February 2016 – Prepared by Zeus Kerravala
Digital transformation isn’t a technology or a product. Rather, it’s a philosophy for using digital assets to change the way an organization runs. It involves realigning technology and modifying business processes to better engage employees, customers and other constituents of the extended enterprise. Digital transformation significantly improves the performance and reach of an enterprise and has become a top priority for IT and business leaders across the globe.
Digitization is reshaping the business landscape at an unprecedented rate. The disruption of established businesses used to take decades, but natively digital organizations such as Uber, Google and Amazon have disrupted their respective markets in fewer than 10 years. Digital transformation is creating new winners and losers faster than ever before. Exhibit 1 shows that in 1960, on average, businesses remained on the S&P 500 Index for 50 to 60 years; by 1980, the rate of change was cut in half. Based on these trends, by 2025, businesses are forecast to stay on the index for an average of only 12 years. Leveraging this economic data, ZK Research predicts that 75% of the index will turn over in the next 10 years. New market leaders will emerge, and established organizations will struggle to survive.
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