In a recent update to their Worldwide Digital Transformation Spending Guide, IDC are forecasting investment of $1.2 trillion on digital transformation (DX) technologies this year, an increase of 17.8% over 2016. With an expected compound annual growth rate (CAGR) of 17.9% over the period 2015-2020, DX spending is forecast to reach $2.0 trillion by 2020.
The report argues that in a few short decades, IT has moved from the back office (the 1st Platform) to the front office (the 2nd Platform) to a 3rd Platform where technologies such as mobile, social, the cloud and Big Data Analytics are becoming embedded into every aspect of people’s business and personal lives.
As a consequence, business technologies and processes are becoming so tightly linked to customers and markets that the traditional boundary between internal operations and the external ecosystem (e.g. customers, markets, competitors, partners and regulators) is rapidly disappearing.
The challenge for business leaders, according to IDC, is to leverage the full potential of digital technologies, combined with organisational, operational and business model innovation, to transform the business, creating new ways of operating and exploiting new growth opportunities.
Digital disruption is creating an imperative to invest in digital transformation, unlocking the power of information to improve the customer experience, achieve operational efficiency and workforce optimisation.
Key Headline Forecasts:
The report provides interesting insight into what type of DX investment will be made and where:
The report identifies nine broad categories of digital transformation technologies – Business Services, Cloud Infrastructure, Cloud Software, Enterprise Hardware, IT Services, Innovation Accelerators, On-Premise Software, Personal Devices, Telecom Services; and five main digital transformation types – Information, Leadership, Omni-Experience, Operating Model and WorkSource.