Digital Tech Spending in India to Grow 2x the Economy in 2024

• 30 Jan 2024
• TM Team
• 0 Comments

 In a recent IDC report, IDC FutureScape: Worldwide Digital Business Strategies 2024 Predictions — India Implications, IDC predicts, spending on digital technology by organizations will grow at 2X the economy in 2024, as companies are compelled by market demands to grow digital business models and strengthen digital capabilities.

Recently, amidst economic challenges, enterprises have seen digital technology as a cornerstone of sustainable growth. The market demands digital experiences in the products and services they consume, putting an emphasis on expanding digital capabilities. Despite inflationary and budgetary pressures, organizations continue to prioritize digital technology. Laggards will accelerate digital technology spending to remain competitive. This trend has led to a significant surge in digital technology spending, outpacing GDP growth in recent years, which will continue in 2024.

According to IDC's India Digital Business Survey, 2023, about 60% of Indian enterprises’ revenue is expected to come from digital business models in the next three years.

Digital disruption has become essential for enhancing customer satisfaction, boosting revenue, and fostering innovation. Take a closer look at IDC's top ten predictions for India’s digital business leaders:

·       Leading Organizational Change in Response to Technology Change: CEOs will play a pivotal role in orchestrating organizational changes by laying emphasis to invest in digital-first initiatives to deliver on digital revenue targets, recognizing that a forward-thinking digital strategy is the cornerstone of sustained growth and competitive advantage in today's rapidly evolving business landscape.

·       Fostering Digital Business Platforms:  The platform-based approach ensures that prior technology investments in building a scalable technology foundation enables leading organizations to scale transformation initiatives and accelerate time-to-market of future use cases to gain competitive advantages over time horizons beyond the current financial year. To gain a distinct edge in the digital business era, organizations must develop platform and data-driven capabilities that scale transformations in business, operating, and organizational models.

·       AI Everywhere Will Supercharge New Digital Business Models: IDC expects that the combination of predictive AI, machine vision, and GenAI capabilities, and the provisioning of on-demand services through digital ecosystems, will take on a new dimension. This will open opportunities to create new products and services for customer segments that will appreciate the appeal of these capabilities. Indian organizations will be increasingly selling to, engaging with, or provisioning on-demand services through digital ecosystems to enable new business models powered by AI everywhere capabilities.

·       GenAI Will Be Used to Innovate: GenAI will be used to codevelop digital products and services by pinpointing market opportunities and allocating company resources. Digital-native businesses will also rely on technology to support their disruptive business models and to create their competitive edge. The companies that utilize GenAI will more efficiently and effectively roll out new revenue-generating endeavors, leading to faster-paced growth that their competitors not using GenAI will struggle to match.

·       CIOs Become Central to Sustainability Initiatives: CIOs are uniquely positioned at the intersection of technological innovation and sustainability initiatives. To meet their sustainability ambitions, Indian organizations' business and IT leaders are committed to allocating a significant portion of their digital tech spending towards sustainability initiatives.

·       Measuring Success Will Require New KPIs: Tracking what is truly relevant to the business is critical for strategic decision making. We expect to see new key performance indicators (KPIs) implemented that reflect a shift toward the creation and delivery of digital products, services, and experiences, which are the defining attributes of a digital business.

·       AI Will Impact Workflows and Drive Employee Reskilling: The wholesale adoption of AI will bring challenges for employees who see their overall workflow and learning process impacted. To mitigate negative impact and drive adoption, employees will need to be reskilled to work alongside GenAI and CIOs need to build a foundation of talent, experience, and training data tailored to their business needs

·       Elevating the Role of Chief AI Officer to the C-Suite: The virality of generative AI has reinvigorated the focus on artificial intelligence across the business and brought it to the forefront of conversations in the boardroom. With many organizations developing their AI strategy and road map, it is becoming apparent that a leader must be appointed to sponsor and drive AI initiatives. As per IDC, it is important to consider a new role like the chief AI officer and elevating that role to the C-suite so that they have both the directive and authority to drive real change.

“To navigate the digital future, CEOs must lead significant organizational transformation with a focus on digital initiatives for sustainable growth. Adopting platform-driven changes and utilizing AI will drive businesses toward a fresh wave of innovation. CIOs, crucial for sustainability, will redefine success metrics in the digital realm, “ says Neha Gupta, Senior Research Manager, IDC India. “Equipping the workforce with new skills is crucial, and the rise of the Chief AI Officer underscores the pivotal role of AI leadership in bringing about transformative shifts at the highest executive levels,” adds Gupta.

“This year’s predictions align with the new trajectory for enterprises and CXOs, adapting to the rapid changes in technology and business models. The predictions are also aligned to IDC’s AI Everywhere narrative and its implications on digital businesses in India,” says Sharath Srinivasamurthy, AVP, Research Group, IDC India. “We will witness an increase in CEO involvement indriving digital strategy and execution, leveraging AI for their business. Hence, CIOs’ and technology leaders’ primary function will shift towards investing in digital-first initiatives to deliver on digital revenue targets,” adds Srinivasamurthy.

Each year, IDC releases its top technology predictions at worldwide, regional, and country level through its IDC FutureScape Reports  and gives a crystal ball view of what is ahead for the rapidly changing IT industry. These predictions have been used to shape the strategies and business objectives of technology leaders and business executives in the next 1-5 years.

Catch an on-demand replay of IDC's 2024 Predictions for Asia/Pacific Excluding Japan that will be available as part of a series of FutureScape webinars addressing the IT Industry, AI and Automation, Digital Business, CIO Agenda, and Emerging Technologies.