Global business approaches digital transformation 'tipping point'

New research from IDC and Micro Focus forecasts that global business is approaching a digital transformation tipping point.

Monday, 30th March 2020 Posted 4 years ago in by Phil Alsop

By 2023:

50% of global IT spending will go into DX
46% of global GDP will be driven by digitally-transformed businesses
65% of businesses are expected to modernise systems of record
66% of businesses are expected to be beyond the pilot stage of Artificial Intelligence and Machine Learning usage

While DX has at times been seen as something of a buzzword for IT, it is now regarded by most organisations as an essential business mandate and will soon become the default operating mode. With the data being created globally growing at a CAGR of 25.8%, businesses pursuing DX are developing systems to manage and exploit the opportunity: modern systems of record to ensure that data is accessible and AI/ML to efficiently utilise it.

The new competitive advantage identified by this research is found in turning data into intelligence through a digital transformation platform which underpins all business systems. This stands in contrast to existing DX approaches which address specific functionalities. By 2025, it is expected that 80% of organisations will measure customer outcomes in terms of their interaction with a whole ecosystem, taking the strength of information flow through the network into account.

The key differentiator for businesses in this landscape, according to Joe Garber, Global Head of Strategy & Solutions at Micro Focus, will be ‘digital determination’: the capacity and dedication to see through end-to-end DX projects. “Although core business systems are the lifeblood of the organisation, only five percent of the organisations we studied have built enduring strategies of DX success. Rather than adopting a rip-and-replace strategy that can yield unacceptable risk, we are seeing that most businesses need to instead pursue an assertive modernisation strategy.”

While DX is rapidly becoming the new norm, only 5.1% of the organisations studied had already realised sustainable performance excellence competencies around new digital technologies and business models. ‘Businesses cannot afford the risky and time-consuming proposition of digitally transforming from scratch,’ continued Garber. “They need to run and transform at the same time. We expect that this will not be a transition stage, but the way that IT will continue to operate - and getting to that point demands determination.”.