Last year we predicted that “70% of CEOs of large European organizations are motivated to generate at least 40% of their revenue from digital by 2025, generating over €4 trillion in gross value added (GVA) in Europe.”
Do we expect this to change as we head into 2023?
If possible, the trend has accelerated. According to IDC’s Digital Executive Sentiment Survey (October 2022), European organizations expect on average more than 50% of their revenues to come from digital business models in the next 3 years.
Listening to C-level executive priorities for the coming year, despite the poly-crisis macroeconomic scenario, it is clear that the C-suite remains optimistic about future digital investments and views technology as a critical business differentiator to deliver better business results and increase sustainability. , and accelerating revenue growth. “Our priority over the next 6 months will be building capabilities, including bringing people on board to help us build digital products,” said the transportation company’s chief innovation officer.
It is the dawn of a new digital decade, which we call the digital business era. However, what is clear is how it becomes less clear.
Especially in Europe, there is a need to combine technology investment and revenue generation. The majority – 61% of European organizations – see a too lax and disconnected approach to software projects. This leads to one-off or reactive software update efforts that occur only in response to immediate market or customer demand. Often these actions do not have a positive impact on generating income.
To succeed as a digital business, we believe that companies must use a digital business platform. At IDC, we define a Digital Business Platform as a multi-layered enterprise technology architecture that integrates disparate systems and applications to enable use cases that drive business competitiveness and innovation. Only 13% of European organizations have such an architecture (IDC’s Digital Executive Sentiment Survey, October, 2022).
The platform can be divided 3 main layers:
- Basic IT. These are basic technological building blocks creating the core technology layer needed to deliver digital products and services. It covers 12 key elements: APIs, Information Systems, Automation and Orchestration Capabilities, OT Technologies, Microservices, Programmable Infrastructure, Multi-Cloud Services, Security, AI/ML and other emerging technologies (e.g. Blockchain, AR, VR, Robotics, Edge. .), Integration Tools and Networking and Communication. In some digital design principles and practices The CIO must lead the mission to implement the right digital architecture.
- Use cases of technology to improve business sustainability. These are specific digital products that enable a company to remain competitive in the market while responding to the core business challenge of building sustainability. This includes use cases for future business, organizational and operational models such as supply chain contingency planning or customer spend analysis.
- Use cases of technology to accelerate business growth. Use cases to accelerate growth and innovation, including ecosystem data monetization and M&A smart modeling.