Irish digital transformation index: 90% of firms lag behind

Lack of skills, failure to train staff and poor investment in technology are preventing Irish firms reaching their digital potential.

Only 10% of Irish businesses can be termed digitally “strategic” or “optimised” when it comes to digital maturity.

That’s the stark finding int the latest ActionPoint H2 2021 Digital Transformation Index Report which surveyed 248 respondents across a mix of small, mid-size and large Irish companies across 18 industries including financial services, technology and manufacturing and construction. Respondents to ActionPoint’s survey included C-level executives, board members, company directors and business owners from right across the country.

“A real positive from these results is that Irish companies are aware of the critical nature of data and information security”

ActionPoint, which was recently acquired by Viatel, reported that of the remaining 90% of companies surveyed more than half would be considered “digitally purposeful” i.e. they have well-documented IT plans, understand and utilise data and are in a strong position post-Covid to strengthen their digital strategy.

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However, the report found that there still remains a high level of Irish businesses far from this point of digital maturity, with 37% of Irish businesses defined as digitally ‘reactive’, identified as having somewhat clear IT priorities and being reactive to their IT needs rather than taking a proactive approach, which is needed in a fast changing environment.

There are fears that such companies can be left behind compared to competitors who are proactively looking at ways to strengthen their digital presence and ensure both customers and employees have a meaningful experience.

In February 2022, the Irish Government launched Harnessing Digital – The Digital Ireland Framework. In their report, ambitious targets were set out for the digitalisation of Irish businesses including the goal to have 90% of SMEs at basic digital intensity by 2030 and 75% enterprise take-up in cloud, AI and Big Data.

Digital skills conundrum

The report found that only 15% of Irish organisations are investing in the growing field of employee experience (EX) technology solutions such as software, learning tools and user experience and design.

Despite the Covid-19 pandemic resulting in a shift to a remote or hybrid model of work, only 51% of respondents are effectively using ‘Collaboration & Communication Platforms’ in their business which empower employees to communicate seamlessly while working together on projects online.

There is also some concern around the number of businesses not implementing a digital skills plan to upskill and train employees in new and emerging technologies. 63% of respondents to ActionPoint’s survey indicated that they do not have a digital skills plan.

77% of organisations say that productivity and efficiency are the reasons behind adopting new technologies while 23% consider sustainability. Companies did demonstrate the importance of data and information security as ‘risk and compliance’ was the highest self-assessment score delivered by the survey. Additionally, 80% of respondents believed they were in compliance with GDPR.

Data and analytics brain drain

On the topic of data and analytics, there were mixed results when it came to organisations using analytics to understand customers with 41% of respondents noting that they “had used analytics to better understand the customer” with a third of respondents saying they were unsure if it assisted them. However, by utilising technology 51% of respondents believed it improved customer loyalty.

“The Covid-19 pandemic forced Irish businesses to digitalise and re-evaluate their IT needs from an internal as well as customer-facing perspective,” said David Jeffreys, CEO and co-founder of ActionPoint.

“Around a quarter of respondents are using advanced analytics which is encouraging as companies look to harness customer data to adapt and improve products and services. For the rest, there are some quick-wins in the area of data intelligence using tools like PowerBI.”

“A real positive from these results is that Irish companies are aware of the critical nature of data and information security. This is obviously something that has been a prominent topic for a number of years and of course, will continue as we do more of our business virtually. The fact that a high percentage of Irish businesses also believe they are GDPR compliant is also to be welcomed and goes to show that Irish businesses are taking the right steps as they progress on their digital transformation journey.”

“However, with the Government’s national digital strategy, ‘Harnessing Digital – The Digital Ireland Framework’ it has set the bar very high and our report demonstrates that there is still a lot of work to be done to close the gaps within the market. This includes businesses designing and implementing digital skills plans for their current and future employees and an overall more proactive approach to IT needs including more sophisticated CX tools, a digitally empowered Employee Experience and working towards a data-led business model,” Jeffreys said. 

Main image: David Jeffries, CEO and co-founder, ActionPoint

John Kennedy
Award-winning editor John Kennedy is one of Ireland's most experienced business and technology journalists.