IE Digital Health Index for SMEs 2018

Irish SMEs Digital Health is Good – but There’s Room to Improve

Almost three-quarters (72%) of Irish SMEs now have a website, and businesses have increased their usage of social media and other online tools, but only a third of Irish companies can take orders online, and two thirds do not promote their businesses online.

That’s according to the SME Digital Health Index, an annual survey of 1,000 Irish SMEs that measures attitudes to and use of digital assets like websites, e-commerce and social media.

The research is published by IE Domain Registry (IEDR), the company that runs Ireland’s country domain, .IE.

For their 2018 report, IEDR conducted a single survey of 1,000 SMEs (instead of 500 in two biannual waves as they did in previous reports). And the report is structured around a new Digital Skills Assessment framework under three headings: Online Communication; Facilitating Transactions; and Boosting their online presence with digital marketing, social media etc.

IE Digital Health Index for SMEs 2018

The assessment is positive on the whole. At 72%, the number of SMEs with a website is at its highest ever, and up 5% on December 2017. And the number of SMEs with no online presence whatsoever is at a record low as well, at 15%, down from 22% last year.

Of those SMEs with websites, 73% say theirs are optimised for smartphones and tablets. 89% of those with the website say it plays an important role in driving new business. 77% say that being online and digitally savvy has raised awareness of their business.

Interestingly, the number of SMEs with a Facebook page is down 2% at 53%. 21% use Twitter, up 2% on last year.

In its ‘Digital Skills Assessment’, the report awards Irish SMEs an average B grade in ‘communicating’ and ‘transacting’, indicating a fair to good use of digital assets to communicate online with customers, facilitate e-commerce and manage other business transactions online.

However, the report gives SMEs an average C grade in the ‘boosting’ category, indicating a ‘poor use or understanding’ of digital assets like business productivity software, online messaging platforms, online marketing and promotion tools or data analytics software. This indicates a widespread inability of SMEs to use software and digital skills to improve business productivity, analyse customer data and promote an online presence.

According to the report, Irish SMEs are generally agreed on the importance of ecommerce, and they avail of it themselves when it comes to purchasing from suppliers, for example. But they identify a number of obstacles to the integration of technology into their own sales and marketing.

IE Digital Health Index for SMEs 2018

The report identifies two of the biggest barriers to SMEs doing more online: a lack of time (24%) and a lack of the technical skills (11%) perceived as necessary to build a website, integrate e-commerce, or make use of productivity or analytics software. A quarter (25%) say that they are ‘doing all they can’ online—even though only 3 in 10 SMEs can take sales orders through their website.

Offliner SMEs – those with no digital assets whatsoever – cite No time (43%), lack of digital skills (39%) and poor Internet connectivity (24%) as their barriers to going online.

But in many ways, the report reflects the fact that getting online has never been easier. Michele Neylon, CEO of Blacknight, the leading Irish-owned web host and domain name registrar, is optimistic.

“These data show a huge growth in the number of businesses going online in the last 9 months. We believe that’s because the message is getting through that going online in Ireland is easier than ever before, and it’s ridiculously inexpensive. In March, the rules for registering .IE domains were radically reformed, and a process which used to be cumbersome has been simplified greatly. New web design tools such as BaseKit siteBuilder allow non-technical users to create a website in minutes, and there’s a widespread realisation that the future is online”.

IE Digital Health Index for SMEs 2018

David Curtin, CEO of IEDR, is calling on the government to invest in digital skills for Irish SMEs. Fewer than 1 in 10 SMEs have availed of any public or private digital funding or training programmes. 44% of SMEs said they would prefer to have one-on-one mentoring in formal digital skills training.

“Ireland’s e-commerce economy is worth €12.3 billion. Online consumer spending is rising at a rate ten times faster than offline, face-to-face sales. However, the bulk of the e-commerce spend in Ireland is with foreign companies (Virgin Media Digital Insights Report 2016). Yet our research shows high and increasing levels of SME awareness of the benefits of an online presence: productivity, cost control and sales growth. Simply put, we’ve gone far beyond the need to ‘raise awareness’ of the benefits of an online presence.  Now, we need to focus on developing programmes that upskill time-poor small businesses and help them to quickly implement digital sales options and e-commerce features.”

IEDR’s report suggests that funding for SME digitisation and website development should be routed through and overseen by trusted sector bodies and representative organisations. This will reduce the levels of administration by Department officials, and also reduce the perceived bureaucratic burden on individual SMEs, symptomatic of initiatives such as the Trading Online Voucher Scheme.

“On a macro level, industry and government need to build a new national Digital Activation Campaign that encourages online businesses to take the steps necessary to improve their communicating, transacting and boosting skills, and provide the inspiration to show them what’s possible. This campaign envisages practical interactive workshops for SMEs, hosted by LEOs and digital consultants, to teach SME staff how to build the online presence and manage the relevant digital tools. This could be incorporated into the proposed national Strategy for Small Business, recently put forward by the SFA.

“As part of this campaign, IE Domain Registry envisages the development of a ‘Citizens Information’-type website whereby SMEs have immediate access to comprehensive, step-by-step digital guides.

“The Department of Communications’ Trading Online Voucher Scheme, while useful, has had a low uptake, meaning it is not the vehicle to reduce the number of offline or digitally under-developed SMEs on any large scale. In contrast, representative bodies are trusted by their members, maintain regular contact with them, and have the sectoral insight required to build a funding or training programme that works within the parameters of their industry.”

For more information, read the SME Digital Health Index in full. Regional factsheets and supplementary appendices can be downloaded separately.

 

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Trackbacks/Pingbacks

  1. IEDR Announces ‘Digital Town’ Initiative for Internet Day 2018 - October 2, 2018

    […] Ireland’s e-commerce economy is worth €12.3 billion, but just 3 in 10 SMEs (30%) can take sales orders, and even fewer can actually process payments for transactions through their website (26%). Almost two-thirds (61%) of SMEs do not promote their services online and just 1 in 10 SMEs have taken part in a digital skills training or business funding programme. […]

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