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Main Article: IT (Global Market)
2023: How much companies around the world spend on digital transformation
At the end of 2023, approximately 35.8% of global spending on digital transformation of enterprises will be in the United States. Another 33.5% will be provided by the Asia-Pacific region (including Japan and China), approximately 26.8% - by countries in Europe, the Middle East and Africa. Such data are provided in the IDC study, the results of which were released on November 1, 2023.
 | Digital transformation has taken center stage in Asia-Pacific companies as traditional business models quickly lose popularity. Improved customer experience, innovation, and efficiency lead to strategies that increase both productivity and profitability. The integration of several new technologies, such as cloud computing and artificial intelligence, combined with the need to serve customers in real time, will continue to drive investment in the industry, says Mario Allen Clement, IDC research manager. |  |
The main directions of digital transformation in terms of costs are associated with an increase in the operational efficiency of enterprises. The largest segment is Innovation, Scaling and Operation. It is a vast area covering large-scale operations including manufacturing, construction and design. This includes the means of supply chain management, research, organization of work of production workshops, etc.
The second largest cost segment is Back Office Support and Infrastructure. It includes core business functions such as accounting, finance and invoicing, human resources management, legal law, security and risk assessment, and corporate IT services. Together, these two areas, according to IDC, will account for more than 35% of all global spending on digital transformation in 2023.
Another significant area of investment in digital transformation is customer engagement, which includes all consumer-related functions as well as related technologies. The main business functions in this area are customer service, marketing and sales.
IDC believes that in the period up to 2027, the CAGR (compound percentage CAGR) in the field of digital transformation of enterprises on a global scale will be 16.1%. As a result, the volume of the industry by 2027 will reach almost $3.9 trillion. Among the more than 300 digital transformation investment areas identified by IDC specialists, the fastest growing are mining assistance, robotic process automation-based claim processing and digital twins. The CAGR for these areas until 2027 will be 32.6%, 30.6% and 28.5%, respectively.
Discrete manufacturing is the industry with the largest spending on digital transformation in the entire period under review (until 2027): it will provide approximately 18% of all investments in the world. Some of the key areas include robotic manufacturing, autonomous operations and intelligent warehousing. The next largest industry in terms of digital transformation costs is professional services, where the focus is on improving operational efficiency. The securities and investment services industry will see a CAGR of 21.1% through 2027. This is followed by banking and insurance at a CAGR of 20% and 19.2%, respectively.[1]
2020: IDC: Spending on digital transformation will still grow despite coronavirus
On May 20, 2020, IDC released an updated forecast, according to which the global costs of digital transformation of commercial activities, products and organizations will continue to grow at a high pace, despite the economic crisis and the COVID-19 pandemic.
Analysts clarified that in 2020, according to their calculations, the cost of digital transformation will reach $1.3 trillion, which is 10.4% higher compared to 2019. Compared to growth in 2019, when it amounted to 17.9%, this is still lower, but against the background of the overall reduction in IT costs, the dynamics looks encouraging, experts noted.
| | The costs of digital transformation, like other IT budgets, have been affected by COVID-19, but not so much, since many large-scale projects being implemented or planned play an important role in broader business development programs for enterprises, commented IDC analyst Craig Simpson. | |
The company also updated its forecast for the cost of digital transformation in the 5-year perspective. Compared to the forecast made before the spread of COVID-19, it is worsened by less than 2 percentage points.
In 2020, the smallest increase in digital transformation costs is expected in industries most affected by coronavirus infection. These include: hotel business, entertainment industry, film industry and gambling industry. In these industries, spending growth is expected to be 5.3% versus 18.4% in 2019.
The growth of expenses in the field of discrete production, the costs of digital transformation in which occupy the lion's share of all global costs, in 2020 will be only 6.6%, compared to 14.5% in 2019.
It is expected that the most spending on digital transformation in 2020 will grow in the field of construction and healthcare - by 15.7%.[2]
Notes
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