Digital transformation is a catch-all phrase for leveraging technologies to transform business processes and the way people work.
Mostly it’s about efficiencies: replacing paper trails with electronic workflows, supplementing physical interactions and transactions with virtual engagement across multiple channels, all enabled by internet platforms and cloud-based services that can aggregate data for analysis to drive even greater improvement.
We have been talking about it for a decade, but it took a pandemic to force some businesses into really embracing it.
“While many organisations had begun this journey, it has undoubtedly accelerated the digital transformation process to move to the ‘new normal’,” said Aidan McEvoy, head of digital workspace solutions at Arkphire.
“It has always been about looking for a more efficient way of doing processes and what’s happened has opened a lot of people’s eyes to the possibilities.”
Covid-19 has sparked unprecedented digital enablement, as companies turned to conferencing applications like Teams and Zoom to keep people working during lockdown.
“Going back is not an option. First of all it’s probably not a choice, and secondly, businesses are seeing commercial, economic and environmental value in it,” said McEvoy. “We are seeing something akin to a paradigm shift for lots of organisations.”
Suddenly a roadmap opens up and it gets more complicated more quickly. IT services companies like Arkphire will be called upon to help navigate the journey. McEvoy emphasised the importance of focusing on people rather than technology.
“You have to give people a consistent and quality experience; it can’t take too long to log in, for example. And if you give people that, productivity levels will improve,” he said.
“Analysts show the importance of experience in terms of how you consume a digital environment, whether it’s a workspace or the desktop, from the cloud or a legacy data centre.”
With some surveys claiming that up to 80 per cent of digital transformation projects end in failure, the onus is on organisations and their IT teams to be clear on goals and deliverables. Bringing employees on the journey is crucial for success, according to McEvoy – another reason why delivering a great experience is so important.
“Transformation of any organisation first and foremost involves a culture change. You have to get buy-in at the top tier of management that permeates throughout the organisation. Where things fail on a transformation roadmap is where the vision isn’t explained clearly enough before you even engage on the planning and choices around technology. If you don’t get the change piece right, everything else is doomed to failure,” he said.
“Hearts and minds is the first battleground. If you win that and convince people it’s a good thing, it will help enormously to get people onboard.”
The other big challenge is security, exacerbated by having to rapidly set people up to work from home during the pandemic outside the protection of the corporate network with its firewalls and antivirus.
“The aim should be to protect the centre, to allow people outside to connect in remotely, seamlessly and securely as if they were in the office. Arkphire provides a VPN service that allows for access paths where the data and applications never leave the centre,” he said.
As well as a spike in laptop sales and unified communications tools to support employees in home working, Dell is seeing a lot of interest in more sophisticated remote working solutions.
“Organisations are turning to virtual desktop infrastructure (VDI) that allows people to log on and have full access to their applications remotely,” said Ronan Carey, regional sales director at Dell Technologies Ireland.
He recognises that VDI is more of a strategic investment than conferencing solutions, which can be acquired more ad hoc.
“We typically see the adoption in organisations with really savvy IT teams, where they have been planning an implementation that has become a necessity because of Covid. It can enable thousands of people to work from home as seamlessly as possible,” he said.
Dell has been working with a large financial institution that has made the move in response to the virus. It is a way of ensuring that call centres and payment processing functions can continue.
“Employees are now logging in and doing it from home. Rather than implementing it from scratch, it’s an acceleration of plans they already had in place,” Carey said.
He is seeing a lot of accelerated IT projects at the moment.
“I’m a believer that transformational events drive progress out of necessity,” he said. “The industry has been talking about digital transformation for eight to ten years. Now we are seeing the way a lot of people do business literally changing overnight.”
He singles out IT professionals for special praise in this strange new world, enabling complicated transformation projects in difficult circumstances.
“I’ve been astounded how they have continued to keep their organisations running, agile teams that stand over the technology that runs the business and puts processes around it to make sure it’s secure and available,” he said.
Success in transformation projects, according to Carey, comes from understanding what applications need to be digitally transformed and the environment that has to be built to support them.
A combination of on-premises and cloud infrastructure is required, a multi-cloud world where workloads can be moved between different platforms depending on the business need.
“What we believe in is agility and that starts with IT transformation. You have to have infrastructure that can transform applications while running your business, like changing the wheel on a Formula 1 car as it’s careering at 200 miles an hour,” he said.
“That’s why smart IT people and infrastructure architects are key to digital transformation success.”
Vision and a mission
Phil Codd, managing director at Expleo Ireland, referenced three technologies that have boomed during lockdown: conferencing and comms tools, online shopping and contactless payment systems. Another one Expleo is seeing direct demand for is Robotic Process Automation software.
“Clients we have already engaged with and implemented some level of robotics suddenly need more,” he said. “It is often related to moving from a multichannel retail model to online only, which has increased the workload. I expect the increase in demand to continue.”
He also expects organisations to look hard at their businesses and what they’ve learned from the Covid experience, where gaps were exposed in their business models and how they might do better on the digital journey they now find themselves on.
Fundamentals aligning long-term technology investments to business benefits need to be revisited.
“It’s important to have a vision and a mission,” said Codd, “to know what processes need to change, what technology to invest in and the value proposition. The chief executive of a meat-packing company wanting to go digital might not be a good enough reason to make the move; they have to look at how they are going to make money from it.”
He said that a high level of perceived failure in transformation projects comes after a strategy is devised, when organisations make the mistake of jumping straight to the execution phase.
“They want the quick apps and the glitzy front-end on the website. All the rest gets missed – the organisation piece and the change programme that brings people on the journey. They still have to be done,” he said.
“There is no point having a fantastic new website enabling you to take thousands of orders a day if everything else in your organisation can’t cope with the demand.”
He cites the analysis of US consultant Stan Slap, who said that most organisations have at least two cultures, management and workers. They can’t be broken down, so they have to learn to live in harmony.
“The tech is the easy bit. We can communicate over Zoom, buy things that turn up at our door, but it’s how you change the culture of the organisation that’s the biggest challenge,” said Codd.
He is concerned that the absence of chief information officers on boards in Ireland and the age profile of people making the big decisions may be inhibitors.
“You have to ask where the strategy is being developed. If that’s the make-up of your board, you can kind of see where the blockers might be if a major cultural change is required by an organisation,” he said.
Ecommerce drives An Post’s digital transformation
An Post is among the fortunate organisations in Ireland that has fallen on the right side of Covid-19 financially. It is reaping the benefits of an explosion in online shopping that has seen its parcel delivery service overtake the seasonal peaks of Christmas, with 1.2 million items shifted since the lockdown started.
“We’re definitely seeing a new wave of people doing online shopping and we expect they will continue to rely on it into the future,” said Des Morley, chief digital officer at An Post. “This is happening at a time when we are trying to move from the old world of mail to the new world of ecommerce.”
As a public service with a broad remit that spans financial and government services, including social welfare payments and the issuing of TV and dog licenses, An Post has always straddled many roles.
Its evolution into what Morley describes as “the backbone of ecommerce in Ireland” is perhaps the most striking, and an indication that a digital transformation strategy started 18 month ago is starting to pay off.
“The reality is that every business is undergoing some sort of transformation because customers are going that way. Digital is seen not just as an enabler but a driver of the business at An Post,” he said. “As an organisation, it took a huge amount of bravery because we are seen as a traditional retail presence with a strong field force.”
Morley described the strategy as an omni-channel play, combining its physical network of post offices with parcel delivery and tracking services that have taken it into the virtual world of eshopping.
“We are the largest distributor of online shopping in Ireland and support the entire value chain, from the retailer with order fulfilment needs through to customers who use our track-and-trace delivery process,” he said.
Amazon is one of the firm’s biggest customers. “They set the bar very high for us. We provide the last mile experience in Ireland on their behalf and it’s an area where we are actively trying to improve the digital experience of our customers,” he said.
Like a lot of digitally driven businesses that use multiple channels, An Post wants to get closer to customers and give them a better experience that allows them to move seamlessly between different touchpoints.
In the past, customers would have taken a range of different services without An Post being able to make the connection. The plan is to change that.
“We are developing our data capability and an identify platform to give us the ability to better understand our customers, their needs, wants and behaviours. It will be rolling out in the next few months and make it easier for customers, because we will know who they are. When they come back for a repeat visit, we will be able to offer a better personal service,” he said.
“To do that, we have to have a line of sight across customers through the various products and services they use, online and in post offices.”
He would also like to explore the possibility of playing a greater national role as a public service, providing a point of interaction between government and citizen. “Through our retail outlets and postal delivery functions, we could create a more seamless, omnichannel experience for people,” he said.
Des Morley joined An Post just 18 months ago and was immediately impressed by a strong culture of “digital bravery”, a willingness to go out and try new things. He has a small team of fewer than ten, but the evolution of open standards and APIs have made digital transformation possible.
Crucial, too, are the relationships An Post has forged with IT partners who have helped the organisation fully move to cloud infrastructure and deliver a range of micro services.
“We can work with a series of partners and pull together the very best technology. Infrastructure become an ecosystem of services so you are not constantly trying to reinvent the wheel,” he said. “You can pull products together quicker and that gets you to market quicker.”
Butcher, baker and website maker
Michele Neylon, founder of hosting and domain specialist Blacknight Solutions, doesn’t like the term digital transformation. He doesn’t like any jargon that confuses what he maintains should be a straightforward proposition for business customers, particularly at a time when the pandemic has made the argument for doing something different even more stark.
“What we’re really talking about is the shift to online. For many businesses, that’s what it boils down to. They woke up one morning at the start of Covid-19 and saw their businesses disappear,” he said.
“They are retailers, offices or different types of clinics, and they’ve had to change the way they interact with customers because their outlets are closed and they need to make a seismic shift or risk going out of business.”
He tells the story of a local butcher in Arklow that had been weighing up the pros and cons of having a website for years. Covid forced the move.
“When this hit and footfall stopped, they were on the phone to us almost immediately. They just use the site as a way to put up a list of current offers to attract people into the shop. Other outlets are providing variations on click-and-collect type services, just to remind people that they are still there,” he said.
Responding to the plight that many traditional businesses find themselves in, Blacknight has launched a new range of website-building packages where the onus is on rich functionality for a low cost of entry.
You can get a fully featured website with a shopping cart for as little as €10 a month. He is highly critical of vendors and platforms that charge a premium for an online presence, including fast food websites that take a hefty cut to give a listing and provide a shopping basket.
Neylon suggests some takeaways might be better off doing it themselves.
“In a small town in particular the restaurants already have brand awareness, so they don’t need to use the big platform brands. They just need to make people aware that they are open for business and what’s on the menu,” he said.
“The biggest obstacle for small firms has been fear of technology and a wariness of how much it’s going to cost. We help them overcome both hurdles with ecommerce solutions that are as good as a service that can cost three or four times the price.”