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Digital disruption demands spending

Enterprises will need to spend $70 billion in 2015 to compete with emerging digital organisations.

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 17 Sept 2014

Enterprises around the world are preparing to enter the digital age, with over $30 trillion in market capitalisation across eight key verticals ready for disruption.

So said Theo Bensch, managing executive: Telkom Cybernest sales and marketing, while addressing delegates at the ITWeb Cloud Computing 2014 Summit yesterday. Bensch was speaking in reference to a recent report by advisory firm Zinnov.

The Zinnov study found 465 new companies moved off the Forbes 2000 list between 2011 and 2013 and another 550 companies will move from the list between 2013 and 2015 because of disruption from the digital age.

Almost 50% of the companies on the Forbes 2000 list will be dropped from the list because of the impact of the digital era, Bensch said.

It also reveals enterprises will need to spend $70 billion in 2015 in order to stay competitive against new emerging digital native organisations. This spend is expected to grow at a CAGR of 26% to reach $230 billion by 2020.

He added that the study highlights six key areas in which organisations need to digitally transform themselves: better targeting and engagement; supply chain optimisation; digital products and services; workforce and partner enablement; operational excellence; and risk management.

"Digitisation is not primarily about technology. It is a social and business phenomenon, enabled and underpinned by technology," Bensch explained.

He also pointed out that digital competitive advantage results from understanding and optimising digital impact and opportunity, adding that, thanks to digital, organisations will be able to predict, influence and respond to industry structure and changes.

"Digitisation allows organisations to get closer to customers, offer them a seamless experience and to stay at the centre of their commercial lives," Bensch said.

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