The digital economy is expected to be worth more than $100 trillion by 2025 but Irish companies risk missing out on opportunities because they are failing to fully embrace technology, according to new research from Microsoft.
The tech giant warns that organisations here need to transform their business model within the next two years if they are to make themselves future proof. However, it warns that many companies are confused about what to do in terms of adopting technologies such as data analytics and cloud computing that can make them more agile.
According to the research, as many as half of all Irish businesses face digital disruption from competitors but many do not understand how to go about changing strategy to deal with this.
Despite this, the study, which was conducted by Amarach Research into 300 Irish organisations, reveals that 80 per cent of companies overestimate their digital readiness, with 60 per cent also seeing themselves as “disrupters”.
While over half of all organisations surveyed have digital transformation strategies in place, a quarter are unsure as to what steps to take, with obstacles cited ranging from slow decision-making to a lack of skills.
Positively disrupted
The research complements a Microsoft/Harvard Business Review global report which shows that while 80 per cent of business leaders believe their industry will be positively disrupted by digital transformation within the next three years, fewer than half have a strategy in place to ensure they are able to avail of opportunities.
“The life expectancy of a Fortune 500 company was about 75 years half a century ago, but today it is less than 15 years due to digital transformation, said Aisling Curtis, small and medium solutions and partners director at Microsoft Ireland.
“There’s a lot of confusion about what it is, though particularly in Ireland, which means many organisations are ill-prepared for dealing with it.
“People are unclear about what priorities or trends to respond to, and this is giving rise to a digital myopia with many organisations thinking they are disrupters, while the reality is that 44 per cent of the companies we surveyed said they were only just keeping up.”
Ms Curtis said few organisations understand that digital transformation has to happen across customers, employees and operations.
“This isn’t just about a single technology play here. It is also about cultural adoption, and this needs to come from the chief executive downwards.
“It is really a case of disrupt or be disrupted. Millennials are leading a massive push for transformation in many organisations, and it is likely that digital savvy employees will increasingly have a big influence on future strategy.”
