Microsoft Ireland and Amárach’s latest report, Digital Ireland - Inclusive Recovery, shows the significant untapped potential of Ireland’s Digital Economy as organisations need to accelerate digitalisation, writes Kieran McCorry (pictured), National Technology Officer, Microsoft Ireland

As we know, Ireland is well regarded for its entrepreneurial spirit, its determination in the face of adversity and its innovative mindset. The last 18 months have been no different. Irish businesses, whether family-run SMEs or larger multinational corporations, have demonstrated a great determination and ability to adapt and overcome challenges presented to them as a result of the pandemic. What is clear is that the pandemic has acted as a catalyst, shining a light on the true potential of digital technology to transform Ireland’s economy.

Our latest report, Digital Ireland – Inclusive Recovery, highlights the significant untapped potential of Ireland’s digital economy, and the willingness of the business community to accelerate their journey of digital transformation further into the future, with cloud solutions very much to the forefront of their mind.

According to forecasts by the International Data Corporation, the report highlighted that the digitised Irish economy could be worth more than €300 billion in 2023, accounting for 65% of economic output (out of a total Irish GDP of €469 billion).

That said, despite the significant financial potential of the digital economy, under 30% of senior leaders said they are using digital technologies to engage customers through connected experiences or to empower employees. Additionally, 47% of technology leaders say their people are reluctant to embrace digitalisation, and 41% admit that their customers are ahead of them when it comes to demand for digitalised services and solutions. Furthermore, 59% of technology leaders say they don’t do enough with their organisation’s data.

In Association with

The Digital Imperative

As part of the report, we asked an island-of-Ireland sample of 360 senior business leaders and technology leaders about the importance of cloud and digitalisation to their current and future operational needs. What is clear is that organisations intending to expand their digital presence as part of their broader business strategy will have to invest not only in the hardware, software and services required to support digitalisation, but also the skills necessary to deliver their ambitions.

Our findings point to several core themes in relation to the digital imperative for organisations as we look to build an inclusive, digital society and capitalise on what true digitalisation means in the wake of the pandemic effects. This includes strategic IT priorities to scale and expand operations, attracting digital talent, c-suite alignment, and sustainability.

It is also evident from business and technology leaders that different sectors have differing challenges and priorities in relation to digitalisation. For example, financial services say the biggest digital technology challenge for them is security, whereas 85% of those working in local or central Government identify flexible working practices as a key challenge, while 38% of health leaders are focused on cost savings as a key priority for the next three years. Those working in the retail sector recognise that they are only at the beginning of their transformation, whereas in manufacturing technology leaders are looking to analytics as the key technology initiative over the next three years.

That said, the majority of technology leaders say cloud- based systems and investments are at the heart of their approach to technology, and that the benefits of using cloud computing and systems far outweigh the costs.

Digital Talent is changing the nature of HR and Recruitment practices

Business and technology leaders also recognise that the implementation of technology and digital solutions must coincide with behavioural change - creating the right digital culture, upskilling and training programmes and having the right talent. There is general agreement about the key role digitalisation now plays in HR and recruitment/retention practices within organisations, with technology leaders agreeing that digitalisation will enable them to retain and attract key talent.

In the wake of the pandemic, hybrid working was called out by technology leaders as a key driver of the adoption of digital technologies, with almost seven-in-ten agreeing they will have a ‘hybrid workforce’ in future. For many sectors, we now have the opportunity to create a future workplace that is not fixed on a location but on people. As such, it is crucial that organisations are investing in the right solutions to support re-imagined ways of working and enable a successful transition.

C-Suite Alignment and the changing role of IT leaders in business

One of the more surprising findings from the surveys is the high level of alignment between senior leaders and technology leaders - it wasn’t always this way. As a result of the Covid-19 emergency and the successful adoption to new realities, there is general c-suite alignment on the role of IT and cloud going forward - both in terms of business priorities and investment decisions.

In contrast, current organisational structures don’t allow for an integrated, strategic IT function across their business decision-making. In fact, just one quarter of technology leaders said they are actively involved in strategic planning and engage with the rest of the organisation from an early stage. The silos that existed before – with IT, digital and data operations corralled into one section or department – have broken down in many organisations. But not in all. A key challenge for medium and large businesses will be to find new ways of working across functions and departments that do not degenerate into turf wars and gate keeping exercises.

We are only at the beginning of a long process of adjustment to the new realities of a post-pandemic economy and society in Ireland, and we are very excited to work with our customers and organisations to realise the potential that is very clearly highlighted in this report.

A Case Study: ESB are using data and AI to deliver on their sustainability goals

One of the other major areas the report explores is the future of digitalisation, and specifically the impact cloud computing is having on helping organisations when it comes to sustainability. Almost three-quarters (72%) of Irish leaders believe digitalisation will help meet their sustainability goals, with four-in-ten (41%) using these services to create a sustainable IT infrastructure.

A great example of this is the work we have been doing with ESB, which is shifting from a traditional engineering focus to one that is very much enabled by data and digital in response to climate change and customer demand. It is using AI-based smart meter technology to process images of legacy and smart meters to support the national rollout of the smart meter programme. These images are automatically classified, and readings are extracted by a backend process which identifies issues for review and drives an ongoing quality improvement process, ensuring delivery of a higher quality service to Irish customers.

These almost invisible improvements, through the automation of systems and processes, will bring efficiency across multiple industries, which will boost productivity and allow businesses to focus on other core areas of their business.

ESB Chief Information Officer Mary O’Connor believes the pandemic has created new opportunities to accelerate the contribution of digital technologies to achieving ESB business objectives. ‘ESB’s primary purpose is to lead Ireland’s journey to decarbonisation,’ she says. ‘The energy network of tomorrow will be enabled by digital: using IT and AI to achieve our carbon targets, helping to drive further efficiencies, and further reduce waste.

Delivering on sustainability will not be possible without a smart energy grid connecting smart homes, enabling households to feed ‘surplus’ electricity back into the grid whilst also enabling distributed generation and renewable sources of energy generation. Such a future will be as much about managing the flow of data between multiple points on the grid as about managing the power-flow on the grid. To enable these developments, ESB is progressively moving more of its operations and processes to the cloud, relying less on dedicated servers for occasional or ad hoc needs, and instead accessing our partners’ cloud services on a more flexible basis when the need arises.’

To download the Digital Ireland - Inclusive Recovery report, go to https://aka.ms/Digital-Irl-Inclusive-Recovery