Digitalising to compete

Digitalisation is having an inevitable and unfolding impact on business operations as we progress through the fourth industrial revolution. The Covid-19 pandemic hastened this inevitability, necessitating an immediate acceleration in digital transformation programmes for many organisations.

Dr John Bustard is a senior lecturer in digital transformation at Ulster University Business School. He says the Covid pandemic “exponentially accelerated” the more subtle, steady and incremental process of digitalisation that were already at work within many organisations at that time. “The nature of Covid’s business ‘shock’ also led to many examples of evolved digital transformation, where an entirely new business model or supply chain process was adopted and implemented and this saw an increase in process innovation in a number of sectors take place, most notably in relation to digital products,” says Bustard. He notes that much of this was due to the adoption of more online behaviours by consumers during the pandemic - this has since reduced “a little”, he says, but behaviours show no sign of resorting to pre-pandemic levels.

Businesses that successfully navigated this pandemic surge in digitalisation are now more adaptable to the evolving nature of new business paradigms, Bustard believes. “Robotic process automation, blockchain technology and connectivity are yielding delivery of further value both to customers and the companies serving them.”

He believes, however, that the levels at which this digitalisation will be required will be “very much dependent on the vision, mission and aspirations of the organisation’s leadership”. Ulster University has developed the EAS3EL model of digital transformation, which offers organisations a framework to explore the stages and processes of digital transformation in a considered and strategic manner. “Organisations who focus on digitalisation will remain competitive but those who are adept at re-engineering their business models to take advantage of new technology to create new competitive advantage will be the winners of the future.”

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“Websites, social media, smartphones, content-sharing platforms, e-procurement systems, blockchain, automation technology, robots and wearable devices have paved the road for firms to efficiently engage in innovation and R&D activities and capitalise on new market possibilities,” says Alessia Paccagnini, assistant professor at the University College Dublin school of business.

Paccagnini adds that using digital platforms to minimise operational expenses, bureaucracy and expenditures connected with commuting and business trips can result in significant savings for employees and the minimisation of the environmental footprints of businesses.

And according to Leo Moore, partner in the William Fry Technology Group, small, medium and large companies are engaging in digital transformation for numerous and diverse reasons beyond the pandemic’s impact. “Evolving with business and market demands, engaging digital technologies that improve business processes and enhancing customer experiences are examples of some of the drivers of change and the benefits that we have seen digital transformation bring to companies.”

Moore says that critical to the success of teams driving digital and data strategies in an organisation is the presence of a digital or data-driven culture. This, he explains, stimulates the use of technology and data to gain valuable insights and understand customer behaviour. “It allows organisations to provide customised products and services and achieve improved efficiency in customer experience.”

William Fry’s recent Europe for Big Data report confirmed that companies across all industries and sectors are already data-driven. The reality is that digitalisation is a must, Moore admits. “Our research shows clearly that digitalisation allows companies to do things faster, better and more efficiently. To maintain and grow competitiveness and market share, digitalisation is or should be at the heart of many companies’ strategies as we enter this new quickly evolving digital environment.”

One of the main challenges facing organisations that have been slow to adopt digital transformation is the reduced scalability and efficiency in their work flows, Moore says. This can lead to increased human error, operational costs and employee turnover.

Paccagnini believes one of the main impediments to successful digital transformation to be the lack of the necessary expertise in digitalisation and IT expertise to keep pace with new tools. “These new opportunities are creating new jobs but also place more senior workers, who are less quick to adapt to new tools, in difficult positions. For this reason, continuous investment in digital formation can support the workers in this transition.”

Moore notes, however, that an important challenge not to be overlooked by businesses playing catch-up is identifying what their competitors have done. “While early adopters reap the benefits of getting in at the start, they also bear the cost burden of being a pioneer. Organisations playing catch-up may not need to make the large R&D investments that their competitors have, and this is an advantage. By looking at the market, businesses coming to digitalisation later in the game may find it easier to identify their business needs.”

In order to compete in global markets, companies need to be at the top of their game in terms of their operations as well as their product or service offering, says Ruairi Ó’hAilin, manager of operational excellence and digital at Enterprise Ireland.

“Operational effectiveness is about delivering the right product to the right customers, at the right time and at the right price. Companies need to focus on quality, reliability, flexibility and cost,” he asserts. Digitalisation is invariably the answer to this and he echoes Moore, saying the key message is that a strategic cultural transformation is the bedrock of a successful digital transformation.

“Businesses need to be aware that technology is not the solution but a tool,” continues Ó'hAilin. “Organisations could buy technology that is not aligned with their business or get wonderful technology and all it does is automate chaos. It is not a given that you will increase productivity and you may cut costs but only if you are clear with what you want to achieve with it.”

Modernisation and the innovative use of digital tools have created more certainty and put organisations in a better position for long-term, sustainable growth, says Chris Collins, country president Ireland with Schneider Electric. He also says that the acceleration in digitalisation has brought significant benefits in efficiency and sustainability while reducing business costs.

“The energy crisis has ratcheted up the need to use digital tools, energy automation and analytics to eliminate energy waste,” says Collins. “We can’t wait for expensive new technologies to be invented - we need to take advantage of what can be done immediately to manage costs. Failing to address this sooner rather than later means running the risk of losing competitiveness.”

Collins admits, however, that many businesses simply don’t have in-house specialists or the technology to map their infrastructure accurately, and access to external consultants may not be attainable. “The up-front cost of investing in digitalisation can seem prohibitive,” he says. “This is where industry partnerships can play a more prominent role in ensuring no organisation navigates the challenges alone. We recommend starting with the easiest-to-address areas that will have the most significant impact soonest.”

He points out that organisations must recognise their digital transformation will be ongoing. “Recognising that it is a journey without an end is essential. There is always more that can be done.”