By John Kell and Alan Murray
June 10, 2016

In California earlier this week, I interviewed the presidents of five divisions of supply chain firm Flex, covering autos, health, consumer technology, communications and energy. I asked them: “Which of your industries is undergoing the most rapid change?” All five raised their hands.

 

They aren’t alone. Business leaders of all stripes see change coming at them fast and furious. In our survey of Fortune 500 CEOs, we asked whether their companies would change more in the next five years than in the last five years; 97% said yes. Three quarters cited a transformative trio of technologies – cloud computing, mobile computing, and sensors and the Internet of Things – as being either “very” or “extremely” important to their business in the years ahead. Half added artificial intelligence and machine learning to that list. A full 67% agreed with the statement: “These days, I consider my company to be a technology company.” Whether they pump liquids, make machines, mine minerals, or print magazines, digitization has become their destiny.

 

I explore this digital transformation in a story for our Fortune 500 issue by looking at two very different companies. One is Henry Schein (No. 268 on the list), which is in the most mundane of businesses – wholesaling supplies to dentists. By making early investments in software, Schein has now found itself driving the digitization of the dentist office, and earning outsized returns for shareholders (16% annualized returns for the last 20 years – far above Berkshire Hathaway’s 10%).

 

The other is General Electric (no. 11 on the list), which hasn’t been as kind to shareholders, but over the last five years has made some farsighted investments that have put it at the leading edge of the “Industrial Internet.” The company is hoping its new Predix software will become the platform for digitizing the world’s heavy industries.

 

You can read the story this morning, here. And you’ll find more news below.

 

Alan Murray
@alansmurray
alan.murray@fortune.com

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