U.S. businesses and in other global regions are set to spend an estimated $4.4 trillion on digital transformation, spurred by huge changes in buyer behavior and supply chain disruption from the ongoing COVID-19 pandemic, says a new research report.

Another research report confirms what many B2B buyers and sellers already know: digital transformation is now a mainstream strategic priority.

In fact, businesses in the United States and other global regions are set to spend an estimated $4.4 trillion on digital transformation. That’s spurred by huge changes in buyer behavior and supply chain disruption from the ongoing COVID-19 pandemic, says new research from Proactis. Proactis is a procurement applications development and integration services company based in the United Kingdom.

The survey of 1,316 business managers found:

  • The top four reasons for digital transformation are:
    • to create efficiencies (23%),
    • increase profitability (21%),
    • improve compliance with regulation (19%) and
    • cut costs (19%).
  • Digital transformation is being used to combat the labor crisis in finding qualified employees. One in four major businesses digitize human resource (HR) processes specifically to attract top talent.
  • 93% of businesses have already, or are currently, investing in digitizing their finance and procurement departments.
  • 87% of respondents say increased technology use and digital processes has improved capacity to trade internationally.
  • Businesses intending to increase overseas trade expect revenue to increase by 22.3% over the next five years.

“Major businesses are investing capital and internal resources in digital transformation to protect against disruption, improve efficiency, solve supply chain issues and combat labor shortages,” says Proactis U.S. Managing Director Mark Ereli. “Supply chains remain an unpredictable and crucial part of business, and the benefits of digitizing supply is seen by many major businesses as a means to strengthening against breaks in the supply chain.”

Companies have multiple reasons to increase the pace at which they’re embracing and rolling out more digital technology, the report says. For example, nine of 10 businesses have experienced issues related to shortages, logistics and increased costs in the last year.

“Larger businesses in the U.S. took digitization extremely seriously last year, and, coming out of a major lockdown at the beginning of the year, significant investments were made across all areas of business,” the report says. “On average, U.S. businesses invested $7 million across 10 different areas of business, an investment which is higher than the total average investment across the rest of the major economies surveyed. In the U.S., on average the largest capital investments were seen in accounts payable, document management and contract management, where technology can help to accelerate the transition from design to manufacture and encourage innovation.”

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Companies will continue to spend heavily on digital technology, Proactis says. “The pandemic has accelerated the pace of this investment: pre-pandemic, just over one in three (39%) businesses had spent cash on digital transformation,” report says. “But COVID-19 has been a significant change. In just two years, that rate increased to well over half, leaving just 7% of all businesses we surveyed yet to invest at all.”

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