Markets and Trends

Digital Transformation (DX) – Are Businesses Missing the Mark?

See why a more granular, focused approach to Digital Transformation (DX) is so important.
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Read this blog for an overview on where the conversation surrounding the massive DX Spending trend is taking us — to a more granular and focused discussion, in which the size of the market is far more relevant. Learn why those that speak of DX only in the context of business model change are missing the mark.

IDC recently published its Semiannual Worldwide Digital Transformation (DX) Spending Guide, where we sized multiple DX use cases worldwide across multiple industries. By looking at DX from a use-case perspective, we were able to break down the broader conversation around DX driving business model change to a more granular and focused discussion, in which the size of the market becomes far more relevant.

This was certainly a mammoth task. The most important outcome of the work is that it provided us with the opportunity to look deeper into DX, with a view to making it less of a high-level fad and more about real business change. I caught up recently with Tom Kaneshige from Channel Futures on this topic, and he got me thinking beyond some of the questions he posed. There are so many facets of DX that can be applied to multiple parts of the business, combined and built on top of each other, in order to eventually reap the full results of transformation — redefining how we conduct business, interact with customers, generate new revenue streams, and finally, create those new business models. So those that speak of DX only in the context of business model change are, I feel, missing the mark.

The conversation about what DX is and what it means to a business needs to change, and it is changing. It has shifted from a higher-level focus to a more granular focus on what needs to be done to genuinely transform business, and not only on the process level. 

Craig Simpson, 2018

DX has immense disruptive power. Through the combination of innovation accelerator technologies such as cognitive computing, augmented and virtual reality, IoT, Robotics and 3D printing, coupled with 3rd platform support technologies such as cloud, big data and analytics, mobility and social, businesses can make profound change. We have gone through a fascinating journey at IDC, researching DX and sizing the market globally, and the process has made me realize one very important fact: The conversation about what DX is and what it means to a business needs to change, and it is changing. It has shifted from a higher-level focus to a more granular focus on what needs to be done to genuinely transform business, and not only on the process level.

Augmented reality already has made disruptions in slow-to-change industries such as manufacturing. Operators can now augment shop-floor machinery with an AR overlay to assess performance in real time, which supports faster turnaround time in job changes and greater accuracy. When it comes to maintenance, first-time fixes and greater clarity in operator instructions through augmented overlay all lead to transformative digital experiences in businesses. This can even be taken further by combining cognitive computing capabilities with augmented overlay providing maintenance instructions and self-diagnosis, the result of which is self-healing assets using AR to support operators.

One of my favorite examples of true DX in a business is the MagicBand in use at Disney World Resort in Florida. This IoT breakthrough in the form of a colorful wearable (not unlike a fitbit) gives the user a sole point of commercial interaction across the various entertainment parks — it tracks the rides you have gone on, entertainment visited, food ordered, merchandise purchased, you name it. Disney can track, monitor, and engage with customers in real time in the parks and after their visit with relevant and applicable interaction (additional promotional materials, merchandising, etc.). This is truly a combination of innovation accelerators (IoT and cognitive computing) working with 3rd Platform enabling technologies (cloud, mobility, and big data and analytics) to create the transformative digital change.

I am very excited to see how DX develops in the coming months and years. With worldwide IT spending on DX initiatives forecast by IDC to exceed $1 trillion in 2018, and the net economic value to be many multiples of this figure, DX is and will continue to be at the forefront of change initiatives in business. Those businesses currently embracing DX will sprint ahead of those slow to get on board, with the latter running the risk of failing altogether.

I would love to hear what digitally transformative initiatives are underway in your businesses, and how you see DX affecting your day-to-day life now and into the future.

Learn more about digital transformation and how organizations need toinvest in our new guide, “Excellence in the DX Economy: A Blueprint for Success”:

Research Manager, Customer Insights & Analysis