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The pandemic accelerated digitalisation but managing it forward will be the next test

Firms with mature digital infrastructure will find the ‘new normal’ a much easier place to succeed in

It took the disruption caused by a global pandemic to accelerate rapid digital transformation in the private and public sectors. As businesses shuttered and we took shelter in our homes, only by moving the world online could we ensure that it kept turning.

But almost two years later, how far along the path is Ireland when it comes to this transformation, and how ready are companies to embrace the new digital skillsets required?

Knowledge Transfer Ireland (KTI) recently hosted a webinar on the theme of digitalisation and its advantages for business. “We know the overall importance for companies of digitising operations,” says Siobhan Horan, head of industry engagement at KTI.

“Improved digitalisation allows companies to scale, develop sales opportunities and ultimately achieve increased revenue and profit margins. It is not simply about bringing in the newest and latest technology, it needs also to be about assessing how to optimise and introduce new processes, people and skills.”

The dance to digitalisation had begun long before we heard of a mysterious virus circulating in China. According to David Kirton, partner in William Fry’s technology department, the private sector in Ireland has made significant strides in digital transformation in the past few years, particularly in areas such as financial services and healthcare.

“Even before the onset of the pandemic, the European Commission’s Digital Economy and Society Index found that Ireland had made the most significant progress in terms of digital transformation among all EU member states over the five years to 2020, taking us to sixth place overall,” he explains.

While this is predominantly happening in the multinational sector, Kirton also notes that Ireland has a leading position in the use of e-commerce by SMEs and in the integration of digital technology, making it clear that digital transformation is not confined to the big guns. “But the influence of the multi-national sector in driving digital transformation is difficult to overstate.”

Rocket boosters

The pandemic – and possibly Brexit – has now put “rocket boosters on this process”, according to Kirton. “Many of our clients that traditionally would not have considered themselves to be technology-driven businesses are now investing very heavily in increasingly sophisticated and complex digital transformation projects,” Kirton says.

Indeed, according to a survey of technology business leaders that William Fry published earlier this year as part of its Global Trends in Technology and Data Report, an overwhelming 93 per cent of C-suite decision makers agree that investment in digital transformation was core to facilitating data culture and future strategy.

Nevertheless, there remain areas for improvement; Ireland continues to rank poorly in terms of connectivity, which in an era of much more widespread remote working could prove to be a significant handicap. Kirton also notes there has been very limited investment in digital transformation in the public sector, where the State has not yet “joined up” Government systems and data security to any significant degree.

“Something like a community cloud for the public sector could really help with improved functionality and crucially, better data security, which must surely be a priority in light of recent public sector data security issues.”

And while great progress has been made, some age-old barriers to digital transformation remain; Kirton cites the need for upfront investment (in money and management time), low levels of trust in suppliers, and a lack of in-house capabilities in implementing digital strategies. On the latter point, Kirton notes that due to its thriving multinational sector, Ireland has the advantage of an incredibly sophisticated pool of international and home-grown digital talent.

Meanwhile, expertise to assist business in this regard is readily available from across the Irish research system, KTI’s Horan says; Enterprise Ireland Technology Centres such as CeADAR, that specialises in the field of applied AI and data analytics or IMR, the regional manufacturing digital innovation hub and others are positioned to work with business to help improve their digitisation.

“The Knowledge Transfer Ireland website provides a range of tools and resources to signpost organisations in the direction of the expertise they might need.”

Outstanding examples

During the pandemic, Schneider Electric, which provides smart technology to some of the world’s largest organisations, including Walmart and Lidl, quickly deployed virtual infrastructure to support almost 100,000 people in Ireland working remotely.

“Further to this, the digitisation of operations using our own solutions helped our plants and distribution centres to operate in challenging times,” says Rhonda Doyle, director of operations, services and projects for Schneider Electric Ireland.

Similarly, Mike Beary, country manager of AWS Ireland, has witnessed first-hand some “outstanding examples” of almost overnight digitalisation thanks to Covid-19. “We saw organisations from both the public and private sectors turning to the AWS Cloud to build applications and services in hours or days, when they would normally take weeks or months,” he says.

For example, web conferencing tool Zoom had to move at lightning speed in order to meet the rising demand during the pandemic, and Beary explains that AWS helped them dramatically increase their capacity. “They had to scale from 10 million daily meeting participants to 300 million in only a matter of weeks. AWS enabled Zoom to set up hundreds of thousands of servers in less than a month instead of the several months it would have taken to set them up physically.”

As the dust settles, and in a bid to bring some clarity, AWS commissioned new research and surveyed 10,000 senior business and IT decision-makers in enterprises across Europe. The results clearly demonstrated that enterprises are accelerating their digital transformation plans and embracing reinvention after a period of unprecedented change.

Two-thirds of the respondents said their organisations have emerged from the pandemic more agile, more adaptable, and confident about the future, while nearly two thirds said their organisations used new cloud services during the pandemic, with 40 per cent using cloud for the first time. “Remarkably, digital transformation initiatives were brought forward by almost two-and- a-half years,” Beary says.

He adds that it is clear there’s been a “reinvention dividend” for businesses that have experimented and learnt during the pandemic and intend to keep on doing so. “These organisations have innovation baked into their strategy and are using technologies like the cloud to move quickly, experiment with and accelerate new business models, and win back market share.”

Doyle agrees, saying it became “abundantly clear” during the crisis that companies that are mature in their digital transformation journeys, are proportionally more sustainable and more resilient. “They are far more likely to succeed in the ‘new normal’.”

Yet, change does not come without its challenges – Doyle says it’s no surprise that digital transformation comes out as the top concern on every C-suite survey.

“It’s often forgotten that with the world becoming more digital, the impact on our power systems will be huge. Moving into this digital era will foster an energy revolution, toward an ‘always on’ model, and a great need for power – to overcome this, digital technologies will be key.”

Danielle Barron

Danielle Barron is a contributor to The Irish Times

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