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Transformation Goals as a Service

While the disruptive forces of the Covid 19 pandemic continue to shape global business, one important trend remains unchanged: the steady evolution toward a digital-first world.
E-3 Magazine
15 February 2022
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This text has been automatically translated from German to English.

IDC predicts that by 2022, more than half of the global economy will be fully digital or influenced by digitalization, as most products and services will be delivered digitally or require digital augmentation to remain competitive. To do so, companies will need to prioritize their investments in digital tools to augment their physical products and offerings. As a result, by 2024, more than half of all information and communications technology (ICT) investments will be linked to digital transformation.

"Digitization is an integral but dynamic part of our world today. The IT and communications industry itself will be among those undergoing the most change over the next few years. CIOs will need to build procurement, development and service teams that align with as-a-service and outcome-based technology delivery models. The main role of ICT vendors, on the other hand, is to help companies add value to their data, process it, use it and share it" said IDC Group Vice President for Worldwide Research, Rick Villars.

IDC's 2022 study focuses on the social, economic and technological currents that companies will need to navigate over the next three to five years as they pursue their digital transformation goals. The ability to address these forces and accelerate digital transformation will ultimately determine a company's success in the digital-first economy.

By 2024, digital-first companies will shift 70 percent of all technology and service spending to as-a-service and outcome-based models to delight customers and make operations more robust. These investments are needed to implement different customer engagement models and data-driven processes.

By 2023, 40 percent of G2000 organizations will reengineer cloud selection processes to focus more on business outcomes (and not just IT requirements). They will look more to edge computing from service providers and focus more on overall systems (and not just individual data). Managing, optimizing and securing various cloud resources and data will be the biggest challenges for IT organizations in IT operations.

AI-powered services

Also by 2023, 80 percent of enterprises will use AI-powered, cloud-linked control mechanisms to manage, optimize and secure distributed resources and data. But 70 percent are not taking full advantage of the opportunities due to a lack of IT skills. Virtually all IT organizations see great difficulty in effectively deploying governance-focused automation across their enterprise.

As-a-service is catching on, and by 2022, 40 percent of large enterprises' IT budgets will be reallocated due to the adoption of integrated as-a-service applications across security, cloud platforms, virtual workplace and connectivity. While the benefits of agility, near-term optimization and alignment with current business goals are recognized, IT teams must constantly contain portfolio proliferation.

Efficiency increase

By 2026, industry-leading companies facing systemic technology transitions over the next decade will triple their IT spending on new technology environments. However, they will struggle to achieve the six-fold IT efficiencies needed to do so. IT organizations in many industries should be thinking now about how multiple systemic changes will affect their company's technology plans and priorities.

By 2024, 70 percent of G2000 companies will see double the returns on technology investments that augment employee and customer activities, not just automate individual processes. The greatest gains will come from enhancements to customers, patients, students and employees that place particular value on supporting decision-making processes and product use.

By 2023, 50 percent of G2000s will shift half of their spending to new hardware and connectivity to reimagine and modernize employees' personal environments and customer experiences. Companies that enable digitally optimized experiences for work, play and health situations will gain a long-term advantage for building and sustaining lasting customer loyalty.

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