Digitalisation could be worth more than €300 billion to the Irish economy in 2023, accounting for 65 per cent of economic output. The economic potential of Ireland’s digital economy, according to figures from the International Data Corporation and the World Economic Forum, were highlighted in Microsoft’s latest report Digital Ireland – Inclusive Recovery.
The report was produced following an economic assessment of the potential impact of digital technology on Ireland, along with research undertaken with more than 360 business decision-makers and technology leaders nationwide, in both the public and private sector, conducted on behalf of Microsoft by Amárach Research.
While 82 per cent of leaders in Irish organisations indicated that they have been forced to adopt digital services and technologies faster and sooner due to the Covid-19 emergency, 77 per cent said the investment made in digital technology will have a lasting positive impact on their organisation.
“The economic and transformative impact of digitalisation both on public and private sector organisations since the Covid-19 emergency began has been monumental,” says Kieran McCorry, national technology officer with Microsoft Ireland.
Many businesses [are] only just now scratching the surface of digital transformation
“As the Digital Ireland report clearly demonstrates, the last 20 months have highlighted the seismic potential of the digital economy in Ireland over the coming years. However, the report also highlights just how much more there is still to do to reach this potential – with many businesses only just now scratching the surface of digital transformation and how they use data and tools, connect with customers, or engage employees.”
Digitalisation has the potential to reduce costs and drive growth for businesses, McCorry adds. “Digitalisation makes sense. It makes things simpler, and in doing so changes the way you do business. It creates opportunities to do things in new and exciting ways, and potentially generate new revenue streams. It helps companies do business more efficiently and more effectively.”
But it is more than just the application of technology to manual processes.
“Technology is obviously very important and central to digitalisation but it’s not just about that,” he says. “It’s about making sure your organisation is geared up for it. It’s as much about the organisational challenges, because you need to have the right strategy in place, you have to have the right support from senior stakeholders and from leadership to change the way the business operates.”
That said, cloud technology is critical to digitalisation. “In many ways, you can look at the cloud as being the real enabler of digitalisation,” McCorry points out.
The cloud
“Many of the most useful and sophisticated services and systems required enable digital transformation, things like AI services and robotic process automation, they’re all cloud-based services,” he says. “The cloud is the platform that enables digitalisation. And it is absolutely central to moving forward on the digitalisation journey.
“If you’re serious about digitalisation, the cloud represents the most cost-effective, most agile, most scalable way to digitalise your business.”
For businesses, cloud enabled digitalisation brings much greater speed and agility when it comes to offering new and richer services to customers.
“There has been an eye opening aspect to the acceleration of digitalisation during the pandemic,” McCorry notes. “There has been a sudden realisation that the cloud and the attendant digitalisation brings many new possibilities: the speed of operating your business, how you can scale services out very, very quickly and flexibly.
“Also, you can do these things without making a lot of capital investment, and the risk is reduced if you are planning a new business venture, or a new direction that you want to take the business. The cloud is very elastic and means you don’t need to commit to upfront investments in infrastructure.”
45 per cent of public sector leaders identify faster innovation as a key benefit of cloud solutions
There is an appreciation for these benefits among Irish organisations, according to the Microsoft report. The majority of technology leaders (78 per cent) say cloud-based systems and investments are at the heart of their approach to technology, while 76 per cent say the benefits of using cloud computing and systems far outweigh the costs.
This is true of both private and public sector organisations. Indeed, 45 per cent of public sector leaders identify faster innovation as a key benefit of cloud solutions. Looking to the future, 46 per cent of public sector technology leaders expect to use cloud services for all computing and data requirements, compared with just 24 per cent in the private sector.
“Accelerated adoption of cloud solutions in the public sector will have a transformational impact in areas such as healthcare, community engagement and in the delivery of an efficient and productive civil service that uses data and intelligent systems to meet the changing needs of Irish society,” says McCorry.
That would also open up an opportunity to reduce our country’s carbon emissions, he adds. “A simple example is of people accessing public services electronically instead of through more traditional means where things might need to be printed and so on.”
There are some stumbling blocks that need to be addressed. The report reveals that 43 per cent of the technology leaders surveyed say they still don’t have access to the right digital services and the right technologies to make the jump forward. But these are all services and technologies that are relatively easy and straightforward to consume in the cloud.
“The services and the technologies are there,” says McCorry. “The corporate strategy needs to catch up.”
More concerning is the fact that 47 per cent say that their people are reluctant to embrace digitalisation. “That’s disappointing because digitalisation is not just about changing technology for the sake of it. It’s about delivering better services to customers. It’s about making the people who work in the organisation more effective at the job that they do. And it’s about empowering and enabling them. That reluctance needs to be overcome.”
Hybrid working
Digitalisation can also enable the shift to hybrid working. “Sixty-nine per cent of leaders say they will have a hybrid workforce in the future,” McCorry says. “Hybrid working is here, and it’s here to stay. And it’s enabled by digital technologies. Employees today want reduced commute time and more flexibility in their working day, and it’s imperative that organisations employ digitalisation to meet that demand.
“In this light, it is heartening to see that 74 per cent of technology leaders agree that digitalisation will be an enabler for them to retain talent and attract talent.”
He says that the first-hand experience of the benefits of digitalisation will hasten its introduction by both public and private sector organisations throughout Ireland.
“They have seen how digitalisation can help them scale by introducing new products or services at pace; migrate business critical operations online; or more effectively interact with their stakeholders,” he concludes. “While there is still some hesitancy among senior leaders to fully embrace digitalisation, more of them are seeing that the benefits of adopting technologies such as the cloud far outweigh any perceived challenges.
“As we look towards recovery, we are seeing enormous interest from Irish organisations of all sizes to embrace and build on their investments to realise the full economic, environmental, and business benefits of digitalisation on a much larger scale – with cloud adoption central to their plans.”