Poor IT governance is leading to failed digital projects in Ireland, survey says

30 Sep 2022

Eleanor Dempsey of Auxilion. Image: Auxilion

An Auxilion survey suggests Irish companies lost more than €320,000 on average from failed digital transformation projects in the past year.

While digital transformation remains a priority for businesses, a troubling statistic has emerged in a recent survey for Irish companies trying to get that digital edge.

According to the survey by IT services company Auxilion, failed digital transformation projects have cost companies in Ireland an average of €323,143 over the past year.

Conducted by Censuswide and published today (30 September), the survey of about 100 C-suite executives from across enterprises in Ireland found that the leading cause of failed projects was poor IT governance. This was cited by 72pc of respondents.

More than half (59pc) also had to abandon projects owing to poor governance in general, while 80pc believe that outsourcing their IT to a partner could solve this problem and improve governance.

Digital transformation is the process of leveraging established and emerging technologies to solve problems within enterprises and scaling business. The pandemic has made digitalisation a top priority for companies, with Ireland’s State agencies finding ways to help businesses weather the storm.

‘It’s worth noting that the skills required to drive digital transformation are scarce and not readily available internally’

Despite being among the top business priorities for respondents, the survey found that a fifth of them thought enabling digital transformation was one of the biggest pressure points for their organisation in terms of IT.

“Our survey suggests that Irish organisations are struggling to successfully deliver digital transformation programmes, and it’s likely costing hundreds of millions of euros across the board,” said Eleanor Dempsey, consultancy and competency director at Auxilion.

“Companies are clearly underestimating the complexities of driving change, automating processes and replacing technology. It’s worth noting that the skills required to drive digital transformation are scarce and not readily available internally.”

A recent KPMG report revealed that more than two-thirds of global businesses plan to embrace emerging technologies, but ongoing talent shortages could complicate the adoption of this tech.

It came after a Dell Technologies survey in Ireland suggested that businesses see people as their most important asset when it comes to driving digital transformation.

Dempsey said that for a business to “transform meaningfully”, they needed to not only deploy new technologies and processes but also embed these changes across the entire team.

“After all, transformation projects are driven by people – and they must have the right IT governance in place to work in a collaborative and impactful way to both manage and benefit from change.”

In terms of cloud adoption and management, the survey found that private cloud emerged as the most popular (47pc) infrastructure of choice, followed by hybrid cloud (23pc) and public cloud (22pc).

However, nearly a third of those using hybrid cloud to deploy IT infrastructure said their strategy was not fit for purpose.

Potential challenges to cloud adoption cited by respondents include lack of knowledge and skills within teams (36pc), data compliance requirements (31pc) and not having visibility of all devices accessing the cloud (29pc).

Other than cloud, other technologies that are rising in popularity for those surveyed include machine learning, IoT, artificial intelligence, edge computing and 5G.

But for all of this, getting governance right is “crucial” to embracing digital transformation, according to Dempsey.

“If this is done effectively, organisations can benefit from heightened productivity among employees, enhanced service delivery for customers, and increased growth for the business,” she said.

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Vish Gain is a journalist with Silicon Republic