighty-percent of the world’s data is behind firewalls and incumbents realise now that they can leverage data,” Chong said.

The huge turning point happened when the ability to use data in any form became available and Chong described, “Now IBM Watson has ‘eyes’, ‘ears’ and even ‘taste’ with Chef Watson.

What Chef Watson actually does is sift through thousands of recipes and also the chemical composition of hundreds of ingredients. Based on these two types of data sources, it is able to recommend up to four different types of ingredients that would blend seamlessly for a dish.

“We are using artificial intelligence of make sense of data which cannot be made sense of with traditional computers.”


Cloud computing technology has drastically reduced the cost of provisioning services. Without the sunken investment of storage, compute and networking to worry about, cloud computing is actually facilitating the use of more and more data.

Chong described, “If I set up a system to use now, and there are no regulatory limitations, I’m good to go. The cost of kickstarting anything new is reduced to subscription fees or pay-as-you-use models.”

The same goes when developing apps. With development platforms like IBM’s Bluemix, high costs can be mitigated because of the nature of cloud computing where you only pay for what you use.


Chong noted that especially in the financial services space, fintech or financial technology players are increasingly being seen as a resource that can be outsourced by banks. When fintechs approach the big banks, they also usually do so in collaboration with large technology vendors like IBM.

“The way that incumbents work is to leverage startups and universities. For example, when a bank wanted to do sentiment analysis, they leveraged a university which came back with results in 3 to 4 weeks,” Chong said while adding that instead of paying big bucks for surveys, why not regularly collect tweets and start a habit of gathering customer input?

Seventy-percent of incumbents say they are ready to strike back and IBM’s MD was quick to point out that they are already finding fast and effective ways to do so, for example by gathering customer feedback so they can design products that are relevant and meet customer needs.

This is one of the key ways that use of technology can finally turn the tide for incumbents in their strike back against the faster, leaner and more agile startups.



There are no comments

Add yours