Companies will modernize legacy systems, implement artificial intelligence at scale, and align digital KPIs with business value measures
IDC predicts that digital transformation spending will grow to more than 53% of all information and communications technology (ICT) investment by 2023, up from 36% today. The largest growth will be in data intelligence and analytics.
"Direct digital transformation investment is growing at 17.5% CAGR and expected to approach $7.4 trillion over the years 2020 to 2023 as companies build on existing strategies and investments," Fitzgerald said. "Organizations with new digital business models at their core are well positioned to successfully compete in the digital platform economy."
There are a few surprises in the 10 predictions, including:
50% of organizations will neglect investing in market-driven operations.
Data analytics will create information-based competitive advantages.
65% of organizations will aggressively modernize legacy systems with extensive new technology platform investments through 2023.
Here is what the analysts think will most impact the digital transformation efforts of CIOs and IT professionals over the next five years.
SEE: Tech Predictions For 2020: More must-read coverage (TechRepublic on Flipboard)
Prediction 1 – Future of culture
By 2024, leaders in 50% of G2000 organizations will have mastered "future of culture" traits such as empathy, empowerment, innovation, and customer-and data-centricity to achieve leadership at scale.
Prediction 2 – Digital co-innovation
By 2022, empathy among brands and for customers will drive ecosystem collaboration and co-innovation among partners and competitors that will drive 20% collective growth in customer lifetime value.
Prediction 3 – AI at scale
By 2024, with proactive, hyperspeed operational changes and market reactions, artificial intelligence-powered enterprises will respond to customers, competitors, regulators, and partners 50% faster than their peers.
Prediction 4 – Digital offerings
By 2023, 50% of organizations will neglect investing in market-driven operations and will lose market share to the existing competitors that made the investments, as well as to new digital market entries.
Prediction 5 – Digitally enhanced workers
By 2021, new future of work practices will expand the functionality and effectiveness of the digital workforce by 35%, fueling an acceleration of productivity and innovation at practicing organizations.
Prediction 6 – Digital investments
By 2023, digital transformation spending will grow to more than 50% of all ICT up from 36% today, with the largest growth in data intelligence and analytics as companies create information-based competitive advantages.
Prediction 7 – Ecosystem force multipliers
By 2025, 80% of digital leaders will devise and differentiate end-customer value measures from their platform ecosystem participation, including an estimate of the ecosystem multiplier effects.
SEE: Digital transformation road map (free PDF) (TechRepublic)
Prediction 8 – Digital KPIs 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 digital transformation KPIs are not directly aligned.
Prediction 9 – Platforms modernize
Driven both by escalating cyberthreats and needed new functionality, 65% of organizations will aggressively modernize legacy systems with extensive new technology platform investments through 2023.
Prediction 10 – Invest for insight
By 2023, enterprises seeking to monetize benefits of new intelligence technologies will invest more than $265 billion worldwide, making business decision analytics and AI a nexus for digital innovation.
- Digital transformation: A cheat sheet (TechRepublic)
- Digital transformation: An IT pro's guide (TechRepublic download)
- Digital transformation: A guide for CXOs (TechRepublic Premium)
- What is digital transformation? Everything you need to know about how technology is reshaping business (ZDNet)
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- Digital transformation: More must-read coverage (TechRepublic on Flipboard)