Boom or bust: $100trn digital transformation window of opportunity could close by 2020, Microsoft warns.
Irish businesses have until 2020 before a global $100trn digital transformation window of opportunity will close and more nimble digital competitors will disrupt their industries forever.
“Just look at how MyTaxi (formerly Hailo) arrived in the Irish market a few years ago and captured 80pc of the taxi business in that time,” suggested Aisling Curtis, commercial director at Microsoft in Ireland. “The same is happening all over the world in a variety of industries.
‘Successful digital transformation is multidimensional, leveraging the availability of the cloud, IoT, advanced analytics, mixed reality and artificial intelligence’
– AISLING CURTIS
“Disruption is inevitable but the opportunities are enormous for Irish businesses that take the right steps to evolve,” Curtis told Siliconrepublic.com.
Curtis pointed to a Harvard Business Review report indicating that 80pc of business leaders think their industry will be positively disrupted by digital transformation within the next three years. However, fewer than half have a digital strategy in place.
Findings from Amárach Research, commissioned by Microsoft Ireland to survey 300 Irish organisations, reveals that many firms struggle with what it means to be a digital business.
It found that 80pc of Irish organisations overestimate their digital readiness, with nearly half struggling to keep up with customers.
And 48pc worry about other competitors digitally transforming before them, or new entrants entering their sector using technology to gain competitive advantage.
“The World Economic Forum estimates that the digital economy will be worth over $100trn by 2025. Both Virgin Media and IBEC estimate that the value of the digital economy in Ireland alone will be €21bn by 2020. And yet, if you look at IEDR figures, 91pc of Irish SMEs aren’t set up for online commerce,” Curtis warned.
Digital disruptors and digital ditherers
Curtis said that, while 60pc of the 300 organisations that Amárach surveyed saw themselves as digital disruptors, half are still worried about how long their existing business models will last.
While more half (51pc) have digital transformation strategies in place, 25pc are unsure what steps to take.
Some 41pc of Irish organisations highlight internal issues – ranging from lack of the right skills to slow decision-making by senior staff – as major obstacles to digital transformation.
Worrying, less than half of these so-called decision-makers understand digital transformation as leveraging technology to help them evolve quickly.
A further 30pc of firms admit they do not know which technologies they can use to digitally transform.
The 51pc of organisations in Ireland that say they have a clear digital strategy say it is being driven by CEOs and board members.
Strangely, only 23pc saw their CIO as a driver for the strategy, with less than 11pc observing the CFO as a key stakeholder.
That latter point is particularly worrying ahead of the introduction of the EU’s General Data Protection Regulation (GDPR) in 2018 – bringing with it hefty fines – especially as CIOs and CFOs will be the main bastions of defence for good policy, consumer data protection and avoiding financial penalties and bad PR.
The hour of the millennial
On the bright side, after a decade of recession blighting opportunities for young people, the millennials’ time has come. More than 65pc of organisations believe that empowering employees is a priority, and digitally savvy employees in their 20s and 30s are seen as vital to successful digital transformation.
Some 31pc of firms have stepped up recruitment opportunities to attract millennials and 74pc of digitally savvy staff feel they have made a major contribution to enabling their organisations to transform.
Examples of organisations successfully transforming in Ireland include the Irish Music Rights Organistion, which has built an automated cloud-based system to track copyrighted works and deliver royalty payments.
Laya Healthcare has empowered its workforce by increasing access to data and speeding up reporting capabilities.
Randox Laboratories has transformed its “data culture” and views data as a strategic business asset.
“Digital transformation as a topic is accelerating through the boardrooms. But there is some myopia in the market because, while 60pc of Irish leaders consider themselves as digital disrupters, 80pc believe they are ahead of the competition. But in reality, less than half are leading and just 44pc are ‘keeping up’.”
Curtis offers advice to firms looking at how digital transformation will impact their business: “Focus on engaging your customers by building natural, tailored experiences that delight them, and harness their data to create actionable insights delivering market success. Internally optimise operations to improve service levels and reduce costs with intelligent processes that anticipate the future.
“Finally, organisations must adapt to reinventing products and business models to harness data as a strategic asset, automate manual processes and deliver personalisation to customers.”
She concluded: “Successful digital transformation is multidimensional, leveraging the availability of the cloud, IoT, advanced analytics, mixed reality and artificial intelligence.”