7 Big Digital Transformation Trends – DevOps.com

By George V. Hulme on

As enterprises continue their rush to digitally transform their organizations, they’re investing big in retooling their software development pipelines, new artificial intelligence (AI) and robotic process automation (RPA) technologies and low-code development platforms, as well as putting considerable money into customer engagement software. Yet, the extent of success following these investments remains unclear and varies significantly from industry to industry.

To shine a light on the digital transformation efforts currently underway, as well as the degree of their success, we’ve collected a number of fascinating trends in the most essential areas of digital transformation.

Investment in AI, Machine Learning and RPA Technologies Hitting an Inflection Point

According to the consultancy KMPG, enterprise investments in AI, machine learning, and RPA will rise to $232 billion by 2025 from $12.4 billion in 2018. “Nearly two-thirds of respondents indicate plans to fully implement RPA within three years. Another 18% plan selective use. As for cognitive automation, nearly half noted intentions to use these approaches at scale within 3 years, while 29% indicated selective reliance on cognitive automation capabilities. Some 10% said they would launch pilots and proof of concept projects,” according to the report.

DevOps is Just Getting Started

While we’ve been writing about the enterprise move to DevOps for years now, the investment in DevOps is just setting itself up to truly soar. According to the market research firm Market and Markets, the DevOps market will grow 24.7% annually, to $10.3 billion by 2023 from $2.9 billion in 2017. “The demand for DevOps solutions and services among enterprises is expected to gain huge traction, due to the increasing need for fast application delivery with high quality,” the firm said.

Digital Transformation Spending to Top $1 Trillion This Year

In research firm IDC’s ” Worldwide Semiannual Digital Transformation Spending Guide,” global digital transformation spending will reach $1.18 trillion this year, rising nearing 18% from 2018. “Worldwide DX technology investments are expected to total more than $6 trillion over the next four years,” said Eileen Smith, program vice president with IDC’s Customer Insights and Analysis group.

For 2019, the two industries expected to invest the most into digital transformation are discrete manufacturing and process manufacturing, which will invest roughly $222 billion and $124 billion, respectively. According to IDC, the top digital transformation spending will be in smart manufacturing, which will be supported by autonomic operations, manufacturing operations and quality. The retail, transportation and professional services industries will follow closely behind.

IT and Business Leadership Chasm Widen

According to research firm consultancy Capgemini, there appears to be a growing disconnect between the CIO and senior business executives. Capgemini’s research found that while in 2012, 65% of organizations believed that the CIO and senior business executives possessed a shared understanding of the role of IT in their organization. In their most recent survey, that figure dropped to 37%. Additionally, Capgemini found, 59% of enterprise respondents in 2012 believed that the CIO and senior business executives had a shared understanding of how IT could be used to increase organizational productivity. That figure also declined precipitously, hitting 35% in 2018.

Low-Code Development Continues to Gain Higher Ground

The demand for enterprise software seems to have no bottom. And no matter how hard they try, developers can’t code software quickly enough. This is why more enterprise software needs are being met by low-code development platforms.

According to research from ResearchandMarkets.com, the global low-code development platform market will grow to about $27 billion by 2022, up from $4 billion in 2017 and at an annual compound growth rate of 44%.

Digital Transformation, Customer Engagement Software Grow

Digital transformations don’t mean much if they don’t reap increased revenue, land new customers and improve relationships with existing customers. And how enterprises engage with their customers is one of the most rapidly evolving aspects of enterprise technology today, from AI and machine learning to IoT devices and ubiquitous adoption of mobile devices. Customer engagement software ranges from staid CRM systems to customer self-service software. This class of software was a nearly $13 billion market in 2017, but will likely reach $22 billion by 2023, an annual growth rate just shy of 10%, according to market research firm Mordor Intelligence.

Digital Transformation Success Grows Harder to Come By

The success rate for digital transformation efforts is persistently, and dismally, low. According to research from McKinsey and Company, over time fewer than 30% of digital transformations succeed.

And that failure rate appears to be growing worse, not better. McKinsey’s 2018 survey results show only 16% of enterprises believe their digital transformations will improve organizational performance over the long term. “Even digitally savvy industries, such as high tech, media and telecom, are struggling. Among these industries, the success rate does not exceed 26%. But in more traditional industries, such as oil and gas, automotive, infrastructure and pharmaceuticals, digital transformations are even more challenging: success rates fall between 4% and 11%,” McKinsey found.

While enterprises are clearly investing into their digital transformation efforts and the desire to succeed is high, the high digital transformation failure rate says enterprises either aren’t taking the right approach to these efforts or they are not executing properly.

Whatever the reasons for the high rate of failure, with the vast amount of business capital on the line and the increasing risks upstart businesses pose to those established in their markets, more enterprises better figure out soon how to get their transformation efforts right.


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