What is digitalisation?
There are lots of different definitions for digitalisation, says Patricia Callan, director of financial services Ireland at business organisation Ibec. “When we think about digitalisation, we think of it as the integration of digital technologies into a company’s existing processes, with the goal of improving customer experience and/or business performance.”
Mark Jordan, chief strategy officer at Skillnet, says the act of digitalisation enables businesses to use digital technologies to convert from manual processes or information management to support, growth, competitiveness and new opportunities.
How Covid expedited the move toward digitalisation
Organisations across most industry sectors had to adapt to entirely new business processes/running the business without any warning and overnight, says Matt Glowatz, an assistant professor at UCD’s business school. “Many organisations were not prepared for that shift of operations at all, which posed a huge challenge for managers keeping the business afloat.
“Covid pushed managers – regardless of their attitude towards digital – to move businesses to operate pretty much 100 per cent online, resulting in some organisations streamlining their operations while others were left behind.”
For smaller businesses, digital transformation initiatives grew at an accelerated rate during Covid as non-digital companies had to drastically change the way in which they engage with their customer base, says Jordan. “In larger or multinational companies, the opposite took place, with businesses looking to focus more on supporting business as usual activities with a remote workforce, as opposed to embarking on new wide-scale internal projects.”
Callan says the biggest impact was in working arrangements, where lockdowns meant companies had to shift quickly to remote/hybrid working, and adopt new digital technologies to facilitate that where required.
Will the potential recession slow digitalisation down?
It is unlikely that the potential recession will slow the move toward digitalisation down, says Paul Prior, head of digital at Three Ireland. “There is a clear distinction between a population where online was one of the only options available to meet basic necessities and an economic downturn in which the price of basic necessities is exorbitant. The former is built on increased demand, the latter on reduced demand.”
“We don’t see the current situation as having a similar effect to the pandemic, which was utterly transformative in some areas,” says Callan. “But we expect many of the changes driven by the pandemic to endure. Increasingly we can see that hybrid working arrangements are likely to become the new normal.
“We expect the digitalisation of the customer offering to continue, so that financial services firms can offer the public a mix of digital and in-person services. Similarly, we expect there will be opportunities for our members to support business customers in providing digital services to their own customers.”
Is digitalisation the key to competitiveness?
Many of the start-up and challenger businesses we’ve seen entering the Irish market in recent years have strong digital offerings and low-cost operating models, and are built on new, agile technology platforms, says Lana Briggs, customer experience lead at KPMG. “This gives them a competitive advantage as they can innovate faster than the larger, more established businesses with complex operating models and legacy systems. Their onboarding processes are also typically more straightforward, customers can sign up in just a few steps from the comfort of their own home, making it much easier for customers to vote with their feet.
“Additionally, in an increasingly digital world it is easier for new global players to enter the Irish market. So Irish organisations should also be poised to face fresh competition from external sources in the years ahead. Without a doubt, having the ability to compete in the digital sphere will be a crucial factor in maintaining competitiveness, as well as protecting and growing market share.”
Prof Glowatz says digital should be implemented only if it can be aligned with the organisation’s strategy while adding value to stakeholders. “Digitalisation won’t add any competitive advantage if implemented without strategic alignment.”
What 2023 holds
In 2023 we can expect to see continued growth and maturity in the digital capabilities outlined above, but as businesses get more mature and adept at adopting and extracting value from digitalisation we are likely to see new innovations in customer engagement, process improvement and business operational improvements, says Richard Franck, cloud and digital technologies lead at KPMG. “There will also be great value in a period of reflection for organisations, to ensure the digital developments implemented during the pandemic remain fit for purpose.
“While simply adding digital capability has been the predominant focus for the last couple of years, customer need, user experience and cost effectiveness will have to take centre stage going forward to future-proof digitalisation efforts.”
Prior says we will see continued impatience for improvement through digital where the expectation of change is much greater. “I think accessibility will be big as we move to a more purpose-driven mission. One of the key advantages for online is that it should be more accessible, and the technology is there to support this, we now need to adopt it and do so at pace. Recent changes in Google accessibility ratings are a much-needed boost to focus the attention in areas that can give the most value.”
Prof Glowatz says more companies will invest even further in digital innovation further incorporating digital initiatives/applications to reduce costs and to create knowledge through data. “We are living through the fourth industrial revolution, which is all about using digital to create business intelligence and knowledge. Having relevant data – particularly customer data – will enable managers to engage in better strategic decision-making in the digital world.”