While the World Bank forecasts a third consecutive year of global economic slowdown in 2024, specialized consulting firms in new technologies maintain an optimistic stance.

DC’s Futurescape 2024 report highlights that digital technology spending by organizations worldwide will outpace overall economic growth sevenfold this year.

In the United States, S&P Global anticipates accelerated IT investment, reflecting reduced recession fears.

The rationale behind

During times of macroeconomic uncertainty, it is prudent for companies to invest in digitalization to streamline costs and minimize manual processes.

However, this surge in digital investment is not solely motivated by these factors. Organizations also recognize numerous growth opportunities associated with expanding digital business models and enhancing their digital capabilities.

The Futurescape report highlights that “digital trading platforms offer enhanced visibility into a company’s operations, providing deeper insights into the effects of its investments.”

Consequently, “as companies progress in their digital maturity, they find it easier to measure ROI and are more inclined to develop cutting-edge capabilities that can propel successful digital.”

The influence of Artificial intelligence

Another driving force behind the surge in digital investments is the emergence of generative AI, a trend that Forrester, a prominent IT consulting firm, believes will transition from mere anticipation to tangible projects this year.

According to Forrester’s analysis, 67% of surveyed companies are doubling down on their investment in generative AI within their overall AI strategies, with 70% exploring various use cases under the guidance of their IT departments.

Generative AI is already proving its value across a spectrum of applications. It is accelerating development processes by serving as “co-pilots” in coding and testing tasks. Furthermore, it is increasingly being leveraged in intelligent virtual assistants, providing customers with immersive and highly personalized experiences. This technology also has the potential to enhance sales by recommending products based on individual customer preferences, all within the context of natural language interactions.

Moreover, generative AI finds utility in content creation, document summarization, quality control support, database query simplification, and a host of other functions. The versatility of its applications underscores its significance in today’s digital landscape.

Given its wide-ranging benefits, it’s evident that generative AI is a trend that no company, irrespective of size or industry, can afford to overlook.

New ways to measure success

One crucial factor elucidates why digitalization is outpacing economic growth. Companies that have progressed to advanced stages of transformation tend to command higher market valuations compared to those in the nascent stages of digitalization, rendering them more appealing to equity funds and private equities (PE).

Deloitte’s findings suggest that digital transformation has the potential to yield up to USD 1.25 trillion in additional capitalization. Furthermore, the same report indicates that a mature digitalization process can more than double a company’s market value.

Furthermore, looking ahead, IDC anticipates the emergence of new key performance indicators (KPIs) by 2024. These metrics will signify a shift towards emphasizing the creation and delivery of digital products, services, and experiences—defining characteristics of a digital business.

The importance of strategic partnership

In today’s rapidly evolving market landscape inundated with myriad proposals, having the right support is indispensable for navigating the complexities of digital transformation. This support entails analyzing needs, uncovering opportunities, developing use cases tied to cutting-edge technologies, and executing strategies to yield tangible results.

At Making Sense, we possess the requisite experience and expertise to serve as the trusted partner organizations required to navigate the digital landscape effectively. Our commitment extends beyond mere trend-following; we prioritize sustainable solutions over fleeting fads, ensuring that every investment translates into tangible business value.

In essence, the accelerated growth of digitalization vis-à-vis the economy underscores the abundance of opportunities inherent in emerging technologies, promising to shape the future trajectory of companies. However, realizing this potential hinges on strategic investment decisions and the ability to discern where to allocate resources effectively.