​INSIGHT: CEOs take note - Walmart and GE show what’s needed to take digital to the core

CEOs in all kinds of companies should watch and learn from what is happening...

This week, two major business news stories provided evidence of the massive investment and strategic change needed to take digital to the core of a business.

CEOs in all kinds of companies should watch and learn from what is happening at these supertanker sized firms as they make their long, wide turn towards becoming truly digital businesses.

Walmart stock took a hit when it announced expectations of flat sales this year and reduced EPS next year.

There are several reasons that CEO Doug McMillon believes he must invest in the business during this time, to ensure its health longer term.

One factor is labour - the company has raised wages for the bulk of its store employees, to keep those with better customer service skills.

But another is an earmarked investment of $US2 billion in e-commerce and digital platforms over the next two years.

Wall Street analysts know why this must happen; Walmart must invest in the digital future - because that’s where the growth is and that’s where the threat comes from - called Amazon.

GE announced that it is selling its lending and leasing business to Wells Fargo - this is part of a long term strategy to exit financial services and consumer products and focus on industrial products.

Within that new focus, GE’s industrial internet strategy - becoming a software and analytics company - is key. GE is investing heavily in the development of its digital and information technological capabilities.

Read more: Internet of Things spectrum: Cool, hot to extreme

The money has to come from somewhere.

As Jeffrey Immelt told me when I interviewed him on stage at Gartner Symposium last week “There’s no doubt we take some of the capital from the dispositions and we put that into software and analytics.”

By Mark Raskino - Research Analyst, Gartner

This article was originally published on the Gartner Blog Network

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