Digital transformation spending to reach $2.3tn in 2023

Monday, 04 November, 2019

Digital transformation spending to reach $2.3tn in 2023

Digital transformation (DX) technologies and services will account for more than half of all information and communications technology (ICT) spending by 2023, according to IDC.

In 2023, global DX spending is expected to reach $2.3 trillion, achieving a five-year compound annual growth rate of 17.1% and capturing 53% of worldwide technology investment, IDC said.

“This will be the first time DX technology spending has represented the majority share of total worldwide ICT investment in our forecast, which is a significant milestone and reflective of the larger commitment to enterprise-wide digital transformation,” IDC’s Customer Insights and Analysis Group Research Manager, Craig Simpson, said.

IDC’s Customer Insights and Analysis Group Program Vice President, Eileen Smith, added, “Worldwide DX technology investments will total more than $7.4 trillion over the next four years.

“Industries have achieved varying levels of maturity to date and continue to pursue their DX objectives. The financial services sector will see the fastest overall growth, with the banking, insurance and security and investment services industries each delivering CAGRs of more than 19% over the forecast period. The distribution and services sector, which includes industries like retail and professional services, will also outpace the overall market with an 18% CAGR while public sector spending growth will match the overall market at 17.1%.”

Discrete and process manufacturing are expected to spend the most on DX between 2019 and 2023, accounting for almost 30% of the total worldwide. Leading DX uses in these industries include automatic operations, robotic manufacturing and root cause, IDC said.

Retail is set to be the third largest industry for DX spending, focusing on omnichannel commerce platforms, order orchestration and fulfillment.

IDC expects professional services and transportation to trail close behind retail in terms of overall DX spending — with the major use cases being intelligent building energy management and freight management.

Of the 219 DX use cases identified, IDC believes robotic manufacturing investments will more than double by 2023 to become the largest use case over autonomic operations. Freight management will be the third largest use case, followed by root cause, self-healing assets and automated maintenance and 360° customer management, IDC said.

Fastest spending growth will come from virtualised labs (109.5% CAGR), digital visualisation (49.9%) and mining operations assistance (41.6% CAGR).

“In the current competitive business world, digital transformation is the topmost strategic priority for every organisation,” IDC’s Customer Insights and Analysis Group Senior Research Manager, Ashutosh Bisht, said.

“Enterprises across Asia Pacific are adopting emerging technologies to enhance their operational excellence and connect more efficiently with their customers.”

IDC forecasts the United States will be the largest geographic market for DX spending, delivering around one-third of the global total throughout 2019–2023, with China expected to replace Western Europe as number two.

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