Global spending on the digital transformation (DX) is forecast to increase at 17.6 percent to $1.8 trillion in 2022.
Worldwide digital transformation spending will sustain this pace of growth over the 2022-2026 forecast period with a five-year compound annual growth rate (CAGR) of 16.6 percent, IDC report said.
As organizations accelerate their pursuit of a digital-first strategy, they are channeling these investments into both internal operations and external direct engagement. The investments in internal operations are largely focused on improving efficiency and resilience while customer experience transformation has become a DX priority for many companies, said Craig Simpson, senior research manager, Customer Insights & Analysis at IDC.
Back Office Support and Infrastructure, Smart Manufacturing, and Digital Supply Chain Optimization will represent more than $620 billion in DX spending this year.
Customer experience investments, such as Omni-Experience Engagement, and Omni-Channel Commerce, will account for more than $300 billion in DX spending in 2022.
The DX priorities that will experience the fastest spending growth over the five-year forecast include narrowly focused priorities like Frictionless Insurance (27.4 percent CAGR) and Legal (27.0 percent CAGR) as well as operational priorities such as Enterprise and Resource Management (26.0 percent CAGR).
The discrete and process manufacturing industries will account for nearly 30 percent of worldwide DX spending this year, followed by the professional services and retail industries. The utilities and banking industries will also see DX spending of more than $100 million this year.
The financial services sector will deliver the fastest DX spending growth over the 2022-2026 forecast period, with the securities and investment services, insurance, and banking industries all forecast to have five-year CAGRs of 19 percent or more.
The United States will be the largest geographic market for DX spending in 2022, accounting for nearly 35 percent of the worldwide total. Western Europe will be the second largest region for DX spending, followed closely by China. China will also deliver the strongest growth in DX spending with a five-year CAGR of 18.5 percent. Latin America will be the region with the second fastest growth with a CAGR of 18.2 percent.
Digital transformation spending in EMEA will be nearly $469 billion in 2022, an increase of 16.7 percent over 2021.