There has been a lot of “hyperbole” (to put it nicely) about digital transformation but IDC recently released its 10 predictions that point to some dramatic results for those responsible for data management as well as for businesses themselves.

There are too many predictions to cover in IDC’s “FutureScape: Worldwide IT Industry 2017 Predictions” report so I will focus on the first three. (But, I highly recommend that you read them all.)

  1. “By 2020, 50% of the Global 2000 will see the majority of their business depend on their ability to create digitally-enhanced products, services, and experiences.” We are seeing this everywhere from “customer intimacy” initiatives, to embedding machine learning into products and services. Data and analytics are being used to digitally enhance what we deliver and how it is differentiated in the marketplace.
  2. “By 2019, 3rd Platform technologies and services will drive nearly 75% of IT spending—growing at twice the rate of the overall IT market.” If anything, this prediction sounds conservative. Some independent analysts say that overall, IT spending worldwide has been essentially flat since 2008. All of the growth is coming from new business-led programs around digitally-enhanced products, services and experience—or what IDC describes as the “DX Economy.” By “3rd Platform” IDC is referring to cloud, big data/analytics, social business, and mobility. This is very similar to the MIT CISR concept of SMACIT: social, mobile, analytics, cloud, and Internet of Things. The details will vary, but some combination of these technologies will form the basis of the platform for digital disruption at most organizations.
  3. “By 2020, 67% of all enterprise IT infrastructure and software spending will be for cloud-based offerings.” This is a pretty aggressive forecast, but we have seen a tipping point in 2016 where businesses, particularly in North America and EMEA have shifted toward cloud applications and analytics.

As an industry, we are seeing a lot of growth and spending in the new areas of:

  • Analytics modernization: Augmenting the current DW/BI environment with cloud data warehouses, big data analytics, and advanced analytics such as predictive and machine learning.
  • Application modernization: Particularly, new cloud applications being implemented, reversing the previous trend toward consolidation on on-premise ERP systems.

Since worldwide IT budgets are growing slowly if at all, we are seeing businesses cutting costs or implementing efficiency measures in other areas to fund these new initiatives. Examples of cost-cutting initiatives include M&A application clean-up, and data warehouse offloading. These types of projects can free up millions of dollars per year in costs.

Data fuels digital strategies

What does this mean for those responsible for data management strategy and direction? Clearly data is the fuel for digital strategies. If you don’t have timely data that you can trust, you are not going to get the business results you paying for. Digital transformation will stress data management in the following ways:

  • Data volume and complexity growth will accelerate.
  • As more data comes from outside of the organization (Gartner estimates 50%), it will be harder to control data structure, data quality, and business context of the incoming data.
  • As data spreads to the cloud it will become even more fragmented and more difficult to manage and govern as an asset that is discoverable and usable across the enterprise.
  • Because of these factors, it will become harder for IT to deliver trusted and timely data, just when the business is depending on data to fuel their competitive strategies.

It’s great to have a vision and strategy for digital transformation, but if you want to be one of the leaders in differentiating your products and services you’re going to need the support of a robust data management platform and architecture. And, as you can see in the three trends listed here, you are going to need a data management architecture than can grow and adapt to rapidly-changing use cases and technologies.