The Digital-First World is the Era of the Future Enterprise
The world is moving from DX (as we know it) to Digital-First.
DX started with transformation from analog to digital. With contextualization, digital-first becomes the next evolution in DX.
Digital is a permanent, yet dynamic fixture in this world. Digital-first applies to any entity (company, government, consumer, patient, constituent) that is always asking:
“Is there some digital-based capability/enhancement that could improve our lives and desired outcomes?”
and it is not limited to business and economic performance.
Entities and people are more connected, with greater interdependencies in a digital-first world. Entire ecosystems can intelligently leverage data to their advantage because access to digital technologies extends from individuals to organizations, and from governments to societies.
In a digital-first world, we have 3 interconnected pillars:
- Future Societal Structures. Future Societal Structures are digital-first. In such a society, digitalization is spread to the mass population. Its government and public sector entities are influenced by digital in the way they serve the population as well as the policies and investments made to accelerate/prioritize national digital plans. Digital is at the core of how the general population work, play, learn and live.
- Future Enterprises. Future Enterprises are digital-first. The Future Enterprise is IDC’s vision for how organizations must operate and invest to participate in increasingly digital-first markets. It is a framework for fostering a digital-first culture, one that leverages trusted industry ecosystems, generates profitable revenue growth from empathetic customer experiences, and demonstrates an ability to adapt operating models to complex customer requirements. All of this is built on digital infrastructure and enabled by an intelligent, empowered, and well-connected workforce. Direct digital transformation investments will accelerate to a CAGR of 16.5% for 2022-2024, up from a CAGR of 15.4% for 2019-2024. And by 2023, one in two companies will generate more than 40% of their revenue from digital products and services, as compared with one in three companies in 2020. A digital-first enterprise must close the digital value gap which in a digital-first world includes the impact of financials (top and bottomline), ecosystem and sustainability.
- Future Consumers. Future Consumers are digital-first. Digital plays a significant part in the way Future Consumers buy and consume in entertainment, housing, lifelong learning, money, personal mobility, shopping, travel and dining as well as well-being. IDC predicts that by 2022, 60% of silver-generation (>55 years old) consumers who used digital during COVID-19 will remain in digital. By 2024, 45% of younger millennials/older Gen Zers will emphasize 4Cs (conscious, cherished, curated, and careful), shifting toward a purposeful lifestyle, as they take digitally native consumption to the next level.
A digital-first world requires a digital-first economy and the 3 interconnected pillars bring impact to such as economy. A digital-first economy is therefore one where industries, business ecosystems and organizations are influenced by digital in the way they innovate and create/deliver their products/services, empower their employees, engage/serve their customers, collaborate with their partners as well as contribute to the broader society. In this economy, all industries will be driven and shaped by Future Enterprises. By 2022, more than half the global economy is based on or influenced by digital. By 2023, 90% of organizations globally will be prioritizing investments in digital tools to augment physical spaces and assets, and by 2024, 55% of all ICT investment will be linked to digital transformation (DX).
The digital-first world is the era of the Future Enterprise. By 2024, Future Enterprises will enable empathetic customer experiences and resilient operating models by shifting 70% of all tech and services spending to as-a-service and outcomes-centric models.
The technology building blocks of a digital-first world are as follows:
Future of digital innovation: Customer facing-first. By 2022, organizations that allocate 50%+ of their software development projects to customer-facing initiatives will see revenue grow 15% faster compared with those that focus more on internal projects.
Future of industry ecosystems: Cross ecosystem-first. By 2022, 50% of the Fortune 500 will manage the value of shared ecosystem data via KPIs of improved operational productivity, ongoing customer engagement, and skills enhancement.
Future of work: Hybrid work-first. By 2023, digital transformation and business volatility will drive 70% of G2000 organizations to deploy remote or hybrid-first work models, redefining work processes and engaging diverse talent pools.
Future of trust: Unified security-first. By 2023, 55% organizations will allocate half of their security budgets to cross-technology ecosystems/platforms designed for rapid consumption and unified security capabilities to drive agile innovation.
Future of operations: Remote operations-first. By 2023, 40% of G2000 companies will develop all new processes as remote operations first, compared with the very limited number of remote operations processes in 2020.
Future of intelligence: Business value-first. By 2023, 60% of enterprise intelligence initiatives will be business specific, purpose built for business, shortening the data to decisions time frame by 30%, driving higher agility and resiliency.
Future of digital infrastructure: Edge data-first. By 2024, due to an explosion of edge data, 65% of G2000 will embed edge-first data stewardship, security, and network practices into data protection plans to integrate edge data into relevant processes.
Future of connectedness: Pervasive wireless-first. In 2024, wireless first will become mainstream for wide area connectivity, accelerating 65% of enterprise, industrial, and public sector organization investments to “untether” their operations.
Future of customer experience: Augmented personalization-first. By 2026, B2B companies will use AI interactions and analytics technology to deliver deeply personalized journey engagement, eliminating 40% of marketing and sales human touch points.
The IT and communications industries themselves will be among the most transformed as they adopt as-a-service delivery and operating models, deal with radical alterations in ecosystems/value chains, and recognize that their primary tasks are to help CIOs/CDOs, LoBs and their enterprises share, use, govern, and increase the value of data.
As we anchor ourselves in a digital-first world, one thing is clear. Organizations, private or public, large or small, will need to leverage technologies in an accelerated fashion to thrive. The digital-first building blocks set the new benchmarks for enterprises to become truly digital-first. The ones who can close the new digital gap through the greatest business value (financials, ecosystem and sustainability) impact will become market leaders of tomorrow. These leaders are the Future Enterprises.