Cloud and remote work support strengthened US market performance

Forget the new normal. Research from International Data Corporation (IDC) is now examining “the next normal,” highlighting notable trends and the future for the enterprise in a new IT outlook for 2021. 

In its report, “The Future Enterprise: The Next Normal Priorities Driving Technology Investments,” IDC found that largely due to cloud and remote work support, actual market performance, especially in the US, has been stronger than survey and market indicators had previously predicted.

Digital transformation has been a critical differentiator for enterprise crisis recovery. 

“Overall information and communications technology (ICT) spending is expected to have a 5% compound annual growth rate (CAGR) through 2024,” said Crawford Del Prete, IDC president. “In terms of total IT spending, we are seeing a more shallow V-shaped drop this year. Total IT spending will drop to about 1% growth this year, but this is far stronger than the 3% decline that was expected earlier in the year.”

A stronger PC volume and focus on security were strengthened thanks to stabilized cloud and digital services driven by service-provider investments.

Forty-two percent of technology decision makers indicated that their companies have plans to further invest in technology in an effort to close the digital-transformation gap, according to the IDC survey. 

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The pandemic effect

“The pandemic created a business necessity for increasing technology investment and accelerating digital transformation timetables,” said Meredith Whalen, chief research officer at IDC. “What we are learning is that many of these initiatives that started as ways to mitigate the economic impact of COVID-19 have become permanent roadmap requirements for Future Enterprise success in the digital economy.”

1. Digital parity

The next normal for Future Enterprise was explained by the identification of three overarching initiatives linking investments in technology and the effort for digital transformation, which creates digital parity across the workforce, and design efforts to meet new customer demands, per IDC. 

The pre-pandemic average organization had 14% of its workforce working remotely, which has since increased to 45%. Many organizations predict that work-from-home employees will continue as a large part of the disparate workforce after the pandemic.

Innovations have delivered the same connectivity and productivity tools to hybrid and remote workers that they once had as brick-and-mortar employees, which, the survey noted, will be essential to long-term success.

IDC predictions: 

• 75% of the G2000 will commit to providing technical parity to a hybrid workforce, developed as such, rather than derived by circumstance by 2023, which will enable employees the ability to work in real time, together separately.
• The enterprise will extend desktop and workspace by spending an additional $2 billion, as a G2000 service

2. Design based on new customer demands

IDC’s US consumer survey revealed that 47.6% of US consumers are “very concerned” about their health, due to the COVID-19 virus, a safety concern that spurred many businesses to develop contactless consumer services, i.e. curbside pickup. Look for an investment in design and user interface requirements for continued contactless process automation and focus on mobile apps providing voice-based experiences and self-service options.

IDC predictions:

• A 35% increase in investment in onsite or nearby micro-fulfillment centers will be driven by the curbside or in-store pickup of 75% of grocery e-commerce orders by 2023.
• Next year, to support contactless process automation, 40% of development activities will reprioritize design and user interface.

3. Accelerating automation initiatives

In an effort to support the greater scale required for digitally driven enterprises, automated IT operations practices will be adopted. Robotic process animation (RPA), robotics, and artificial intelligence (AI) tech will all play important roles in labor automation and focus on autonomous operations will drive investments in digital engineering organizations and digital operations technology.

ICD predictions:

• Look for the automation and/or augmentation using digital coworkers courtesy of AI, robotics and RPA for 45% of repetitive work tasks in 2022.
• 75% of G2000 IT operations will adopt automated operations practices to support their IT workforce by 2023. 

The coronavirus and its impact on industry

The IDC survey looked at COVID-19’s impact on industries and found the coronavirus created unique situations for specific industries, including healthcare, hospitality, retail, and small and medium businesses (SMBs), which required them to rethink how they use technology for customer engagement. 

1. Healthcare: Going forward, telemedicine will be a permanent fixture. With nearly a third of consumers interested in having a telemedicine option post-pandemic, healthcare providers are predicted to increase spending by 70% by 2023 on connected health technologies.
2. Hospitality: 85% of hospitality brands will implement self-service technologies by 2021, changing how they engage with guests, despite it being known as a “people-based” industry.
3. Restaurants: Initially closed for weeks when the pandemic struck, restaurants turned to necessity-based home delivery as the restaurant industry took the economic brunt of the pandemic. Post-pandemic, 30% of restaurants using third-party delivery platforms will deploy delivery options to eliminate third-party fees, increasing profit by 25%.
4. Retail: The pandemic greatly increased the adoption and use of contactless payments, and will be viewed as a customer-experience imperative going forward, causing 85% of retailers to offer at least two contactless payment options by 2023.
5. SMBs: At least 30% of SMBs will fail by 2021, which will lead to a new wave of microbusiness powered and ecosystem-first disruptors by 2023. These microbusinesses will be single employees who leverage the power of a digital platform to obtain and fulfill work.

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