Digital revolution beckons as lockdown pushes business to adapt
● Though the pandemic has propelled South African businesses into the digital era, there has been no shift in the proportion of companies that are regarded as digital leaders.
According to the latest digital transformation index, released recently by Dell Technologies, digital adoption in SA as a result of Covid-19 has been more about catching up than leaping ahead. Though the lockdown has been a major impetus for companies to adopt digital plans and put investments in place, the needle did not shift at all on companies that had “digital ingrained in their DNA”.
The index is the third produced in a twoyearly research project to track digital adoption. Dell partnered with research company Vanson Bourne to survey 5,300 business leaders across 23 countries over the course of last year. The study examined their IT strategy, workforce transformation initiatives and performance against a core set of digital business attributes.
The South African respondents, interviewed at the end of last year, revealed a near-doubling of companies adopting digital plans, from 23% to 43%. However, those defined as “digital leaders” remained at the mere 8% level measured in 2018.
That fewer than one in 10 South African companies are digital to their core, combined with huge growth in adoption, indicates that the pandemic has not yet produced a digital business ecosystem, but rather that it has poised the country for a digital explosion in the coming year.
Doug Woolley, SA MD at Dell Technologies,
says: “It clearly shows that organisations across the country have already begun to roll out significant digitalisation initiatives … These will start to take shape in 2021. In many cases South African organisations surveyed are ahead of the global average and can be seen to be advocating digital transformation initiatives.”
The research also highlighted positive attributes of the local economy.
“Two things stood out here,” says Woolley. “We always operate in real time. If you look at a lot of our digital successes, like our banking sector, our online ordering, these are operations that are striving to be 24/7 organisations. Our banks have a customer-first type of mentality, but using a digital footprint to manage it.
“Second, we spot the opportunity in a typically South African way, trying to find the gap in the market, and trying to be innovative, inventive and entrepreneurial.”
Woolley says the statistics also show that local businesses stand out for the way they share knowledge across business functions.
The survey shows that the main barriers to full digital transformation are lack of budget and resources (45% of respondents), poor economic growth (39%) and not having the right technologies to drive business success (35%). Two years ago, economic growth did not feature at all as a barrier, highlighting the deeper impact of the pandemic.
Nevertheless, the combined total of companies engaged in digital transformation programmes in SA came to 79%, only marginally behind the global total of 80%. At the same time, 84% of executives said they were in the midst of reinventing their business models — compared with the global average of 79%.
“The mindset has to be about execution. In two to three years’ time, I think we will be well established as digital businesses,” Woolley says.
“Last year was the time to build resilience, to become data-first businesses … As a country, we’ve done fairly well in weathering the actual business level.”
But only 44% of businesses intend to invest in artificial intelligence, while only one in five plan to invest in the digital distributed ledgers of blockchain in the next three years.
The country is poised for a digital explosion in the coming year