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close this bookInformation Technology in Selected Countries (UNU, 1994, 148 p.)
close this folder1: Development of information technology in Ireland
View the document(introduction...)
View the document1. Introduction
View the document2. Historical perspective
View the document3. Government policy and the role of key institutions
View the document4. Development of the electronics industry
View the document5. Development of the software industry
View the document6. The telecommunications infrastructure for it
View the document7. Manufacturing applications of information technology
View the document8. IT applications in the service sector
View the document9. The impact of IT on employment
View the document10. Education and training in information technology
View the document11. Summary and implications for developing countries
View the documentAppendix A: IT-related courses in tertiary-level institutions in 1987/88
View the documentAppendix B: EOLAS innovation support programmes
View the documentReferences

8. IT applications in the service sector

Service Sector Employment Growth

The relative importance of the service and manufacturing sectors of the economy has altered considerably during this century. Table 1.10 sets out the changes since 1926. After Independence more than half of Irish employment was in the extractive industries: agriculture, forestry, fishing, and mining. By the 1980s this had been reduced to less than 20 per cent and the sector continues to show a decline. The transformative industries - manufacturing, construction, and utilities - increased from a relatively unimportant sector of employment in 1926, accounting for only 13 per cent of jobs, to nearly 32 per cent of employment in 1981. The service sector also experienced significant growth in employment. In 1926 almost 33 per cent of working people were employed in the service sector, which now employs more than half the workforce.

Fig. 1.4. Present and planned usage of office information applications, 1986 (Source: FAS, New Technology and Office Skills in Ireland, Dublin, 1988)

Fig. 1.5. Present and planned usage of financial and other applications, 1986 (Source: FAS, New Technology and Office Skills in Ireland, Dublin, 1988)

Table 1.10. Percentage employment in extractive, transformative, and service sectors, 1926-1981

















Source: Adapted from Ref. 38.

Within the service sector there are four distinct groups:

- distribution services,
- producer services,
- social services,
- personal services.

In common with experience in many other OECD countries, service sector growth occurred only slowly in the 1950s and 1960s, and accelerated in the 1970s. Distributive and personal services have remained fairly constant, with virtually all growth over the last three decades coming from social services and producer services.

Within the producer services sector, it has been the financial (including banking) and other business, accounting, engineering, and architectural services that have grown most rapidly. The increase in social services has been due to increased investment by the Irish government in the health, education, and public administration areas.

The services sector share of total employment is somewhat lower in Ireland than in many industrialized countries, though higher than that prevailing in most developing countries. As in manufacturing, the service sector could benefit from productivity gains accruing from the application of information technology by reducing the cost and increasing demand for services.

The Sectoral Development Committee's review of IT applications in the services sector highlighted some priority areas and provided some useful indications of future developments within the service sector:

(1) For some services, information technology is a marginal issue and these are unlikely to be affected by future development. Many "personal services" fall into this category (e.g. cleaning and catering).

(2) There are subsectors that can be thought of as "creators" of an IT environment and that set the conditions within which the sector must operate. This group includes communications (the subject of section 6), banking and finance, and "miscellaneous business services," which include computer services and electronic information systems.

(3) The remaining subsectors can be considered as the "clients" of the IT-oriented services. The technology has the potential to alter their structures and the nature of their services in very different ways.37

The Sectoral Development Committee (SDC) recommended that the following were top priority subsectors for IT initiatives: retail trade, education, and government. A second level of priority was assigned to wholesale trade, insurance, training, information services, particularly in relation to tourism, medical and health services. Some of these are covered in the remainder of section 8.

IT in Banking

In 1981 the NBST (now EOLAS) identified banking as one of the areas of white-collar work in which IT would have an adverse effect on employment levels. It was recognized that during the 1960s and 1970s the major Irish banks had been investing in computers. Their adoption brought about the automation of basic accounting functions whilst leaving the more labor-intensive "front-office" operations untouched.38 It was only in the 1980s that the banks started to introduce the Automated Telling Machines (ATMs). Initially, these were located on bank premises but it is predicted that their use will extend to other locations - shopping centres, garages, factories, and office blocks. Irish banks have been somewhat slower than their counterparts in other countries to adopt IT. This may be a result of:

(a) the state of the Irish communications infrastructure;
(b) industrial relations within banking;
(c) the size of IT investment relative to the size of the branch network.

The SDC concluded that, with the current rate of investment, IT is starting to transform the banking environment into an "IT environment."37

Future Trends

In order to facilitate branch transaction processing, Irish banks have developed leased-line systems for their own specific use. For security and other reasons they are reluctant to transfer to the public data network. However, with the advent of electronic funds transfer it may be necessary for banks to utilize EIRPAC in order to support client access to accounts. In the longer term, consumer access through cable networks to banks must be considered, and trials abroad of home banking suggest that it will be increasingly acceptable to the public. In order to link with other national and international banking networks, it will be necessary to establish and conform to international standards.

Banking and financial consultancy services are expected to be target areas for the early implementation of expert systems. On the consumer side there are other possible developments. One is towards the concept of the "money shop" wherein all financial services could be available (banking, building society, insurance, and advisory services).38

IT in Retailing

The retail trade was deemed by the SDC to be a top priority for accelerated IT applications, owing to the far slower adoption of point-of-sale (POS) systems. This in turn is holding back the orderly introduction of electronic funds transfer (EFT).37

Apart from EFT and EFT/POS, Irish retailers have been slow to adopt other IT applications, many of which are both feasible and desirable. One such example is that of basic stock control, progress in which has been very gradual. Computers are being used for administrative functions in some of the large multiple and department stores. As yet few smaller outlets and chain stores are moving towards branch computing. The only significant mail order application in Ireland is by Shannon Mail Order, where automated stock control reduced order processing time from seven days to one day.

Inter-company networking would be of enormous benefit to small retailers (e.g. Spar, Mace, Centra outlets), many of which are waiting for their wholesale suppliers to initiate systems. Larger supermarkets would probably require leased lines.

Future Trends

Point-of-sale systems have been available for many years but are evolving through the use of electronic cash registers rather than through the computer initiatives of large retailers. The scanning of bar-coded goods has also been introduced by Superquinn and Quinnsworth supermarket outlets in two of their Dublin branches. This has resulted in considerable reductions in queuing time and errors in transaction processing. Roches Stores has introduced POS scanning systems in Cork and Limerick, to improve customer service and speed, stock control, cash reconciliation, and level of profitability.39 Overall, Ireland has been slow in introducing scanning compared with the United States, Japan, and Europe.

The next stage is for the replacement of cheques and credit cards by electronic funds transfer through the use of "smart cards," but these can come about only when point-of-sale systems are installed and understood.

Another range of services to be launched shortly is a computer-based videotext service for banking and shopping from home. It is being developed by a consortium that involves Telecom Eireann, Quinnsworth Supermarket, Independent Newspapers, and other financial institutions. Modelled on the French "Minter" network, which is now used by 3.4 million consumers in France, the pilot project, involving 10,000 computer terminals in Irish homes, will commence soon.40

Information Services and Libraries

The Steering Group/NBST report to the Sectoral Development Committee was rather dismissive of the current state of IT penetration into this subsector. However, the report did state that consequently there were clear opportunities for its introduction. Furthermore the "information services" have the potential to contribute to an IT infrastructure for other subsectors (e.g. welfare information provision in libraries).38

The level of IT application is highest in the education and special library sectors. With the exception of Dublin Public Libraries, there is virtually no application in the public library sector. Up to 1986, only 27 of the total of 150 libraries made use of computer-generated catalogue records. Twentytwo libraries possess or have access to library housekeeping systems (12 education libraries, 7 specialized libraries, and 3 public libraries). As yet, the two nationally generated databases- Serial Holdings in Irish Libraries (SHIRL) and the ISBN Region K (Ireland) - are accessible in microfiche form only. External on-line information services (excluding videotext) are used in 29 libraries.41

The most important factor inhibiting the application of IT in Irish libraries is the lack of resources for hardware and software. More rapid development is occurring in smaller specialized libraries that can tap a range of microbased and relatively cheap systems. However, in the absence of any coordinated library development, which could ensure economies of scale, there are a number of different micro-based systems in operation (INMAGIC, D-BASE II, SUPERCALC).

Future Trends

The level of application of information technology in Irish libraries is likely to increase. It is anticipated that the SHIRL and ISBN Region K (Ireland) list will expand and eventually be made available on-line. Future development in public libraries is uncertain but is likely to be influenced by the outcome of a proposed library automation project and the availability of financial resources. Recent developments in telecommunication facilities could lead to improved cooperation between libraries. The establishment of a centralized public library community information database is suggested as a means of involving public libraries in providing computer-based user-related services.41

IT in Government

Generally, applications for government departments have evolved through the bureau services provided by Central Data Processing Services (CDPS). Individual sections would suggest an application, after which it would be filtered through various mechanisms to the CDPS. With the availability of inexpensive hardware and software, this approach is increasingly inappropriately Since July 1956 the Information Management Advisory Service has issued Information Technology Planning Guidelines to assist departments in availing themselves of IT as a resource for management. This document sets out the need for IT planning, the potential benefits of IT, and organization of planning projects. It also contains detailed planning procedures to be followed in considering the current situation, specification of requirements, and completion of strategy and plans.42

Traditionally, government departments have invested in large-scale mainframe computers for extensive processing needs - social welfare, revenue, taxes, payroll, and personnel records. It is only very recently that the potential of personal computers has been recognized.

Future Trends

Considerable scope exists for the introduction of "electronic office" applications and for "vertical" applications to be made available across the public service, e.g. personnel and accounting operations.38 As yet, very little data communication actively exists in the public service. Individual departments, e.g. Social Welfare and the Revenue Commissioners, have operated independent and incompatible systems, even where a merging of such systems would be highly desirable. One highly innovative alternative approach has been successfully adopted in the Department of Industry and Commerce. It is a networked system using 3 micro or personal computer local area networks, 64 microcomputers, personal computers linked to a file server, and a file server.

The network operating system runs on the Novell Netware and applications can be selected from a menu - financial modelling, word processing, electronic mail, text retrieval, host communications to IDA computer, EIRPAC and external databases, network printing, tutorials, database, and statistics. The system was very quickly installed and provides a large number of employees with access to a considerable range of information.

As with manufacturing applications, the service sector has been relatively slow in adopting IT even where highly marketable software/hardware is available. This may reflect a lag period, coinciding with economic recession, which will lead to more rapid diffusion and adoption over the next decade.