Digital transformation may have been dismissed by some as the Emporer’s New Clothes but it continues to attract the megabucks, with spending on technologies and services that enable so-called “DX” forecast to soar to $7.4 trillion (£5.7tn) in three years, driven by – you guessed it – data intelligence and analytics.
That is according to IDC’s “FutureScape: Worldwide Digital Transformation 2020 Predictions”, which reveals the critical business drivers accelerating DX initiatives and investments.
By 2022, it seems, the business world will have also undergone a major transformation, and leaders in over half of Forbes’ 2018 Global 2000 organisations will have mastered “future of culture” traits such as empathy, empowerment, innovation, and customer- and data-centricity to achieve leadership at scale.
Furthermore, the firm says that by 2022, empathy among brands and for customers will drive ecosystem collaboration and co-innovation among partners and competitors that will drive 20% growth in customer lifetime value.
IDC also says digital key performance indicators (KPIs) will mature. “By 2020, 60% of companies will have aligned digital KPIs to direct business value measures of revenue and profitability, eliminating today’s measurement crisis where DX KPIs are not directly aligned.”
Meanwhile, a separate IDC report, the updated Digital Transformation Spending Guide, shows that the financial services sector will see the fastest overall growth in DX spend with the banking, insurance, and security and investment services industries each delivering compound annual growth rates (CAGRs) of more than 19% over the forecast period.
The services sector, which includes industries like retail and professional services, will also outpace the overall market with an 18.0% CAGR while public sector spending growth will match the overall market at 17.1%.
However, the largest spend will come from manufacturing, including automatic operations, robotic manufacturing and “root cause” analysis. The report forecasts the sector will account for nearly 30% of the worldwide total.
Western Europe will be the second largest geographic market in 2019, behind the US, but ahead of China.
IDC Customer Insights & Analysis Group senior research manager Ashutosh Bisht said: “In the current competitive business world, digital transformation is the topmost strategic priority for every organisation.
“Nevertheless, the concept is confusing and intricate. Digital transformation involves managing the existing business and building for the future at the same time, something like changing the engine of the plane while in flight.”
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