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SmartOffice’s Paul Towler & Paul Martin
Digitalisation of Irish SMEs SMEs make up 99.8% of active businesses in the Irish economy and believe it or not 70% of the SME workforce is employed in non-digital sectors such as services, construction and manufacturing. Despite this, Ireland is already in a strong position, being among the most digitalised countries in the world (6th in the EU digital index DESI) for many years. Beyond this ranking, a European Investment Bank report (2019) unveiled a two-speed digital economy in which a small number of multinationals operate with high digitalisation levels and productivity, whereas traditional indigenous SMEs have been slower in leveraging digital solutions to reduce costs, drive innovation and expand market presence. Considering their relevance to the Irish economy, SMEs need to be at the core of digital transformation strategy.
New ways of working The Covid 19 crisis hastened the arrival of ”digital” in typically more labourintensive sectors such as retail and health care and has brought the digital agenda into focus for more localised SMEs with typically lower adoption such as construction, leisure, retail and hospitality.
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The use of cloud-based technology has also greatly accelerated and the pandemic has highlighted the increased the need for employees to have simple, effective remote access to their systems and data rather than reaching for files on a dusty shelf in an office out of bounds! When more employees are working remotely, the value of maximising the efficiency of processes and using technology to automate basic tasks cannot be underestimated. It can help to eliminate human error and potentially free up 25-35% of every single work day for other tasks that require. Companies who automate basic processes help to liberate employees to work at a higher level every day, and the advanced competency and creativity of the workforce can positively influence and impact decision making. Through digitalisation companies may become more competitive and effective at connecting more deeply with their product and their customer.
Industry 4.0 Industry 4.0 or the ‘fourth industrial revolution’ and the opportunities that digitalisation can bring to sectors such as manufacturing, has never been more in focus to ensure competitive advantage. In fact, a McKinsey study
on Shaping the Future of Work (2017) estimated that new digitally-enabled automation and artificial intelligence have the potential to bring an uplift in GDP of €550 billion (or 1.2% per year) from 2016 to 2030 in nine European “digital front runner” economies, including Ireland, Belgium, Denmark, Estonia, Finland, Luxembourg, Netherlands, Norway and Sweden. Evidence suggests that companies who embrace digitalisation tend to experience better access to new markets, increased innovation and improved competitiveness. It is for this reason digitalisation is a European Commission policy priority and the central theme of a recent Enterprise Europe Network (EEN) event held with EEN Ireland partners on 8 December last - ‘‘Developing SME ‘resilience’ through digitalisation in a Covid/post-Covid Environment’’. At the online event, it was evident that digital transformation requires an enterprise-wide change driven by digital technologies and the integration of transformation processes into every aspect of the company. This transformation should be supported at company level by changes in culture, leadership, skills and processes.
