Digitalization

Unlocking the potential. Digitalization Survey Ireland 2017

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Introduction Digitalization is fundamentally changing our working environment and society. Billions of intelligent devices and machines generate massive amounts of data, creating a bridge between real and virtual worlds. Turning these vast amounts of data into value is a real source of competitive advantage for both businesses and economies. However,the level of preparedness for this change varies widely from country to country.

Against this backdrop, Siemens has been conducting surveys among companies in several countries, including Brazil, Mexico, Germany, Portugal – and now also in Ireland, where the company conducted phone interviews with 135 Irish business leaders between July and August 2017. The questions were not only about what digitalization means to them, but also how far the companies had already become digitalized, where do the respondents see potential, where barriers, and what are their current plans for digitalization.

In general, many companies in Ireland still have room to grow when it comes to implementing an holistic digitalization strategy and should therefore seize its potential in order to improve their internal processes, productivity and cooperation with suppliers and customers. Also, to be more aware of digitalization options than C-level-managers. And while international companies in Ireland are often more advanced in terms of digitalization, they do see their achievements in this area more critically.

Siemens is, of course, perfectly positioned to help customers grow their businesses digitally. Today, 17,500 Siemens employees are software developers (out of 351,000 workers worldwide), who develop a wide range of industry-specific IT and software solutions, including Product Lifecycle Management (PLM) and Manufacturing Operations Management (MOM) software, systems and services with more than 140,000 customers worldwide.

Executive Summary and Key Results

A comprehensive survey on digitalization in Ireland.

Survey participants comprised a sample of 135 decision-makers from companies representing 18 industrial sectors in Ireland. Participants were asked who was responsible for digital strategy at their company, what challenges the company was facing in the area of digitalization and what requirements they anticipated for the future.

Digital strategies: Foundations laid but still more to do.

43% of the companies surveyed have defined digital strategies for portions of their business, but less than one third has such a strategy for the company as a whole. A further 29% have no strategy at all. Only about one quarter have already conducted an economic feasibility study or an analysis of workflows with a digital focus. Moreover, nearly half of respondents could not identify any specific Digitalization project on their immediate time horizon.

Digitalization is primarily viewed as a vehicle for improving everyday operations. New business models a lesser priority.

Participants from large companies as well as those from small and medium-sized companies have similar views: all saw digitalization primarily as entailing automation, data management, the transition from analog to digital processes and the creation of networks. They expected these developments to result, above all, in enhanced quality, better decision making and improved service and resource efficiency.

Barriers to digital development: Costs and expertise.

Financing issues regarding access to relevant data or financing technologies as well as not enough know-how and experience are the biggest company-specific barriers. The cost factor relates firstly to the cost of collecting the right data needed to make decisions about digitalization projects and secondly the costs for software licenses and updates. The other factor is the lack of expertise among the workforce, especially when it comes to specializations such as data analytics or prototyping. For many surveyed, the most important point to be addressed when driving digitalization was employee involvement and training / continuing education.

Responsibility for digitalization is usually centrally anchored.

For more than half of those customers surveyed, the responsibility for decisions relating to digital strategy was centralized. Responsibility did not necessarily lie with the CIO or CTO. Digitalization was usually a “tone-from-the-top” topic, with senior management or the Board usually being responsible for digitalization issues.

Who participated? Siemens conducted the survey through phone conversations with 135 organisations in July and August 2017 using a predefined questionnaire. Small and medium-sized enterprises represent nearly three-quarters of respondents, with large enterprises of more than 500 employees accounting for the remaining 27%. Nearly two-thirds of respondents are involved in operational implementation of the company strategy, especially in engineering; 19% work in top management and 17% in middle management.