"INSEAD" offers hard evidence that platforms like Amazon threaten the dominance of incumbent market leaders despite the latter's deep pockets, name recognition and  established ecosystems. In this case the five Big Publishers-  Hachette, HarperCollins, Macmillan, Simon & Schuster and Penguin Random HouseRead.

"Counter-intuitive though it may seem, the little fish (i.e., small and indie publishers) are eating the leviathan’s lunch". 

Henrich Greve, INSEAD Professor of Entrepreneurship, and Seo Yeon Song, INSEAD PhD Student | December 7, 2017 

Will the same happen in other industries as industry digital platforms allow nimble, innovative competitors to unseat staid market leaders? The fabled Nokia or Kodak catastrophic decline from dominance to sidelines?

Current industry leaders have had the time to evaluate the threats and opportunities of platforms but in practice they face conundrums. 

  1. If they do not move fast they will lose the brightest and best people to successful disrupters. 
  2. Legacy systems are a constraint to fast progress.

Years of acquisitions and mergers have resulted in a multitude of disparate legacy systems that are difficult to maintain never mind use as a basis of innovation. I spoke with a VP of a major insurance company having to manage 21 different and incompatible systems. His CEO wants digital change at a dizzy rate so he faces two ways at the same time

Backwards at legacy systems and forward at digital transformation technology.

It is just not feasible to throw out the baby with the bathwater- there is still a massive asset value in the books that cannot be written off at a stroke. And legacy systems are held back by the fact that today's digital whizz kids don't want to be involved in these leviathans of old. The scale of the problem is evidenced by the success and size of MicroFocus which enables enterprises to keep these steam-age systems alive.

But the very disruption that digital platforms threaten also offer a lifeline. 

As a "wrap-around" they can deliver customer UX and operational efficiency at a speed to embarrass any digital upstart.  As long as connectivity to the core systems is light touch.

Don't plan integration. Why? You will forever be having to change the whole infrastructure whenever you need to make a front-end change.

A simple, unique and secure URL link between the digital platform and core systems is the answer. You can see this at work effectively with BI & MI embedded in enterprise apps such as Logi Analytics.

Or insurance digital platforms from 360Globalnet. Both these have proved the business case for platforms that are not technically disruptive but do offer the commercially disruptive answers to market leaders wishing to outperform new digital platform innovators.

They get the best of all worlds- combine the deep pockets, name recognition, supply chain ecosystems and system investments with world class digital platforms.

The only question for the CEO is this. "Can I steer through this digitisation strategy with the current culture, organisation and leadership?" 

Many industries have got where they are with a culture of being risk averse and compliant. Take insurance and banking for example. 

Brave CEOs will hire in Chief Digital Officers, Digital Transformation SVPs and organise and lead the whole organisation to transform everything but the effort, skill and sheer brilliance required may be too much for many.

Others should consider splitting the business in two:-

  1. An analogue enterprise to milk the opportunity whilst they can
  2. A digital entity with different people, culture, structure and organisation, technology and customers.

Which strategy will you follow?