Why the digital transformation market will reach $2.3 trillion by 2023

Spending on technology and services that enable digital transformation (DX) is expected to reach $2.3 trillion (£1.8 trillion) by 2023, findings from an updated worldwide spending guide reports.

The International Data Corporation’s (IDC)  Worldwide Semi-annual Digital Transformation Spending Guide focused on looking at DX within business practices, products, and organizations.

A fast-growing sector

Program vice president with IDC’s Customer Insights and Analysis Group, Eileen Smith, believes that in the next four years, worldwide technology investments will total over $7.4 trillion (£ 5.7 trillion).

She says: “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 18.0% CAGR while public sector spending growth will match the overall market at 17.1%.”

The largest amount of spending will come from discrete and process manufacturing, the report forecasts, which will account for nearly 30% of the worldwide total. These industries include automatic operations, root cause and robotic manufacturing.  

Not a surprise

Alex Guillen, Technology Strategist at Insight comments that he expected no different from the outcome of the report. He says: “It’s little surprise that digital transformation is set to take over such a large proportion of IT spending. It’s not only a vital priority for organizations that want to improve their business processes and drive new opportunities. It’s also a difficult, complex process that needs significant investment and widespread business support to succeed.”

The strategist goes on to talk about the growing pressure on IT teams as well as discussing the help that digital transformation can have on this problem. “There is no quick fix to reconciling this burden; investment and technology alone won’t solve the pressure IT teams are under. Instead, digital transformation needs to be an enterprise-wide priority, with responsibility shared across the business. Without this change in corporate culture, the pressure on IT teams will only increase.”

Teams need to know what they are doing

Huw Owen, Head of EMEA & APJ at Couchbase also talks of the importance DX in tech but also suggests it is just as important for developers to know what they are doing when implementing it.

He comments: “We are at a critical moment in the digital transformation journey for many organizations. Having set out ambitious visions, now it’s all about the implementation and delivery. After all, even if you’re pumping money into new projects, it doesn’t mean you’re getting it right.”

“With so much at stake and so many potential setbacks, blindly throwing money at digital transformation isn’t the answer. Instead, organizations need to think about how they’re investing and if projects address their digital needs… Do they have the underlying data architecture in place to make transformation succeed? Have they addressed any inherent weak points, and can the architecture meet their security, performance, scalability and agility demands? Only by making bold technology choices now and ensuring they have the right people and skills in place can businesses ensure this spending on digital transformation brings the results they expect – and need.” Owen advises.