More Than 95% of Indian Organizations Plan to Increase DX Spending in 2023: IDC Reports

More Than 95% of Indian Organizations Plan to Increase DX Spending in 2023: IDC Reports

Digital transformation (DX) and IT modernization have been at the top of the mind of Indian organizations even before the pandemic. The pandemic era resulted in myriad disruptions and forced organizations to disrupt or get disrupted. During the pandemic digital transformation aided Indian organizations to survive the challenges and sustain competition. The lockdown and remote working forced organizations to charter the course for digitization efforts.

International Data Corporation’s (IDC) India Digital Transformation (DX) Survey conducted in 2022 across 504 IT decision-makers of Indian organizations validates this trend. According to this survey, for 2022 and 2023, about 3/4th of the respondents indicated that they plan to spend more than what they have spent for DX initiatives in 2021, and another 20% of the respondents to maintain the same level of DX spending as in 2021. Overall, IDC estimates the DX spending in India to reach USD $85 Billion by 2026 as per IDC's Worldwide Digital Business Spending Guide, October 2022 release.

The DX use cases are diverse and active across different industries in India. According to IDC research, manufacturing (discrete and process), professional services, banking, government, retail, and telecommunications are the top industries spending on DX in India. Indian organizations are gravitating towards the cloud, automation, artificial intelligence (AI), network infrastructure, Internet of Things (IoT), and other advanced technologies to transform organizations digitally. Through tech-enabled digital transformation, Indian organizations expect to reduce costs by increasing efficiency, improving security/risk capabilities and improving customer experience.

"Digital transformation has been a buzzword over the last few years among all industries and organizations of all sizes. The purpose of digital transformation is long-term survival and staying relevant by building resilience and adaptability in the organization. DX is all about embracing the right technologies; combined with people, processes, and operations that give organizations the ability to evolve and respond in the best possible way to unpredictable and dynamic market conditions," says Neha Gupta, Senior Research Manager, IDC India.

Investments aside, the most demanding part of the digital transformation journey is to ensure that the outcomes are measurable. Indian organizations are seeing the real benefits of DX initiatives in terms of revenue generation, time to market, and business agility. As per IDC's Future Enterprise Resiliency & Spending Survey wave 4, June 2022 (India n=50), Indian organizations are experiencing around 1/3rd of annual percentage improvement in 2021 across various aspects (revenue, operational efficiency, customer satisfaction, among others) because of DX investments.

Organizations are also partnering with managed service providers (MSPs) to better manage their DX journey. MSPs, especially the ones with consulting capabilities, support different delivery models (CPE, hosted/cloud), and customization ability will be preferred partners as Indian organizations move towards their DX goals.

Current macroeconomic factors may impact both tech buyers and tech suppliers globally. As per IDC's research, Indian organizations are not immune to these macroeconomic trends and thus strive to be proactive than reactive.

"The current headwinds such as IT supply chain disruptions, inflation, and global geopolitical issues, are likely to persist. Indian organizations must look at these factors as enablers of Digital Transformation. Taking aid from technology to save costs and remain competitive in these uncertain times will make them resilient and keep them ahead of the competition," says Rithika Ponnala, Senior Market Analyst, Digital Transformation practices, IDC India.

The above has been published in the recent IDC market presentation, Stage of Digital Transformation Adoption in India: Enterprise and Industry Priorities and Focus Areas for the Next 12–18 Months, #AP48914322. This IDC report summarizes Indian organizations' DX motives, DX spending plans, case studies, challenges, adoption trends, expected benefits, and strategic priorities. The IDC document dives deep into industries that spend significantly on DX and provides recommendations for both tech buyers and tech suppliers.

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