Digital business is just standard business in 2024.
Companies striving to participate in the digital economy are looking to invest in technology that fits the needs of their company size, employee personas and functions, industry verticals, and current level of technology maturity. Vendors hoping to sell and implement digital technologies need to consider all these factors when meeting with a potential customer. Segmenting and grouping customers by all these factors can help technology vendors provide the best messaging and service.
At IDC, we do research that considers the impacts of all these factors, and that gives us insight behind the tech buying curtain into the needs and wants of buyers at all stages of their digital journeys.
The Small and Medium Business Market
In the recent IDC Webcast, “Behind the Tech Buying Curtain: What Vendors Need to Know,” Katie Evans, IDC Senior Research Director for Worldwide Small and Medium Business Markets, said there are three key topics keeping SMB tech buyers up at night: AI/automation, macroeconomic woes, and heightened security concerns largely fueled by AI, remote work, and the moving to the Cloud.
The forward-looking investment priorities for SMBs are all automation and AI related—process automation, connectivity automation, AI (non-GenAI), and GenAI, according to IDC’s Worldwide Small and Medium Business Survey. Rising energy prices highlight SMB’s top macroeconomic woes in that survey, while implementing technology securely is the largest technology challenge.
Macro Factors Impacting Investment
IDC’s Digital Economy Strategies research, led by Research Analyst Elisabeth Clemmons, focuses in part on the macro landscape impacting businesses, even those focused in specific countries or localities. Impactful events and trends include skills shortages, inflation, supply-chain constraints, energy crises, tensions between countries and war, and elections around the world. These events impact technology buying patterns, causing companies to be more cautious with their investments.
AI is the technology most likely to persevere and be prioritized in the face of these macro impacts, with AI spending, the AI provider supply chain, and the economic stimulus among AI adopters is projected by IDC’s Macroeconomic Center of Excellence to be 3.5% of global GDP by 2030.
The heightened impact of and investment in AI is contributing to two more macro trends impacting businesses: digital regulation and potential raw materials shortages. Data and AI is a top regulatory target with governments taking diverse approaches, while the sheer amount of data in the world is expected to more than triple by 2028—necessitating over 50 times the current annual production levels of neodymium and other critical raw materials.
C-Suite Leaders Increase Focus on AI
Despite any concerns and challenges that AI my pose, CEOs are scaling AI initiatives, dedicating budgets to AI, and ensuring AI projects receive greater visibility, according to Nupur Singh-Adley, Research Manager leading IDC’s C-Suite Tech Agenda research.
As C-suite leaders focus on building digital businesses buoyed by AI technology, they are also mindful of managing risk, including heightened cybersecurity threats and regulations. This is leading to prioritized spending on security, risk, and compliance technologies and greater scrutiny of cybersecurity and risk management at the board level.
Along with considering risk, CEOs are also prioritizing responsible AI while building digital businesses that are focused on trust, critical evaluation of tech vendors, and sustainability.
Digital Capability Perception vs. Reality
While companies of all sizes are facing challenges both internally and externally and they digitize, it’s important for technology vendors to consider that many are also overestimating their digital capabilities. In IDC’s Digital Business and AI Transformation Strategies research, we conduct an annual Digital Business Scorecard that measures the digital capabilities of businesses in four areas: Digital Business Models, Data, Operational Processes, and Organization.
Overall, when asked to assess themselves, 41% of those surveyed in IDC’s Digital Executive Sentiment Survey believed they were a “mostly digital business.” However, when applying our Digital Business Scorecard methodology, which correlates investments and strategies to business outcomes, only 11% of that same survey sample were categorized as “Digital Business Leaders.”
Digital Business Leaders are taking holistic digital strategies and have implemented world-class technology. They view data as a top AI priority while also expanding its use in core operational processes. They have a digital technology architecture that is in lockstep with IT strategy and are focused on improving recruiting and employee engagement.
These are the standards that many of those companies that think they are digital aren’t quite achieving—often finding themselves bogged down by inferior technology, not focusing on capitalizing on the value of their data, not looking to automate and standardize processes, and not taking the view of technology as a competitive advantage.
The Important Role of Technology Vendors in the Digital Economy
Technology vendors are key to digital business and AI transformation strategies—and many companies need vendor expertise and guidance to help them become digital business leaders. Vendor messaging to these companies can be challenging—but it helps to know how company size, macroeconomic impacts, C-suite leadership, and digital capability and perception impacts buying conversations.
It’s helpful for vendors to segment their customers, and specialize their strategy and messaging to those individual segments. That’s beneficial for all parties and will help companies succeed in the digital economy.
Learn what matters most to your customers with IDC’s AI Use Case Discovery Tool—find out more.
