Digital transformation needs more local heroes

Digital Literacy
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Domestic companies are being propped up by multinationals when it comes to digital transformation, says Billy MacInnes

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7 June 2019 | 0

You may have seen the report by BearingPoint on digitisation – or more likely reports about the report, such as this one entitled Digital Leaders in Ireland 2019.

The main thrust of the report seemed to be that Irish companies are doing reasonably well with digitisation but they could do better compared to their European counterparts.

“Irish businesses displayed an advanced level of maturity in their digital customer experience. However, with respect to international counterparts, Ireland lagged behind,” the report stated. “Across the board, Irish companies generally performed below the average for their international counterparts.”

Of the six components of digitisation identified by BearingPoint, namely digital marketing, digital product experience, e-commerce, e-CRM, mobile and social media, the report found that Irish companies performed particularly well in the latter two.

So why are Irish companies behind the rest of Europe? According to the report, “the small size of the Irish market is a significant factor – investments in particular activities, types of marketing or infrastructure are less likely with a smaller or captive target market”.

That’s interesting because it’s not something that can be changed. The Irish market, by its very nature, can’t become much bigger than it is. Its “smallness” and geographic distance from the rest of the EU pretty much ensures it will always be something of a captive market too.

This may explain why Irish subsidiaries or franchises of multinationals “performed extremely well” compared to their native counterparts as they would be more likely to have already made large scale investments in much bigger markets. This led to a skewing of the overall results or, as BearingPoint put it, “further bolstering the impression of Ireland’s overall performance”. The company noted that “of the top five Digital Leaders in Ireland, only two are domestic”.

As for the strong performances in social media and mobile, the report commented: “This is potentially due to culture or copycatting.”

The conclusion is that all the companies “could benefit from further digitalisation, whether to maintain an existing lead, catch up with competitors, get ahead of the field, batten down against disruptors or differentiate”.

But that begs the question of just how much they can realistically digitise further or how much they need to do so. Channel partners seeking to capitalise on the digitisation trend will need to take a very realistic and pragmatic view of this. Technology can only change so much. But it can’t defy the natural limitations of the Irish market. Channel partners shouldn’t seek to convince their customers to defy gravity either.

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