Digital transformation spending flooding across all verticals

Customers are spending more on digital transformation projects but as the channel will know only too well investing alone does not necessarily deliver results.

Figures from IDC have revealed that spending on digital transformation will hit $1.8 trillion this year, an increase of 17.9% on 2018.

That growth is set to continue over the next few years and the money will be flowing across all vertical markets.

"Worldwide digital transformation technology investments are expected to total more than $6 trillion over the next four years," said Eileen Smith, program vice president with IDC's Customer Insights & Analysis group.

"Strong digital transformation technology investment growth is forecast across all sectors, ranging between 15% and 20%, with the financial sector forecast to be the fastest with a compound annual growth rate (CAGR) of 20.4% between 2017 and 2022," she added.

"Digital transformation is quickly becoming the largest driver of new technology investments and projects among businesses," said Craig Simpson, research manager with IDC's Customer Insights & Analysis group. "It is already clear from our research that the businesses which have invested heavily in DX over the last 2-3 years are already reaping the rewards in terms of faster revenue growth and stronger net profits compared to businesses lagging in DX initiatives and investments."

The channel is already experiencing the fruits of that spending but there are warnings that splashing out for technology alone will not necessarily deliver the results customers are looking for.

Many of those working in IT departments are already under immense pressure to deliver change and many feel that they are being set up to fail. That increases the need for a trusted channel partner to step in and reduce the strain and increase the chances of success.

“Digital transformation is essential to every industry: more than half of the listed Fortune 500 companies have disappeared this century as newer, more digitally-driven competitors have taken their place. However, making a success of it is about much more than just investing," said Alex Guillen, Go-To-Market Manager at IT solutions provider Insight UK.

"While $1.2 trillion is a significant sum, organisations can’t simply write a cheque to invest in digital transformation and expect to magically transform. Recent research showed 57 percent of IT teams already believe they are being “set up to fail”, thanks to the pressure to support digital innovation while also maintaining core infrastructure and operations. Organisations must ask themselves how they alleviate this pressure and transform workplace culture and operating models to set themselves up for success," he added.