Digital transformation is expanding, despite economic challenges, digital spending is holding steady according to the latest Digital Enterprise 5.0 Report. 
The latest report by nasscom and Avasant “Digital Enterprise Maturity 5.0: Digital Readiness in the Era of AI” affirms that 90% of businesses have said that they intend to increase their investments in critical digital technology domains.
71% of businesses surveyed said that in CY2023, they allocated more than 20% of their IT budget to digital. Furthermore, in 2024, about 90% of businesses have said that they intend to increase their investments in critical digital technology domains, such as artificial intelligence (AI/ML), big data analytics, cloud computing, cybersecurity, and intelligent automation.
In the following 18 months, or by H1CY2025, there is expected to be a greater shift in focus toward cybersecurity due to the predicted large expansion of the use of generative AI.
Over 20% of technology budgets in the BFSI, telecom, media and entertainment, energy, and utility sectors, as well as over 70% of high-tech enterprises, have been allocated to digital improvements.
Interestingly, from 2022 onward, the industries with the biggest rises in digital spending allotments are energy and utilities, high-tech, retail, telecom, media, and entertainment mentioned the nasscom and Avasant latest report.
Gen AI The Trend Setter
In 2023, general artificial intelligence (Gen AI) became a major technology that attracted focused investment from around 70% of worldwide businesses.
Due to this, a number of industries have seen a large increase in the amount of digital services contracts they have signed, including BFSI, high-tech, discrete manufacturing, telecom, media and entertainment, energy, utilities, and alternatives.
The Digital Talent Strategy
The past 12 to 18 months have shown how important it is to have a strong digital talent strategy in order to scale digital initiatives successfully and maintain agility in the face of shifting market circumstances. Compared to 66% in 2022, 83% of businesses stated that more than 6% of their personnel was employed in digital roles in 2023.
The focus on digital talent has increased due to the progress made in Generative AI. This has led to an increased need for skills linked to cloud computing and data. An industry-wide commitment to strengthening digital skills is seen in the significant growth in the digital talent base of traditional industries like energy and utilities, as well as construction and engineering.
India Still the Hotspot for Outsourcing
Interestingly, in CY2023, the number of businesses awarding contracts for digital services that lasted four years or longer more than doubled.
More than half of the companies in the travel and transportation, telecom, media and entertainment, and construction and engineering sectors choose India as their outsourcing destination.
This indicates that India remains the top choice for companies looking to develop and broaden their digital services portfolio. In industries such as telecom, media and entertainment, discrete manufacturing, energy, and utilities, between 47 and 49 percent of businesses outsource digital services to their own capability centers in India.
Significant nearshoring trends were also observed according to the Digital Enterprise 5.0 report. 41% to 43% of telecom, discrete manufacturing, and construction industries choosing to nearshore to India in 2023, along with 45% of high-tech and travel and transportation organizations.
Sangeeta Gupta, Sr. Vice President and Chief Strategy Officer at nasscom said, “A strategic framework for businesses seeking to hasten digital adoption in an era where artificial intelligence and skills are paramount. Prioritizing the development of digital talent within organizations is essential to ensure the workforce can effectively leverage AI and other advanced technologies. Moreover, focusing on data mastery to extract actionable insights and informed decision-making is critical.”
Avasant Managing Partner Akshay Khanna said, “The digital landscape is undergoing a profound transformation, and enterprises are at the forefront of this change. The commitment to digital maturity is no longer just about streamlining costs but about boldly shaping the future. In this AI-driven era, we see companies prioritizing groundbreaking innovation, elevating customer experience, and accelerating market responsiveness. They are not just adapting to change; they are defining it. As they invest in digital prowess, digital talent becomes paramount, ensuring their workforce is not just ready but leading the charge in this new digital dawn.”
FY2024 Outlook According to Digital Enterprise 5.0 Report
While 80% of multinational businesses estimate that revenues will either rise or stay the same despite pressure on prices, 68% of them predict an increase in customer demand. It is anticipated that in 2024, a strategic shift towards competitive differentiation will take precedence over the cost containment focus of 2023.
The need to use data more efficiently is driving investment in areas such as automation, networking technology, cybersecurity, AI/machine learning, and generative AI during the next 12 to 18 months reaffirms the Digital Enterprise 5.0 report.
2024 will see more investment in generative AI, as 73% of companies that budgeted for Gen AI in 2023 felt that spending needed to go up, particularly in talent development.
In addition to the crucial post of chief AI officer, the top five Gen AI-related high-demand jobs for 2024 are expected to revolve around model application and fine-tuning stated the Digital Enterprise 5.0 report.
These roles include Gen AI developers, quick engineers, AI content makers, and curators of AI models.
About the nasscom, Avasant Digital Enterprise 5.0 report
550 businesses from seven key geographic regions and 11 major sectors participated in the survey. This formed the basis of the fifth edition of the Digital Enterprise Maturity report analysis.
For Further Info: https://nasscom.in/
