Analysts with IDC expect digital transformation spending to continue its growth trajectory, most immediately showing a nearly 18% gain this year to reach $1.18 trillion. Over the next four years, organizations worldwide will spend a total of $6 trillion on digital transformation initiatives, IDC predicts.
“Digital transformation is quickly becoming the largest driver of new technology investments and projects among businesses,” says Craig Simpson, research manager with IDC’s Customer Insights & Analysis group.
Simpson reports that IDC research indicates that organizations that have invested heavily in digital transformation over the last two to three years have earned faster revenue growth and stronger net profits compared to those who’ve lagged with their digital investments. IDC’s latest projections show that autonomic operations, robotic manufacturing, and freight management lead the use cases funded by digital transformation spending in 2019. Extended from now through 2022, the three most heavily funded use cases will be virtualized labs, digital visualization, and augmented design management.
This year the industry pouring the most money into transformative projects will be manufacturing, with IDC predicting $221.6 billion spent by discrete manufacturing firms and $124.5 billion spent by process manufacturers. These companies are most likely to direct spending on smart manufacturing initiatives, along with considerable investments in autonomic operations, manufacturing operations, and quality-related projects.
Retailers, transportation firms, and professional services organizations will closely follow manufacturers as the top industries spending on digital transformation in 2019. IDC believes retailers will focus spend on omnichannel commerce, transportation outfits will target supply chain optimization, and professional services outfits are working on transforming work spaces.
According to Wall Street executives, these are investments that are moving markets. Today Grant Bowers of Franklin Templeton Investments told CNBC that digital transformation stands as a big driver for investment decisions in financial markets at the moment.
“One of the biggest overarching themes we see is this theme of digital transformation,” Bowers says. “This data-centric world is moving out of tech and moving into all of these other industries, transportation, healthcare, consumer.”