Gen AI has emerged as a prominent technology in 2023, attracting targeted investment from nearly 70 per cent of global enterprises.
The landscape of digital transformation is broadening, with digital spending proving resilient in the face of economic headwinds. Nasscom, a not-for-profit industry association, in collaboration with Avasant, a management consulting firm, has released the report “Digital Enterprise Maturity 5.0: Digital Readiness in the Era of AI.” The 5th edition of the Digital Enterprise Maturity Report is based on a survey of 550 enterprises across 11 major sectors and seven chief geographic regions.
According to the survey, 71 per cent of enterprises have spent over 20 per cent of their tech spend on digital in CY2023. Moreover, nearly 90 per cent of companies have signaled plans to boost investments in key digital technology areas in 2024, including AI/machine learning (AI/ML), big data analytics, cloud computing, cybersecurity, and intelligent automation. With the adoption of generative AI set to expand significantly, the focus is anticipated to shift more toward cybersecurity in the next 18 months, by H1CY2025.
Approximately 85 per cent of high-tech companies, along with over 70 per cent of those in the telecom, media and entertainment, BFSI, and energy and utilities sectors, have dedicated more than 20 per cent of their technology budgets to digital advancements. Notably, the sectors witnessing the most significant increases in digital spending allocations from 2022 are energy and utilities, high-tech, retail, and telecom, media, and entertainment.
Gen AI has emerged as a prominent technology in 2023, attracting targeted investment from nearly 70 per cent of global enterprises. This has led to sectors including BFSI, high-tech, discrete manufacturing, telecom, media, and entertainment, as well as energy, utilities, and alternatives, significantly expanding their digital services contracts.
The recent period of 12 to 18 months has underscored the necessity of a robust digital talent strategy for the effective scaling of digital projects and sustaining agility in the face of fluctuating market dynamics. This surge in digital talent emphasis was propelled by the advancements in generative AI, which, in turn, sparked a heightened focus on cloud computing and data-related skills. Traditional sectors such as energy and utilities, along with construction and engineering, demonstrated substantial growth in their digital talent base, reflecting a broad-based commitment across industries to deepen their digital capabilities.
Notably, the number of enterprises awarding digital services contracts with durations of four years or more doubled in FY2023. India continues to be the preferred outsourcing destination for businesses aiming to build and expand their digital services portfolio, with over 50 per cent of companies in the travel and transportation, telecom, media and entertainment, and construction and engineering sectors choosing it for their outsourcing needs.
Between 47 per cent and 49 per cent of firms in sectors like telecom, media and entertainment, discrete manufacturing, and energy and utilities outsource digital services to their own capability centers in India. Nearshoring trends were also notable, with 45 per cent of high-tech and travel and transportation companies, along with 41 per cent to 43 per cent of telecom, discrete manufacturing, and construction firms, opting to nearshore India in 2023, underscoring the country's growing appeal as a global hub for digital services outsourcing.
Sangeeta Gupta, Sr. Vice President and Chief Strategy Officer at Nasscom, said, “Prioritising the development of digital talent within organizations is essential to ensuring 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, “As companies invest in digital prowess, digital talent becomes paramount, ensuring their workforce is not just ready but leading the charge in this new digital dawn.”