Digital transformation is gaining pace in businesses around the world, driving investments in new technology and services, according to a new report by IDC.
The latest update to its Worldwide Semiannual Digital Transformation Spending Guide says that in 2019 enterprises will spend $1.18tn (£901bn) on the digital transformation (DX) of their business models, products and services, and organisations – an increase of 17.9% over 2018.
“Worldwide DX technology investments are expected to total more than $6tn (£4.58tn) over the next four years,” said Eileen Smith, programme vice president with IDC’s Customer Insights & Analysis group. “Strong DX technology investment growth is forecast across all sectors, ranging between 15% and 20%, with the financial sector forecast to be the fastest with a compound annual growth rate (CAGR) of 20.4% between 2017 and 2022.”
In terms of total amount spent on DX, discrete manufacturing ($221.6bn, or £169.3bn) and process manufacturing ($124.5bn, or £95.1bn) are out in front. Smart manufacturing is the top DX spending priority in both sectors, supported by significant investments in autonomic operations, manufacturing operations, and quality.
Retail accounts for the next largest investment in 2019, followed closely by transportation and professional services. Strategic priorities range from omni-channel commerce for the retail industry to digital supply chain optimisation in the transportation industry and facility management (transforming workspace) in professional services.
Commenting on the findings, Craig Simpson, research manager with IDC’s Customer Insights & Analysis group, said: “Digital transformation is quickly becoming the largest driver of new technology investments and projects among businesses.
“It is already clear from our research that the businesses which have invested heavily in DX over the last 2-3 years are already reaping the rewards in terms of faster revenue growth and stronger net profits compared to businesses lagging in DX initiatives and investments.”
In our Next-generation connectivity report, Jeff Travers, head of IoT at Ericsson, says that digital transformation “is a boardroom issue in pretty much every company worldwide right now” and that many firms are addressing “how connectivity might change their engagement with the customer and the way they develop their products and services“. Download your copy of the report to read more!