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IDC: Over half of all ICT investment will be linked to digital transformation

By Ryan Morris-Reade
Fri 29 Oct 2021

For enterprises to compete in a digital-first world, they must prioritise investment in digital tools that will augment physical spaces and assets. 

That's according to new research from the International Data Corporation (IDC), which has revealed its worldwide information technology industry predictions for 2022 and beyond. 

While the disruptive forces unleashed by the COVID-19 pandemic continue to shape the global business ecosystem, IDC says one significant trend remains unchanged: the steady march toward a digital-first world. 

By 2022, the analyst firm expects more than half the global economy will be based on or influenced by digital, as most products and services utilise a digital delivery model or require digital augmentation to remain competitive. As a result, more than half of all information and communications technology investments will be linked to digital transformation by 2024.

"Digital is now a permanent yet dynamic fixture in our world, and the IT and Communications industries themselves will be among the most transformed in the next few years," says IDC VP for worldwide research, Rick Villars.

"CIOs must establish procurement, development, and operations teams that align with as-a-service and outcomes-centric technology delivery models while ICT (Information and Communications Technology) provider's primary task is to help enterprises share, use, govern and increase the value of data."

IDC's FutureScape 2022 research focuses on the social, economic, and technology crosswinds that organisations will need to navigate as they pursue their digital transformation goals over the next three to five years. Adapting to these crosswinds and accelerating digital transformation will ultimately determine an organisation's fate in the digital-first economy.

IDC's top ten worldwide IT industry predictions:

1. Bringing digital-first to customers and operations
By 2024, digital-first enterprises will enable empathetic customer experiences and resilient operating models by shifting 70% of all tech and services spending to as-a-service and outcomes-centric models. These investments will be needed to support diverse customer engagement and data-driven operations models.

2. New fundamentals of the cloud
By 2023, 40% of the G2000 will reset cloud selection processes to focus on business outcomes rather than IT requirements, valuing access to service providers' portfolios from device to edge and from data to the ecosystem. Managing, optimising, and securing diverse cloud resources and data sets will pose the most critical operational challenges for IT organisations.

3. Governance becomes a primary task for IT teams
By 2023, 80% of enterprises will use AI-assisted, cloud-linked governance services to manage, optimise, and secure dispersed resources and data, but 70% don't achieve full value due to IT skills mismatches. Virtually all IT organisations see major barriers to their ability to employ governance-focused automation across their enterprise effectively.

4. as-a-Service delivery becomes pervasive
By 2022, 40% of large enterprises' IT budgets will be redistributed due to the adoption of integrated as-a-Service bundles in security, cloud platforms, virtual workspace, and connectivity. While the benefits of agility, rapid enhancement, and alignment with actual business use are well recognised, IT teams will need to monitor for portfolio inflation constantly.

5. Systemic technology transitions are coming
By 2026, industry leaders facing systemic or mandated transitions in the coming decade triple IT spend for new environments but struggle to achieve the needed 6x gains in IT operational efficiency. IT organisations across many industries are advised to start thinking now about how several systemic changes (i.e., 5G, electric vehicles, blockchain) will influence their organisation's technology plans and priorities.

6. Automate and augment
By 2024, 70% of G2000 will gain twice as much, in terms of meaningful returns, on technology investments that augment employee and customer activities compared to ones that automate individual processes. The most significant gains will come from comprehensive efforts that emphasise augmenting the experiences and decision-making activities of customers, patients, students, and workers.

7. Data stewardship presents challenges and opportunities
By 2025, regional divergences in data privacy, security, and placement/use/disclosure mandates will force 80% of enterprises to restructure their data governance processes built on an autonomic foundation. Successful organisations will use digital sovereignty as a critical spur for new investments in resource or data control planes and target IT automation efforts that reduce trust risks in areas like cybersecurity while also providing a foundation for new customer experiences, employee experiences, and remote operations efforts.

8. Rethinking the digital experience
By 2023, 50% of the G2000 will shift half of their new technology hardware/connectivity spending to modernise and reconceptualise in-person experiences for customers and employees in their own locations. Organisations that deliver digitally optimised experiences to work, play, and health spaces will establish a long-term advantage in capturing and retaining customer loyalty.

9. Sustainability gets real
By 2025, 60% of the G2000 will have digital sustainability teams tasked with assessing, certifying, and coordinating the use of business and IT sustainability data and analytic platforms offered by ICT providers. Over the next few years, new tools, data, and analysis will make it easier to establish meaningful sustainability goals, but how to meet these business and regulatory objectives will remain a challenge.

10. Data controls will be scrutinised
By 2025, public enterprises' valuations will be based as much on confidence in data controls for proper/effective use of data as in financial controls, focusing increased spend on data-centric solutions. IT leaders should prioritise the selection of technology and services partners based on their ability to address the most critical challenges.

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