Dawn of the DX EconomyNew Rules, Roles and Requirements

May 2017

Paris, France

Business Industry EnvironmentWhy it’s different this time.

The Road Ahead?

• Economic Stagnation

• Productivity Challenges

• Emerging Markets?

• Natural Resources Price Erosion

• Euro Crisis

• Brexit

• Migration

• Elections, Populism

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1,6

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ICT Market Growth GDP Growth

Business Market Dynamics in 2017

France WE

Source: Consensus Economics, January 2017, IDC WW Blackbook, 2017

The Relentless March of Technology

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2016 2017 2018 2019 2020 2021

$ T

rillio

n

Overall 2016-2020 CAGR: 6.3%

Innovation Accelerators ICT 3rd Platform ICT 2nd Platform ICT

CAGR 19.8%

CAGR 6.6%

CAGR -6.5%

Source: IDC Worldwide Black Book, 2016

Dawn of the DX Economy

In 2019, worldwide spending on DX initiatives will

reach $2.2 trillion, almost 60% larger than 2016

Speed of

Change

Breadth &

Depth

Process

Impact

By 2020, 40% of the European FT500 will see the

majority of their business depend on their ability

to create digitally-enhanced products, services

and experiences

By the end of 2017, revenue growth from

information-based products will be 2X that of the

rest of the portfolio for 1/3 of FT500

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Average company lifespan on S&P Index (in years)#idcfuturescape

DATA: INNOSIGHT/Richard N. Foster/Standard&Poor’s

75%of S&P 500 will be replaced by 2027

61 years 18 years

1st Platform 2nd Platform 3rd Platform

Massive Digital Disruption

Embracing the Digital Economy

Those Who Thrive in the Digital Economy will the Organizations that….

Can execute upon a vision for digital

transformation

Leadership Transformation

Blend digital and physical

experiences to garner customer

allegiance

Omni-Experience Transformation

Turn information into a competitive

advantage

Information Transformation

Create new digital revenue streams from connected

systems

Operating Model Transformation

Leverage technology to win

the talent wars

Workforce Transformation

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Digitalmasteries

Leadership mastery (Leadership

DX)• CEO must take the DX driver seat

• Vision, Organization structure, Commitment

• KPI: Competitive share in core and new markets

Relationship

mastery (Omni-

experience DX)• DX is a customer-centric

business strategy

• Reach, Relevancy,

Reciprocity

• KPI: Net promoter scoreOperational mastery

(Operating model DX)• Automated and agile processes

• Scale, Scope, Speed

• KPI: Critical process cycle time

Information mastery

(Information DX)• Information is at the core of the DX economy

• Syntax, Semantics, Socialization

• KPI: % of revenue generated from information

Talent mastery

(Worksource DX)• Work optimization and talent sourcing

• Process, People, Culture

• KPI: Best place to work index

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The Digital Economy Requires New Masteries and Metrics

Emerging Digital Leadership

By 2020, one third of CEOs and

COOs of European FT500 companies

will have spent at least 5 years in a

tech leadership role

By 2019, 70% of CIOs will recognize

the limitations of traditional IT and

embrace a leadership approach that

embodies a virtuous cycle of

innovation (L3D)

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of European enterprises will have

dedicated digital transformation or

innovation teams by 2017

80%over

Digital Transformation Developer Teams & Communities

By 2018, enterprises that embrace

DevOps processes and enabling

technology will increase the number

of annual application code releases

by 50%

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Over 1 billion people world-

wide will regularly access

apps, content, and data

through an AR/VR platform by

2021

Experiential Commerce and Customer Engagement

of Consumer-facing European

FT500 companies will

experiment with AR/VR as part of

their marketing strategies in 2017

25%

Data as a Strategic Business Asset – Monetization

of European IT projects will

create new digital services

and revenue streams that

monetize data in a ‘Privacy-

by-Design’ fashion by 2019

40%

By 2020, one third of the FT500 will be

connected to open and automated

information exchanges to enable rapid

provisioning of data services for

governance and product development

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Artificial Intelligence, Everywhere!

Source: IDC Worldwide Cognitive Solutions Spending Guide, 2016

0 5 10

Heath:Diagnosis &Treatment

Manufacturing:Quality

Management

Retail:Automated

Service Agents

Today 2020

73%GROWTH

64%GROWTH

52%GROWTH

Cognitive/AI

Spending:

Select Use Cases$ Billions

of all Digital Transformation

initiatives, and 100% of all effective

IoT efforts, will be supported by

cognitive/AI capabilities by 2019

40%

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By 2018, 60% of CIOs will help drive

risk portfolios that enable adaptive

responses to security, compliance,

business or catastrophic threats

By 2018, 34% of European security

spend will be driven by EU data

protection regulation and privacy

concerns.

Managing Emerging Digital Risks

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Cloud Enters Phase 2.0

By 2020, at least 45% of the

European Enterprise IT

Infrastructure and Software

will be Cloud-centered

(delivered as Cloud services

or enabling Cloud services).

45%

Industry Collaborative Clouds Surge

By end of 2018, the

number of Industry

Collaborative Platforms

(ICP) will triple to more

than 450, of which 35%

will be from Europe

35%

A bright future?

R&D/Innovators stage: now – 2021

Early Adopters stage: 2021-2026

Early Mainstream stage: 2026 -

The Emergence of the 4th Platform

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Augmenting Humanity

The future of our digital senses

Augmented sensing

Embedded/Injectable Tech

MIT and Microsoft research made a „smart” tattoo that remotely controls your phone

Augmented Identity

The U.S. Military is developing brain implants to help restore memory

Augmented memory & cognition

3D printed guides used for complex nerve regeneration may treat spinal injuries

Augmented bio-structure

This $40,000 robotic exoskeleton lets the paralyzed walk

Augmented mobility

By 2020, one-third of health/life

sciences and consumer product

companies will begin to develop the

first wave of products and services

integrating technologies with the

human body

• Inequality, Employment

• Ethics, Humanity

• Security, Privacy

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Steven FrantzenSenior VP, EMEA Region

Phone: +420 2 2142 3140

Mobile:+420 731 503 237

sfrantzen@idc.com

Contact