The digitalization of business and the related processes are high on the agenda, but it is unclear for many what the digital transformation entails and how companies will realize and implement the possibilities.
Over the past 3 years, Swedish IT budgets have had a stable growth rate (2.5%, 2016), but as of today this positive trend seems to have stabilized. Radar Ecosystems predicts a total growth of 1.3% in 2017 for the Swedish market. However, looking at the IT budget development for business critical systems, development is more positive with + 2.6%. The total budget for IT services in Sweden is 166 billion (SEK) in 2017.
Growth in iStone’s focus industries
The Retail Industry
For retail companies, the IT budget will increase from 2.0% to 2.7%. The digital conversion affects the shift from physical to digital business, a change in supply management and a more technology driven customer service, which means that the IT budget retains a relatively high level in 2017.
In the light of the digital transformation, many companies have uncertainties in terms of what the transformation requires of them. For many organizations, there will be a rapid structural change if there is no internal competence. This impedes the decision-making in the organizations, although the need for change may be critical.
Although uncertainties exist about what the digital transformation entails and how to realize the possibilities, the willingness to investment is high and this creates a great opportunity for suppliers and partners on the market.
The Manufacturing industry
In the Manufacturing industry, the IT budget decreases from 2.7% (2016) to 1.8% (2017) and there are major challenges (and opportunities) in realizing the efficiency enhancements that has motivated past IT investments.
Larger international organizations will greatly benefit from coordinating the business's physical goods flow into global solutions, which will increase efficiency and give business management greater freedom and flexibility in business decisions. Thoroughly controlling business flows is however, equally important for small and medium-sized businesses.
There is still a lot to be gained through simpler interfaces for those working in the operational side of the business. A clear example is mobile solutions. To increase efficiency, we are moving from desktop usage to mobile usage, which means being able to allow external parties, such as service technicians, to perform some of the activities that previously may have had to be performed and approved by office administrators.
A growing focus on automation indicates an expectation of efficiency improvement in the existing processes. In practice, this means integration between systems. The next step will be integration with machines (IoT), something that provides value creating enhancements, but also brand-new business opportunities.
