SA businesses must future-proof by means of digital innovation
• Sudden upheavals, long-term downturns and the need for new customers require firms to evolve
The need for greater digital transformation throughout SA’s business landscape can be a tricky concept to grasp — after all, the digital landscape is decentralised, ephemeral and seemingly already present in our daily lives. So, what more should be done?
As a nation we cannot handwave the need for progress because we are comfortable with the status quo. Unless built on a solid foundation of continual progress, the future will not be kind to SA firms as they become increasingly forced to play catch-up with the rest of the world.
But digital transformation is not like brushing your teeth. Whereas cleaning one’s teeth is an act of maintenance, the push for a continued and widespread transformation of digital systems, spaces and practices moves beyond mere upkeep. Instead, the cumulative and amplifying effect of investing in digital capabilities will benefit consumers and businesses alike.
For businesses specifically, continued digital transformation and innovation can promote greater agility, unlock operational efficiency, enable the ability to implement new business models and expose companies to new markets.
ADAPT OR LIQUIDATE
The indifferent cruelty of the Covid-19 pandemic affected every aspect of our world. For many businesses, Covid-19 made the need to adapt to sudden macro risks abundantly clear. Those whose systems allowed for adaptation thrived (think Checkers, Naked
Insurance, The Unlimited and Yebo Fresh).
But Covid-level disruptions are, unfortunately, not unique. Load-shedding, the advent of artificial intelligence (AI) and disruptions to supply chains from halfway around the world all underline the same point — anticipating the unexpected is tough, so rather ensure that you can adapt and potentially exploit the unpredictability of a globalised environment.
Able (digital) systems won’t ensure a company’s survival, but leaving home without one will intensify any potential disaster faced.
However, sudden upheavals are not the only instances that require flexibility. A long-term downturn in a market can stress and strain any business and, ultimately, will also require a business to adapt or liquidate.
Think of media companies switching to a subscription model (from their previously ad-driven revenue stream) to ensure longevity in the face of looming macroeconomic hardship. This kind of evolution is not limited to patching leaks, as a flexible digital system allows for proactive exploration of potential new businesses (such as through venture building), thereby futureproofing your company in an unpredictable world.
GROWTH AND UPKEEP
For those businesses not facing
A LONG-TERM DOWNTURN CAN STRAIN ANY BUSINESS AND, ULTIMATELY, WILL REQUIRE A BUSINESS TO ADAPT OR LIQUIDATE
uncertain economic outlooks, growth remains a concern. And if you need to grow, what’s simpler than getting more new customers — better yet, ones that no-one else is targeting?
Lulalend did exactly that, having opened its doors to a wealth of new customers by launching Lula, a digital business banking offering, and raising significant capital from established investors and financial institutions.
One avenue for finding new customers is by reaching new communities, and in this regard tech solutions shine as they are generally not restricted by geography.
And for consumers, greater access to products and services is always a boon.
As new opportunities, markets and populations emerge, businesses face potential difficulty in absorbing new customers and clients. Since the cost of acquiring a new customer can be so directly linked to the profitability of your operations, it stands to reason that with rising acquisition costs those who do nothing will gradually become less and less profitable.
However, as leveraged by mobile network provider Rain, investing in advanced business analytics, external research, creating feedback loops and designing offers in the digital space can help speed up customer acquisition or lower the costs involved.
Ultimately, costs determine a company’s trajectory. Even for the most dynamic and elastic of businesses, operational inefficiency and the associated costs have the power to scupper any hard-earned momentum and growth. Inefficient daily processes, whether your own or those of business partners or vendors, erode your business around the edges and cede power to competitors waiting to scoop up your clientele.
Fortunately, virtually anything can be automated or streamlined, and percentages saved here and there all help to make you leaner and more competitive.
TRICKLE OF BENEFITS
For customers, the march towards greater digital transformation across the business landscape results in a steady trickle of benefits: a greater diversification of products and services, lower costs (which would otherwise be passed on to consumers) and an overall improved customer experience.
With ultra-smooth sales and onboarding, tongue-in-cheek and often meta marketing, Naked Insurance and start-up Pineapple are making big inroads into arguably one of SA’s oldest and most developed marketplaces.
What Naked has done differently is to employ tech to target and service a completely different demographic that none of “the usual” insurers have managed to capture yet. Pineapple has a similar target market, but it’s using automation and tech to streamline its operations.
This all bodes well for you and me — both as customers and as employees of the many businesses we all rely on.
We should not limit the positive effects digital innovation can have in SA. Business leaders and decisionmakers must ensure they are taking a proactive and progressive approach to their digital transformation journey if they want to promote continued investment and lead their industries by example in embracing the importance of digital infrastructure in our country.