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Home Management Leadership

IDC outlines 5 pillars of DX spending in 2022 and beyond

FutureCIO Editors by FutureCIO Editors
December 7, 2021
Photo by Pavel Danilyuk from Pexels

Photo by Pavel Danilyuk from Pexels

Global spending on the digital transformation (DX) of business practices, products, and organizations is forecast to reach $2.8 trillion in 2025, more than double the amount allocated in 2020.

The IDC Worldwide Digital Transformation Spending Guide forecasts DX spending will have a compound annual growth rate (CAGR) of 16.4% over the 2021-2025 forecast period as organizations pursue a holistic digital strategy for people, processes, technology, data, and governance.

"For the first time, IDC has forecast global DX spending to exceed $10 trillion over a five-year period," said

Craig Simpson

According to Craig Simpson, senior research manager with IDC's Customer Insights and Analysis Group, DX technology investments will accelerate in 2022, with a renewed drive towards more long term strategic digital objectives.

“Beyond operational DX investments, customer experience is garnering some of the largest DX technology investments from consumer-oriented industries such as securities and investment services, banking, and retail," he continued.

Organizations allocate their DX investments toward strategic priorities that align with what they expect to accomplish over an extended period in pursuit of their digital mission.

Many of these priorities coalesce around operational objectives, including back-office support and infrastructure for core business functions such as accounting & finance, human resources, legal, security and risk, and enterprise IT.

Similarly, innovate, scale, and operate priorities refer to a broad area covering large-scale operations, including making, building, and designing activities.

Core business functions comprising this area include supply chain management, engineering, design and research, operations, and manufacturing plant floor operations.

Finally, customer experience is a specific area covering all customer-related functions and related technologies supported by DX. Core business functions comprising this area include customer services, marketing, and sales.

While the back-office support and infrastructure and innovate, scale, and operate priorities will see significantly larger spending totals throughout the forecast, customer experience investments will see faster investment growth.

Investment priorities in APAC

Mario Allen Clement

Mario Allen Clement, a senior market analyst for IDC, DX spending in APJ will reach US$1 trillion by 2025 with a CAGR of 17% over the forecast period.

“Investments continue to accelerate organizations in their digital journey. Focus on customer satisfaction, employee productivity, improving operational efficiency, and innovation are fuelling DX investment within Asia-Pacific excluding Japan. Manufacturing and Government continue to lead the digital growth throughout the forecasted years as a new dawn of smart manufacturing and customer interaction takes centre stage,” he continued.

Robotic, autonomic and client management

The DX use cases – discretely funded efforts that support a particular program objective – that will receive the most spending will be spread across the three strategic priorities.

Investment in robotic manufacturing will grow to $120.6 billion in 2025, followed by autonomic operations and 360-degree customer and client management at $90.9 and $74.7 billion, respectively.

The DX use cases with the fastest spending growth will be virtualized student workspaces (43.8% CAGR), mining operations assistance (39.1% CAGR), and augmented design management (34.5% CAGR). Of the more than 300 DX use cases identified by IDC, only five will have five-year CAGRs of less than 10% over the forecast period.

Industry spending

The industries that will see the largest DX spending throughout the forecast are discrete and process manufacturing, followed by professional services and retail.

Combined, the two manufacturing industries will account for nearly 30% of all DX spending, totalling more than $816 billion in 2025.

The industries that will experience the fastest growth in DX spending over the 2020-2025 forecast are construction (21.0% CAGR), securities and investment services (19.2% CAGR), and banking (19.0% CAGR). All 19 industries covered in the DX Spending Guide are forecast to deliver double-digit growth over the five-year forecast.

Related:  Zoom launches more agentic skills across Zoom Workplace
Tags: constructiondigital transformationIDCmining operationsprofessional servicesrobotic manufacturing
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