Technology | Media | Telecommunications

Thursday, February 07, 2019

Digital Tech: Line of Business Leaders Drive Change

Across the globe, CEOs and line of business leaders are seeking new ways to adopt business technology that enables digital innovation. However, American organizations are forecast to invest 1.75 times more than European organizations on information technologies (IT) from 2018 through 2022.

According to the latest worldwide market study by International Data Corporation (IDC), China is also set to outpace Europe in key areas of business technology investment.

While European entities will invest more in IT than their Chinese counterparts through 2022, the latter will invest 47 percent more into innovation accelerators.

Digital Business Market Development

"That Europe trails the U.S. in its use of digital technology is often accepted as a given. What's worrisome is the size and potential widening of the gap between the two," says Mark Yates, research manager at IDC. "And, of course, there are companies out there that are able to do more with less or that have not yet pushed their IT systems to their full potential."

And, according to the IDC assessment, there is a great deal that can be done by restructuring the organization and resetting business goals. But so much innovation today depends on the application of cutting-edge technologies, that new spending will almost always be needed to remain competitive.

The most extreme technology example cited in the IDC study is artificial intelligence (AI).

Already used in security, customer service, and e-commerce, AI is being increasingly deployed to improve manufacturing, logistics, staff recruitment and management, and healthcare.


The savvy line of business leaders within forward-looking enterprises consider AI to be crucial for reducing costs, facilitating revenue growth, and improving customer experience. That said, AI is dominated by American organizations, which are expected to invest more than 4.5 times more than those based in Europe from 2018 to 2022.

The largest spending area cited in the study is the Internet of Things (IoT), where total spending is around 16 times higher than for AI, mainly because the immediate benefits are usually more apparent on balance sheets and cash flow statements.

Once again, IDC reports that both U.S.-based and China-based enterprises are forecast to invest more both in absolute terms and as a percentage of GDP through 2022.

"It's important to recognize that European goods and services are still in high demand," says Marc Dowd, principal client advisor at IDC. "Many European enterprises, especially in Central and Northern Europe, have done an exceptional job of streamlining operations, innovating new business, and maintaining high standards without a lot of cutting-edge technology."

Outlook for Digital Innovation Growth in Europe

However, IDC analysts believe that won't last. Whether deployed via the public cloud or on-premises systems, ERP and CRM solutions are essentially commodities. So too are a lot of IT tools used to ensure quality.

Therefore, the IDC study findings suggest that European firms will need to up their business technology game considerably over the next few years if they wish to stay competitive with global counterparts.