In for a bumpy ride: IDC tips major digital disruption by 2020

IDC says that, by 2020, half of the New Zealand Stock Exchange listed organisations will see the majority of their business depend on their ability to create digitally enhanced products, services, and experiences

IDC says that, by 2020, half of the New Zealand Stock Exchange listed organisations will see the majority of their business depend on their ability to create digitally enhanced products, services, and experiences.

Louise Francis, senior research manager, IDC New Zealand says that, by 2020, a digital transformation economy will have emerged as digital transformation reaches macroeconomic levels.

“It is no longer enough to make piecemeal investments in digital transformation,” Francis says. “To succeed, every enterprise that wants to grow must become a ‘digital native’. From the board level through to the C-suite, organisations must be prepared to think and act digital when the digital transformation economy emerges in 2017.”

The forecast is one of several around digital transformation contained in IDC’s predictions for New Zealand IT, which are part of the IDC FutureScape: Worldwide IT Industry 2017 Predictions. IDC is also predicting that what it calls the third platform IT technologies — cloud, social, mobile and analytics — will drive over 75 percent of NZ IT spending, growing at twice the rate of the market.

By 2020 IDC expects 50 percent of all NZ enterprise IT infrastructure and software spending will be for cloud-based offerings. “The cloud will morph to become distributed, trusted, intelligent, industry-focused, and channel mediated,” IDC says. And it expects significant growth in intermediaries, saying that, by 2020, over 50 percent of NZ cloud services providers’ revenues will be mediated by channel partners/brokers.

To manage and drive this digital transformation, IDC expects that by the end of 2018, over 50 percent of NZX-listed organisations will have dedicated digital transformation/innovation teams.

These teams will be under pressure to deliver the digital transformation goods. “By 2020, all NZ enterprises’ performance will be measured by a demanding new set of digital transformation-driven benchmarks, requiring 40 percent – 60 percent or better improvements in leadership, customer engagement, digital offerings, efficiency and agility KPIs,” IDC says.

However, Shane Minogue, senior telecommunications analyst, IDC New Zealand, warns organisations against becoming too focused on the technology of digital transformation.

“The key to digital transformation is customer-centricity, and while the technology aspect is important it will be the prioritisation of customers that creates a meaningful difference to future businesses ability to thrive in the DX economy," he says.

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