The COVID-19 pandemic has dramatically accelerated consumer and business shifts toward online platforms and digital interactions, making Digital transformation (DX) essential for companies worldwide. Also, as remote work became the norm, organizations needed to evolve to manage their distributed workforce effectively.

Companies swiftly adapted to new digital methods. The reason lies in recognizing the immense potential of digital technologies to drive growth and innovation. In fact, DX enables businesses to innovate faster through data analytics, AI, etc. In this era of significant change, understanding digital transformation statistics and trends is crucial for businesses to stay ahead.

In this article, you will find data-driven insights into DX. Find out more about strategies that leading companies are employing to succeed.

 

Key Digital Transformation Statistics

  • 90% of businesses are engaged in digital initiatives, showcasing a widespread digital transformation priority.
  • 40% of organizations have scaled their DX projects by increasing the use of technology, budget, etc.
  • 66% of enterprise organizations (with over 1,000 employees) and 49% of small businesses (less than 1,000 employees) have adopted a digital transformation strategy.
  • The global digital transformation market was valued at USD 731.13 billion in 2022, with a projected CAGR of 26.7% from 2023 to 2030.
  • 84% of businesses are exploring or currently using AI and machine learning for digital-first initiatives such as AI communication or implementing remote-first workspace.
  • In 2022, global spending on digital transformation reached USD 1.6 trillion.
  • Between 70% to 95% of DXs fail to meet objectives.
  • 74% of workers report their business has a fully implemented Digital Employee Experience (DEX) strategy.
  • In the US, 55% of employees prefer to work remotely at least three days a week.
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Digital Transformation Market and Spending

Dive into the evolving landscape of the DX market. Understand how much money companies that focus on digital transformation spend. Read on to explore comprehensive insights and prepare your strategy for the digital era.

  • 1. The global digital transformation market was valued at USD 731.13 billion in 2022, with a projected compound annual growth rate (CAGR) of 26.7% from 2023 to 2030.
  • 2. Based on the solution, the analytics segment dominated the digital transformation market with over 30% share in 2022.
  • 3. According to digital transformation reports from Grand View Research, professional services accounted for 74.8% of the market revenue in 2022.
  • 4. Based on deployment, the market is divided into three segments - hosted, cloud, and on-premise solutions. The latter held a significant market share of 51.1% in 2022.
  • 5. North America led with a 43.2% revenue share in the digital transformation market in 2022. The main reasons behind this fact are different online payment modes (credit and debit cards, e-banking, e-wallets, mobile payments, etc.) and cloud computing technologies being adopted.
  • 6. The United States will own 35.8% of worldwide digital transformation spending in 2023. The Asia/Pacific region, with countries like Japan and China, will fall shortly behind with 33.5%. The Europe, Middle East, and Africa (EMEA) region will account for 26.8% of DX spending this year.
  • 7. Global spending on digital transformation reached 1.6 trillion U.S. dollars in 2022.
  • 8. Worldwide digital transformation spending is expected to reach $3.9 trillion by 2027, with a five-year CAGR of 16.1%.
  • 9. The average cost of digital transformation is $27.5 million for large enterprises. The budget is spent on technology infrastructure such as hardware and software, employee upskilling, etc.

Digital Adoption Trends

Discover the essentials of digitalization in business. Read on to learn how companies are embarking on DX initiatives.

  • 10. An impressive 90% of businesses are now pursuing digital initiatives.
  • 11. DX projects have been scaled by 40% of organizations. One of the ways to do so is by increasing the use of technology, budget, etc.
  • 12. A notable 89% of board directors integrate digital business in all of their growth strategies.
  • 13. Only 35% of board directors have already achieved or are going towards reaching digital transformation goals.
  • 14. Among large enterprises with more than 1,000 workers, 66% have embraced a digitalization plan, with 29% planning to do so.
  • 15. In smaller businesses with less than 1,000 employees, 49% have adopted a digital-first strategy, while 41% are planning towards it.
  • 16. 57% of businesses focus on digital strategies to enhance employee productivity, especially in hybrid work settings, up from 44% in 2021. 50% of respondents also aim at cost and inefficiency reduction, up from 38% last year. Among other goals are better customer experiences (45%), business agility or resiliency (41%), or security improvement (40%).
  • 17. Only 7% of organizations have no digital-first strategy. The main reasons are skill shortages, lack of executive support, and budget constraints.
  • 18. One in four organizations (25%) have a clear digital or workforce strategy roadmap.
  • 19. Organizations focus on data management (42%), data security (41%), and change management (41%) in their digital strategies. 38% of companies are still developing the success measurement metrics.

digital transformation statistics Strategies companies focus on to become a digital business

  • 20. Digitalization facts show that top-performing companies in terms of DX often have their initiatives led by the CEO (33%). Less digitalized businesses usually have a chief information officer (CIO) or chief technology officer (CTO) (36%) leading these strategies.
  • 21. 57% of organizations report that digital transformation was more impactful on the workplace than physical or cultural elements (38% and 15%, respectively).
  • 22. 37% of companies are 12 to 24 months into executing digital transformation. Per Prophet’s digital transformation statistics, 29% are less than 12 months in.
  • 23. Most companies (70%) adopt a comprehensive approach to DX. Specifically, they coordinate the efforts of several departments for a similar level of digital fluency and technology.

Digital Transformation Stats on Company Priorities and Goals

Discover what drives companies in their DX journey. This section reveals their top priorities and goals, from core business growth to innovation. Gain insights into things successful companies are focusing on.

  • 24. Core business growth (46%) tops digital transformation goals for companies in 2023. Innovation (45%) and efficiency (42%) follow closely.
  • 25. In 2023, operational efficiency and technology innovation are the most prominent global digital transformation use cases. In combination, they account for 35% of all DX spending.
  • 26. Upgrading technology (50%), achieving operational efficiency (34%), and gaining more value from data (32%) are transformation priorities.
  • 27. Companies that are top-performing in digital transformation measure their success of initiatives through innovation (36%), e.g., new products created, ideas generated, etc. The second-placed metric is digital literacy (32%), e.g., educated workforce, capabilities assessment, etc. Efficiency (40%), e.g., productivity, gross margin, etc., follows tightly.

Difficulty of Digital Transformation

Facing challenges in digital transformation? Understand why up to 95% of digital transformations fail. Also, let’s dive deeper into common obstacles businesses encounter.

  • 28. 87% of leaders acknowledge digital disruption in their industries. However, only 44% feel prepared for it.
  • 29. According to Prophet, limited budgets (34%) are the top obstacle to the success of digital transformation. Change resistance (27%), e.g., sabotage, fear, holds the second place in the list.
  • 30. 45% of small and medium businesses (SMBs) encounter budget limitations (35%) as a major challenge in digital strategy execution. 35% of them also deal with competing priorities (35%) and the staff’s insufficient IT skills (34%), according to Foundry’s digital transformation statistics.
  • 31. The digital transformation failure rates vary between 70% to 95%. The average value is 87.5%.

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Digital Transformation Statistics on Business Process Transformations

From artificial intelligence to hyper-automation, get up-to-date with digital transformation approaches. Explore this section to learn more about the best use cases!

 

Emerging Technologies and Investment Trends

  • 32. 84% of organizations are exploring or using artificial intelligence (AI) and machine learning (ML) for digital-first business.
  • 33. 70% of chief information officers (CIOs) recognize Generative AI as a main digitalization trend. Currently, 55% of CIOs are planning its deployment in two years, and 9% have already started using it.
  • 34. 52% of companies allocated more than 5% of their budget for digital initiatives to AI in 2022, up from 40% last year. 63% of respondents had expectations of increased investment over the next three years.
  • 35. Future digital transformation trends for 2024 include Generative AI (GenAI), Risk and Security Management (TRiSM), and industry cloud platforms (ICPs).
  • 36. Due to digitalization, 29% of organizations report that they have created a data security strategy in 2023. 41% are currently in the development process, and 23% are only at the planning stage.
  • 37. By 2025, 80% of organizations will include hyper-automation (business optimization using AI, ML, and software robot utilization) in their digital transformation plans.
  • 38. Cloud technology is a top technology choice for innovation, optimized digital experience, and net-zero goal achievement (23%). Digital trust follows closely (22%), with business intelligence platforms (20%) as a third-placed option.
  • 39. 74% of chief supply chain officers (CSCOs) stress the importance of hybrid cloud integration in supply chains’ digital transformation. This technology leads to higher efficiency in tackling challenges, according to 95% of CSCOs. Moreover, 40% stated that it helps to make demand predictions more accurately. 44% also mentioned that it leads to improved asset allocation, and 10% said it decreases structural costs.

 

Workplace Transformation and AI

  • 40. Companies report that continuous digital learning (22%) and flexible leadership (22%) are crucial for innovation and digital experience.

digital transformation statistics best DEX practices

  • 41. 84% of organizations believe digital workplace transformation enhances productivity and customer experience.
  • 42. 60% of HR leaders utilize AI to support employees.
  • 43. Only 12% of personnel managers anticipate AI replacing employees.
  • 44. Approximately 44% of skills will need updating due to AI sustainability and deglobalization. Individuals will have to pay attention to analytical thinking and creativity the most. Technology literacy, lifelong learning, and flexibility follow closely. Manual dexterity and sensory processing (vision, hearing, touch, taste, smell) will be in less demand.
  • 45. By 2030, digitization, robotics, and AI advancements may impact career changes for 14% of the global workforce.

 

Digital Employee Experience (DEX)

  • 46. 74% of knowledge workers (from any non-IT function and seniority level) report a fully implemented DEX strategy.
  • 47. 67% of employees find their digital experience in their personal lives better than those of the workplace.
  • 48. 86% of IT decision-makers (ITDMs) believe DEX influences organizational revenue. Workers can use technology to notice and avoid issues more easily, make data-driven decisions, etc., thus increasing profits.
  • 49. As stated in 1E’s digital transformation statistics, 91% of ITDMs see DEX as crucial to operational efficiency.
  • 50. The main challenges to DEX include security/regulatory policies (37%) and IT being overwhelmed due to outstanding problems (37%).

digital transformation statistics challenges to the employee’s digital experience

  • 51. 46% of employees face rising IT costs due to digital friction (e.g., problems with running applications, PCs crashing or running slowly, disruptive software, etc.).
  • 52. Automation leads to benefits like higher productivity (41%) and better relationships between IT and non-IT staff (41%). The top benefits are improved IT responsiveness (55%) and cost efficiencies (46%).
  • 53. According to 1E’s digital transformation statistics, 49% of ITDMs prioritized efficiency in resolving issues as their top DEX goal by mid-2023.
  • 54. In the US, 55% of employees prefer remote work for at least three days a week due to DX.

Digital Transformation Statistics on Customer Relations

Discover how digital transformation is reshaping interactions with clients. Learn about the integration of AI and how many businesses are creating comprehensive digital customer journeys to enhance the overall experience.

  • 55. 63% of customers are satisfied interacting with bots, with human assistance as a fallback.
  • 56. 37% of companies have mapped a unified digital customer journey and are actively using it to enhance customer experience. This strategy implies that employees from different departments – marketing, sales, customer service, etc., - track every online interaction, from the awareness to the post-purchase stages. Then, the teams use all the data to create personalized messages, experiences, and even products.

Digital Transformation by Industry

From retail’s surge in data analytics investments to the construction sector falling behind, each industry has a unique transformation story. Read more to understand the digitalization trends.

  • 57. Retailers are significantly investing in technology. Precisely, 63% expect to increase their spending on business intelligence and data analytics. 35% plan to invest more in artificial intelligence.
  • 58. The construction sector remains one of the least digitalized industries. In Europe, it is at the bottom of the digitalization index, and in the United States, it ranks above only agriculture.
  • 59. In 2023, the financial services industry is leading the way in AI use cases, with over 30% of respondents utilizing this technology in product development.
  • 60. 61% of healthcare organizations point out improved patient outcomes as the most important reason for DX investment. Cost of care reduction holds the second place with 23%.
  • 61. At the beginning of 2023, 42% of manufacturers reported that they did not have a digital transformation strategy.
  • 62. 81% of U.S. middle-market banks (with USD 250 million to USD 39.9 billion in assets) have a digital strategy. Half of them dedicated 11% to 20% of their revenues to DX initiatives, and 12% budgeted from 21% to 30%.
  • 63. By 2025, the online education market will be estimated at USD 350 Billion.
  • 64. In 2022, the Digital Fitness & Well-Being market’s revenue reached USD 17.60 billion. From 2023 to 2028, it is expected to show an annual growth rate (CAGR) of 5.53% with a volume of USD 25.22 billion.

digital transformation statistics Digital Fitness & Well-Being market’s revenue, in billion USD

Digital Transformation and the COVID-19 Pandemic

COVID-19 has accelerated the pace of digital transformation globally. Read the section below to discover how businesses have adapted their strategies to these changes.

  • 65. Prior to the pandemic, 23% of companies were entirely non-digital, as specified by HBR.
  • 66. 97% of businesses report accelerated DX initiatives due to COVID-19. According to Twilio’s digital transformation statistics, the pandemic has accelerated companies’ progress by an average of 6 years.
  • 67. Due to the pandemic’s consequences, global digital transformation expenditure in logistics is projected to reach $84.6 billion by 2027.

Key Takeaways from Digital Transformation Statistics

The digital transformation statistics above show that the DX market is estimated to grow further. Key areas like AI, machine learning, and cloud computing will be at the forefront of the change.

At present, businesses face multiple challenges, especially budget constraints and change resistance. Still, digital transformation results in the potential for improved productivity, customer experience, and operational efficiency, driving companies worldwide to embrace it.

Are you interested in taking a step toward DX after reading this article? Contact our team at DOIT Software to find the best tech specialists who will accompany you on this journey!

Frequently Asked Questions

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Why companies must embrace digital transformation now?

Businesses must embrace digital transformation (DX) for several compelling reasons. Firstly, consumers expect a seamless digital experience in today’s market. Companies need to meet these needs or risk losing customers to competitors who do. Secondly, DX helps organizations streamline operations, reduce costs, and increase efficiency. Next, company digitalization supports the management of remote teams and ensures productivity. Lastly, with cyber threats on the rise, DX can accelerate security through advanced protocols and infrastructure.

Why does 70% of digital transformation fail?

The digital transformation failure rate ranges from 70% to 95%, primarily due to limited budgets and cultural resistance to change. Additionally, organizations often encounter difficulties in replacing legacy systems, dealing with IT infrastructure complexities, and addressing skill shortages. The failure to align digital strategies with overall business objectives, insufficient stakeholder engagement, and a lack of clear metrics for success also contribute to unsuccessful digital transformation projects.

How many companies succeed in digital transformation?

Digital transformation statistics show that only 35% of businesses have already achieved or going towards reaching digitalization goals.

Alex CSO
ALEXANDER PASTUKH,
CSO @ DOIT SOFTWARE
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