Even tech-enabled businesses can benefit from an outside perspective when it comes to internal processes and the technology that supports them. Digitalisation, or digital transformation, is a driver of competitiveness and can enable companies to make significant gains in efficiency and productivity.
What does digitalisation mean?
If you’re not certain what “digitalisation” means, think of it as using digital tools (apps, software, etc.) to simplify the daily work in your business (operations, finances, customer service, marketing, etc.). The work everyone does can be thought of as being made up of various tasks, and how those tasks are carried out is a workflow. Digitalisation is the combination of the workflow, the technology (tool) that makes it possible, and the technical skill that brings the two together.
Let’s take an example from an ecommerce business – the simple sale of a product on your website. If we look at this event from a digitalisation perspective, we could have the following events and technology involvement:
- Checkout event happens (involves your website and a payment gateway)
- The sale shows in your dashboard (involves your website and an alert email)
- You prepare the parcel for posting (involves a shipping label being generated)
- An invoice is sent to the customer (involves billing/accounting software)
- The customer is alerted (involves an email and a parcel-tracking website)
- The item sold is removed from your stock (involves inventory tracking software)
As you can see, each step of that simple sales process involves different digital tools. And moving between those tools is data (the customer’s name and address, the product information, etc.). In a poorly optimised system, you might have to enter that data manually at almost every step. In a well-optimised system, the data would flow automatically from one tool to another. Making sure that happens involves using the right combination of tools and following a thought-out process (as mentioned above, this amounts to workflow + tool + skill).
Where the system is well optimised, dealing with a sale might take only a quarter of the time. Depending on your business, this could mean fewer employees, a greater volume of sales, and higher customer satisfaction levels – resulting in a more profitable business. If that sounds interesting, you should know that there are government supports to help your company’s digitalisation journey, which we look at below.
But first, some digitalisation statistics
We are using more and more technology in business, both hardware and software. Paper-based businesses are becoming few and far between as cloud becomes the norm in every type and size of business. A recent report by Thales shows just how much EU companies have come to rely on technology:
* includes a mix of key management software, hardware security modules, homegrown solutions, and spreadsheets or flat files.
The benefits of digitalisation are widely recognised to be that it improves operational efficiency, allows you to meet customer expectations, improves new product quality, increases design reuse, reduces product development costs, enables new revenue streams, and de-risks your business.
Digitalisation helps businesses withstand external shocks
The pandemic has certainly increased the speed of digital adoption – at home and at work. It also highlighted how digitally enabled companies were better able to withstand external shocks. A McKinsey study in 2020 reported that the most successful organisations (in dealing with the pandemic) reported a variety of technology-related capabilities: 75% said they had the ability to fill tech jobs during the crisis, 67% said they were more advanced in using technology than their peers before the crisis, and 56% said they were the first movers in experimenting with digital technologies during the crisis.
Past performance will no longer be an indicator of future potential – if you fail to invest in digital transformation and your competitors do, your business will risk being less efficient, less agile, and less profitable.
The IMF predicted that 65% of the world’s GDP would be digitized this year (2022). By 2023, global spending on services and technologies that will allow digital transformation is estimated to amount to $2.3 trillion (IDC, 2020). This means that past performance will no longer be an indicator of future potential – if you fail to invest in digital transformation and your competitors do, your business will risk being less efficient, less agile, and less profitable.
Get support with your digital transformation
The government has recognised the importance of digital transformation and there are two supports in particular that can help companies get started or optimise existing digital processes.
Enterprise Ireland: Digitalisation Voucher
The Enterprise Ireland Digitalisation Voucher provides €9,000 to work with third-party consultants who will identify where the company is on its digital business journey and develop a digital adaption plan based on the identified need. This voucher will help you get strategic support but cannot be used for implementation (such as paying a developer or buying software).
Enterprise Ireland sees three areas of need which could be met by this voucher:
- Review of current operational processes and systems to identify improvement opportunities.
- Review of current products, services and channels and potential to create a high-quality digital experience for customers.
- Review of current key performance data that is used to drive the business and identify gaps and improvement opportunities.
The Digitalisation Voucher is open to all Enterprise Ireland clients that employ 10 or more people or non-Enterprise Ireland client companies that operate within the manufacturing or internationally traded service sectors and that employed 10 or more full-time staff (on their payroll) on 29th February 2020 OR employ 10 full-time staff at the time of application.
Eligible companies will be approved under the Temporary Aid Framework or De Minimis Aid based on the reduction in actual or projected turnover or profit as a result of the pandemic.
Local Enterprise Office (LEO): Lean for Micro – Management Development Programme
If your business is too small to qualify for the Enterprise Ireland voucher, the Lean for Micro programme could help you take a step back and review what you’d like to improve in the business. Lean methodology doesn’t just work in sectors such as manufacturing, all businesses can benefit from the Lean approach to optimising people, resources, and inputs.
Consisting of training and mentoring, the programme is worth €3,500, with a participation of €250 from the business. Participants receive up to 5 support visits lasting 3 ½ hours each over a 16-week, which should be enough to bring the tasks outlined to a successful conclusion. Alternatively, one-to-one mentoring can be provided for participants to chart their Lean journey. Whichever approach you take, the programme allows you to work with a Lean consultant to identify areas the business could improve on and where you could be more efficient. Digitalisation could be part of that, to a lesser or greater extent depending on the business.
You can register your interest by answering a few brief questions about your business here: https://leanformicro.ie/register.
Starting your own digitalisation plan
In my experience, even companies that think of themselves as already digitalised will have areas of the business that aren’t working optimally or aren’t adequately supported by digital tools. We’ve worked with a number of companies to deliver Enterprise Ireland’s Digitalisation Voucher and the opportunities that have been identified have the potential to bring significant return on investment.
It’s very hard to scale a business, and only a fraction of companies will ever make it to +€1 million – even fewer to +€10 million. Those that do will have made strategic decisions and invested where it matters. Technology is one such area. Digitalisation won’t simply happen because you want it to. It is a proactive exercise that needs a proper plan, realistic investment, and buy-in across the business. If you’re interested in getting to grips with this important area, I recommend bringing in an expert to help with the process. The timing of this is perfect with government funding currently available to reduce to cost.