Irish organisations feel the digital pressure for transformation

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New report highlights areas for concern, and the cost of failed efforts

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20 October 2017 | 0

 

The majority of Irish businesses believe they are losing ground to competitors through a lack of digital facilities for customers.

According to a new global survey for Fujitsu among 1,625 organisations, which included medium to large organisations in Ireland, nearly three quarters (70%) of Irish businesses said their customers expect them to be more digital, while 80% believe that they are behind their competitors in this regard.

The survey formed the basis of a Fujitsu report entitled “The Digital Transformation PACT” which looked at how organisations are handling digital transformation with respect to the four strategic elements needed for digital transformation: People, Actions, Collaboration and Technology (PACT).

The report said that of the Irish business leaders surveyed, four in ten have cancelled a project in the last two years at an average cost of €137,625, while one in five businesses have experienced a failed project, costing an average of €831,500.

Cost per project
According to the report, this amounts to a lower failure rate than the global average, but incurs a significantly higher individual cost per failed project than the global average of €555,000.

In recognition of the fact that digital transformation is about more than technology, for the majority of Irish businesses, actions, including strategy, along with skills are the most important factors in driving digital transformation, said the report.

Organisations are cognisant of the importance of digital transformation, with half of Irish businesses (50%) having already implemented transformation projects, while a further 30% are at testing stage in terms of digital projects. However, the report says that businesses continue to face challenges across the four PACT pillars. Of the Irish business leaders surveyed, nearly two thirds (60%) said customers are most influential in driving their digital transformation, followed by competitors (30%).

More than tools
“Technology can be truly transformative, but making the most of digital requires more than the latest tools,” said Tony O’Malley, CEO Fujitsu Ireland. “While Irish businesses recognise the need to adopt new technologies, there are still significant issues including costs and skills deficits, to be overcome by organisations as they seek to adapt to this changing environment. Many Irish organisations are now incorporating digital strategies into their overarching business strategies; however to realise their digital vision, it’s crucial that businesses have the right breadth of skills, processes, partnerships and technology in place. As the business landscape continues to evolve, business leaders are aware that failure to adapt will result in being left behind as adaptive competitors reap the rewards of their agility.”

The skills issue in digital transformation is well understood by Irish businesses, with the vast majority (95%) taking steps to increase access to digital expertise, though some 60% admit to a clear lack of digital skills within their organisation.

On a positive note, the primary measure for achieving this among for Irish organisations is upskilling existing staff, the report says. Skills will continue to be a key business issue, with 90% say upskilling staff will be vital to their organisation’s success in the next three years, while 85% believe artificial intelligence will transform the skills needed by 2020. With that in mind, the report says 85% also have a skills strategy lasting beyond the next twelve months.

Defined strategy
Some three-quarters of Irish business leaders say their organisation has a clearly defined digital strategy, while just less than half (45%) are not confident that the rest of the business knows what it is. However, three quarters globally (74%) say that projects are often undertaken that are not regarded as linked to the overarching business strategy. Four out of 10 say that shadow digital projects are a serious problem. In an Irish context, actions are seen as being more important factors than people in the PACT context, but that does not seem to inhibit organisations from increasing the breadth of their digital skillsets.

The report says that business leaders in Ireland are taking positive steps in collaboration, with most businesses (65%) undertaking, or planning to, co-creation projects, with partners, including technology experts (62%). This is followed with start-ups (31%) and other organisations from within their sectors (31%). Surprisingly, three quarters would even be willing to share sensitive information as part of these co-creation projects. However, more than half (55%) say that a lack of success within a quick timeframe would quickly put an end to their strategic partnerships.

AI agenda
Under the technology heading, Irish business leaders are planning to implement a wide range of systems, the report finds. In the next 12 months, the vast majority are planning to introduce artificial intelligence systems (70%), with cybersecurity solutions (40%) and cloud computing (40%) on a par. Irish business leaders are aware of the disruptive impact of technological change, as two thirds (65%) say the ability to change will be crucial to their survival in the next five years. However, the same proportion (65%) are concerned about their organisation’s capacity to adapt to technologies such as AI. Despite all of this, less than half (45%) believe that digital transformation in their sector will cause their organisation to lose customers relative to competitors. However, 70% admit that it is impossible to guess with whom their organisation will compete in 10 years.

“Adapting to changed business environments requires a balanced approach,” said O’Malley. “Simply adopting a strategy and implementing a process, is not enough without the requisite skillset and buy-in from within your organisation. It is no longer enough just to have the best applications and devices; without talented and capable people to use them, they are meaningless. You may have the brightest and most progressive people, but they will flounder in a culture that stifles innovation. No business—no matter how big, how influential or powerful—can hope to stand alone and succeed in the world of tomorrow. Only by bringing equilibrium to those four vital ingredients, people, actions, collaboration and technology, can organisations thrive in this digital era.”

 

TechCentral Reporters

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