IDC Forecasts Elevation in Customer Experience Technologies Spending
CEO Insights Team
IDC defines CX as a functional activity, encompassing business processes, strategies, technologies, and services that every company uses, intending to provide a better experience for their customer and to stand unique among its competitors. The term customer refers to individuals (B2C) as well as groups (B2B). IDC focuses only on business process, and thus the report does not include the customer’s experience to the actual design of its products sold to the customers. Further, it does not include aspects specific to the products or service such as the UI or the product aesthetics.
CX spending would be distributed evenly across the 16 use cases identified by IDC. In fact, the top six use cases would account for less than one third of overall spending this year. Customer care & support and order fulfillment & interaction management are the two CX use case that would witness most spending in 2019 and throughout the forecast period. While, AI-driven engagement, interaction management and ubiquitous commerce would see the fastest spending growth over the five-year forecast period.
The retail industry is expected to spend the most on CX technologies in 2019 ($56.7 billion) and throughout the forecast period.
Customer experience has become a key differentiator for businesses worldwide. New innovation accelerator technologies like artificial intelligence and data analytics are at the forefront in driving the differentiation for businesses
From technology perspective, services would be the largest area of CX spending at $220 billion in 2019. Most of this total is expected to be divided between business services and IT services. Software would be the second largest area of CX technology spending led by CRM applications and content applications. Hardware, including infrastructure and devices, would account for nearly 20 percent of overall CX spending while telecommunications services is expected to be less than 10 percent of total spending.
The US would be the largest geographic market for CX spending in 2019 led by the discrete manufacturing and retail industries. Western Europe would be the second largest region with banking and retail as the top industries. China is expected to be the third largest market, led by healthcare and retail CX spending. China would also see the fastest growth in CX spending with a five-year CAGR of 13.6 percent.
“Customer experience has become a key differentiator for businesses worldwide. New innovation accelerator technologies like artificial intelligence and data analytics are at the forefront in driving the differentiation for businesses to succeed in their customer experience strategic initiatives”, states Craig Simpson, Research Manager, Customer Insights & Analysis.