Digital Transformation has been the focal point for savvy enterprise C-suites and IT organizations hoping to gain competitive advantages by modernizing their core business processes with technology.
The goal was to become a Digital Business where value creation is based on new processes, products, services, and customer experiences. Now, the Digital Business era is everywhere.
Companies are seeking new digital revenue streams while transforming operations to reduce costs and increase efficiency. For the CEOs at forward-looking organizations, 2024 will be pivotal.
Digital Business Market Development
According to the latest worldwide market study by IDC, spending on digital business technologies is growing while traditional investment is stagnating or even declining.
Demand for digital experiences from customers, employees, partners, and suppliers is pervasive.
"Digital transformation was only the first step -- to truly gain value from change, companies need to move to an innovative state," said Craig Powers, research director at IDC.
Research analysts at IDC expect more organizations to improve their value creation capabilities through 2024 because digital business innovation is increasingly prioritized by the CEO and C-suite.
Next year, all leaders must champion their digital business capabilities. No exceptions.
IDC outlines the external drivers that will alter the global digital business ecosystem over the next 12 to 24 months as enterprise IT teams define, build, and govern the digital technologies required.
IDC's projections for digital business strategies revealed the following:
- Generative AI for Innovation: GenAI will be used to co-develop digital products and services by pinpointing market opportunities and allocating company resources. The companies that utilize GenAI in this way will more efficiently and effectively roll out new revenue-generating endeavors, leading to faster-paced growth that their competitors not using GenAI will struggle to match.
- Pace of Investments in Digital Technologies: Spending on digital technology by organizations will grow seven times faster than the overall economy in 2024, as companies are compelled by market demands to grow digital business models and strengthen digital capabilities.
- Elevating GenAI to the C-Suite: A recent IDC survey found that just over half of CIOs say their organization has or plans to have an individual leader responsible for AI, and approximately half of those CIOs believe the leader will be part of the C-suite executive team.
- Digital Native Businesses Embrace GenAI: Modern leaders rely on technology to support their disruptive business models and to create their competitive edge. These companies will be early adopters of GenAI and will invest heavily to further their competitive advantage.
- Digital Business Platforms Enable Success: New platforms enable greater visibility into a company's operations, allowing for greater insight into the impacts of their investments. As businesses mature digitally, they find measuring ROI to be more straightforward and they are more likely to build leading-edge capabilities that can drive successful digital revenue initiatives.
- AI Will Supercharge Business Models: IDC expects that the combination of predictive AI, machine vision, and GenAI capabilities, and the provisioning of on-demand services through digital ecosystems, will take on a new dimension. This will open opportunities to create new products and services for customer segments that will appreciate the appeal of these capabilities.
- Measuring Success Requires New KPIs: Tracking what is truly relevant to the business is critical for strategic decision-making. IDC expects to see new key performance indicators (KPIs) implemented that reflect a shift toward the creation and delivery of digital products, services, and experiences, which are the defining attributes of a digital business.
- Digital-First Becomes the Investment Priority: CEOs increasingly expect their organization's technology leader to be focused on delivering better business outcomes, increasing business agility, and bringing in new revenue through digital products, services, and experiences.
- AI Workflows Drive Employee Retraining: The wholesale adoption of AI will bring challenges for employees who see their overall workflow and learning process impacted. To drive adoption, employees will need to be reskilled to work alongside the enabling GenAI tools.
- Digital Technologies Become Sustainability Goals: To achieve their ESG ambitions, organizations will require both business and IT leaders to pursue digital technology investments that are twofold: meeting their digital goals while taking sustainability into account.
"Investment in digital business, augmented by GenAI, will continue to drive new models and positive outcomes going forward. Those organizations that have already begun their digital business journeys have seen the value and will continue to invest and innovate," Powers concludes.
Outlook for Generative AI Applications Growth
IDC analysts now believe those enterprise leaders who have delayed digital business implementation and user adoption are at risk of losing significant market share over the next five years.
That said, I anticipate we will see more CEOs invest in GenAI training and coaching for all middle managers who must learn to operationalize these essential new skills and ensure their team's active engagement and adoption. All employees must be enabled to augment their expertise with GenAI.