Cheerful to cloudy - Bitkom industry shows stable growth

These are the key findings of the latest evaluation of market data and economic surveys by the digital association Bitkom. According to Bitkom calculations, industry sales will rise by 2 percent to 170.3 billion euros in 2019.

This even exceeds the already good expectations at the beginning of the year. Bitkom originally forecast sales of 168.5 billion euros for this year.

The Bitkom-ifo Digital Index remained virtually unchanged in July 2019 compared with the previous month at 24.2 points.

"The increasing digitization of the economy, the state and society is driving growth in the Bitkom industry. The crisis in export-oriented industries has not yet impacted IT and telecommunications companies"

says Bitkom President Achim Berg.

The DSAG Investment Report from earlier this year shows that SAP investments in 42 percent of companies will increase disproportionately by 27 percent in 2019.

However, the rate of increase is 10 percent lower than in 2018 (37 percent). A new question this year asked whether the budget for software-supported business processes is provided by and the responsibility of the specialist department.

In 28 percent of cases, the specialist department has the say here. This shows that digitization is shifting responsibility and expertise for mapping business processes to the specialist departments, and with it the budget. In 41 percent of companies, IT budgets continue to lie with IT. They are thus following the classic division of tasks.

Achim Berg appeals to companies and administrations:

"Especially when the economic situation clouds over, companies need to review their processes and business models. They need to become more efficient and thus more competitive and focus on the high-growth digital markets.

It would be fatal to postpone the necessary investments in digitization now. Now is the time to stop talking and start doing. And digitize with all due determination and without any ifs and buts.

The following demands and tasks can be derived from the results of the DSAG Investment Report. There is a need to continue to raise awareness of digitization in companies. Marco Lenck, Chairman of the Board of DSAG e. V.:

"Together with SAP, we want to work on supporting DSAG members with valuable information and assessments on the licensing model, S/4 Hana, C/4 Hana and other solutions that can be used to realize digitization projects."

But: Even if the importance of S/4 Hana continues to grow, the Business Suite is still here to stay:

"SAP customers who can't keep up with the pace of change must not be left behind, for example by a significant functional thinning of Business Suite"

demands Marco Lenck.

"There will still be a long transition period where both solutions will be used."

The digital transformation of the economy is reflected in information technology: The growth of the Bitkom industry continues to be largely determined by information technology.

According to Bitkom's forecast, sales in this largest submarket will rise by 3.2 percent to 93.6 billion euros in 2019. Software will grow the most strongly with an increase of 6.3 percent to 26.0 billion euros.

The market for IT services, including project business and IT consulting, also grew at an above-average rate, increasing by 2.4 percent to 40.9 billion euros.

"IT services are in demand across all industries. Every company needs IT consulting and software solutions when it comes to offering new products and services and optimizing business processes."

says Bitkom CEO Achim Berg. In the IT hardware business, Bitkom expects sales to rise by 1.5 percent to 26.7 billion euros.

The signs point to growth in 2020 as well! According to Bitkom calculations, growth in the overall ICT market will continue in the coming year. However, the forecast of a 1.6 percent increase in sales to 173.1 billion euros is somewhat weaker than for this year.

Mountain:

"At present, everything points to continued growth in the Bitkom industry in terms of sales and employment - despite general economic risks. The Bitkom industry is stabilizing the economy in a turbulent environment.

It drives further growth and ensures that companies in all other industries can maintain and increase their competitiveness."

This makes it all the more important for business and politics to be courageous and committed in shaping digitization in the interests of Germany as a business location.