Worldwide spending on technologies and services that enable digital transformation (DX) of business practices, products and organizations is forecast to reach more than $1.1 trillion in 2018, an increase of 16.8% over the $958 billion spent in 2017.
DX spending will be led by the discrete and process manufacturing industries, which will not only spend the most on DX solutions but also set the agenda for many DX priorities, programs and use cases.
Discrete manufacturing and process manufacturing are expected to spend more than $333 billion combined on DX solutions in 2018. This represents nearly 30% of all DX spending worldwide in 2018. From a technology perspective, the largest categories of spending will be applications, connectivity services and IT services as manufacturers build out their digital platforms to compete in the digital economy. The main objective and top spending priority of DX in both industries is smart manufacturing, which includes programs that focus on material optimization, smart asset management, and autonomic operations.
IDC expects the two industries to invest more than $115 billion in smart manufacturing initiatives this year. Both industries will also invest heavily in innovation acceleration ($33 billion) and digital supply chain optimization ($28 billion).
Driven in part by investments from the manufacturing industries, smart manufacturing ($161 billion) and digital supply chain optimization ($101 billion) are the DX strategic priorities that will see the most spending in 2018.
Other strategic priorities that will receive significant funding this year include digital grid, omni-experience engagement, omnichannel commerce, and innovation acceleration. The strategic priorities that are forecast to see the fastest spending growth over the 2016-2021 forecast period are omni-experience engagement (38.1% compound annual growth rate (CAGR)), financial and clinical risk management (31.8% CAGR), and smart construction (25.4% CAGR).
“Some of the strategic priority areas with lower levels of spending this year include building cognitive capabilities, data-driven services and benefits, operationalizing data and information, and digital trust and stewardship,” said Research Manager Craig Simpson, of IDC’s Customer Insights & Analysis Group.
The DX programs that will receive the most funding in 2018 are digital supply chain and logistics automation ($93 billion) and smart asset management ($91 billion), followed by predictive grid and manufacturing operations (each more than $40 billion). The programs that IDC expects will see the most spending growth over the five-year forecast are construction operations (38.4% CAGR), connected automated vehicles (37.6% CAGR), and clinical outcomes management (30.7% CAGR).
The use cases that will receive the most funding this year include freight management ($56 billion), robotic manufacturing ($43 billion), asset instrumentation ($43 billion), and autonomic operations ($35 billion). The use cases that will see the fastest spending growth over the forecast period include robotic construction (38.4% CAGR), autonomous vehicles – mining (37.6% CAGR), and robotic process automation-based claims processing (35.5% CAGR) within the insurance industry.