Driving digital transformation in Africa
Africa is leading the way in digital transformation, itsunique socio- and geo- economic challenges has led to innovation in mobiletech, mobile wallets and cashless payment solutions.
With the current digital acceleration taking place withinAfrica, multiple drivers have been identified as a necessary means to digitallytransform, one of which includes managing rising customer expectations.
As the majority of companies are optimising their digitalofferings, customers have increased their expectations of how well the brandthat they’re interacting with performs digitally.
One can see this coming through in the customer salesthrough ecommerce - specifically in mobile and social commerce; where mobilepayment options are giving more choice for the African customer.
As a result, African customers are now examining functionssuch as user experience, speed, data security and so forth. If organisationsfail to digitally transform their business activities, they are at a greaterrisk of losing customers.
Africa has unique challenges and with consumers increasinglymoving towards online channels due to the rise in ecommerce, businesses need togather data through both channels to track and predict consumer purchasinghabits to further improve conversion rates.
Bearing this in mind, ecommerce companies should considervarious options around their fulfilment of product and service delivery.Businesses should take their lead from companies such as Makro who haveincluded a click and collect option. Pargo allows ecommerce companies to usethem as a central drop off point for click and collect capabilities.
African businesses need to recognise that digitaltransformation aids in developing insights into customers’ needs and wants,which will provide necessary data-led decision making to drive digitaltransformation projects in the organisations.
Where customer insights contribute to effectivelyidentifying the needs and wants of your consumer base, it also allows theorganization to personalize their product or service offering, hereby leadingto a greater customer acquisition and retention rate.
What does digital transformation mean?
Digital transformation is not a single project or once-offprocess, it is a strategy which needs to be embraced by the whole organisationwhich will be implemented over time. Digital transformation refers to theintegration of technology within the core business activities of the company inan effort to drive value and improve the delivery of their product or service.
This means it will impact all key touch points in thebusiness from sales, ops, administration, manufacturing, distribution, deliveryand finance. It is a big opportunity for African organisations to embracedigital transformation to remain competitive in a global digital world and insome cases will allow them to accelerate and “catch-up” with globalorganisations.
African companies will benefit from digital transformationas this paves the way for greater employment opportunities, optimises companyperformance, and ultimately increases the bottom line of the company.
The focus for CIOs
The CIO role has come to the fore in recent yearsresponsible for the management, implementation and usability of tech andinformation. They have become highly strategic assets that now drive innovationthroughout the business influencing top and bottom-line growth.
The overarching goal of digital transformation is toincrease revenue, however it is also about preparing the organisation for thedigital age. Under this umbrella, companies aim to improve the speed of theirwork processes through automation, and drive consumer satisfaction.
This is turn will contribute to the customer retention andconversation rate. Furthermore, digital transformation can improvecollaboration efforts within the company and increase employee productivitylevels.
These are some key areas for CIO’s :
• Removingchannels that no longer perform
• Driving theintegration of data and insights into their product and service offering
• Promotingagile learning
• Establishinga cultural workspace which recognises that digital transformation adds to thework demands that are placed on employees and aims to address these challenges.This may constitute a change in management.
• Identifyingthe required skills and resources
Benefits of digital transformation
The benefits of digital transformation are not isolated toone project as it will impact various touchpoints over time as one implementsthe strategy. Of course, one will see improvements on a micro-level with somequick win initiatives which will start to impact the macro-level of a business.
This can be seen through the pandemic where business wasfaced with a survive at all cost through changing how they work, how they findcustomers and how they drive their sales.
Some of the benefits include the following:
• Enhancedcustomer experience through a true omni-channel experience
• New digitaland geographic sales channels
• Lower coststhrough automation
• Increasedefficiency through automation
• Analyticalinsights of data and customer habits
• Betteragility in order to respond to market or customer needs
• Promotes adigital culture within an organisation and supports innovation
• Maintains acompetitive advantage
Challenges
CIOs face many challenges with implementing digitaltransformation strategies in their organisations, but they can vary fromindustry to industry. Some of the key challenges that companies may encounterin implementing their digital transformation strategies include the following:
• Employeepush-back linked to change
• Unstable ITinfrastructure as legacy systems cannot handle or deliver on specificrequirements
• Shiftingcustomer expectations means how one responds. It may require one to adaptfaster
• Financialconstraints as digital transformation requirements will be a significantcapital investment for the future
• Insufficientemployee skills with demand for IT skills and experience
• Choosing theright technologies
Choosing the right technologies
Which technologies are important to digital transformationand how should CIOs go about identifying these technologies? CIOs areencouraged to invest in cloud technologies as this vastly improves theefficiency of company operations, as well as the productivity rate ofemployees.
Furthermore, cloud technologies remain cost effective andincrease the margin for flexibility, scalability and adaptability. Artificialintelligence (AI) is also integral to digital transformation, it automatescompany communication and generates analytics regarding consumer habits andconsumer queries. Cloud can provide the computing power at scale in order toprocess data and power AI tools.
The Internet of Things (IoT) is another area of focus, itconstitutes a system of interconnected devices that are connected to theinternet which allow for the transfer of data from the environment in which thedevice is operating.
The benefits of IoT includes enhanced communication,improving customer experience, and aiding in the automation process of businessactivities. One cans already see significant use of IoT in the manufacturingand agricultural industries.
Key trends in Africa
Some of the key digital transformation trends include thefollowing:
• Connectivityis still evolving and access for many Africans are still a challenge. 5G iscoming and will provide faster speed amongst mobile networks. Its intended useis to connect smart devices and machines more efficiently, whilst delivering aconsistent user experience and greater reliability.
• Automation isa key priority in business to ensure competitiveness. This goes further todaywith robotic process automation (RPA) which helps businesses automatetraditionally administrative computer drive tasks, streamlining workflows.
• Increase inconsumer data platforms (CDP).
• Greateremphasis on cyber security. We read about data security beaches, hacks, onlinefraud and so on. With so much digital innovation taking place, it also providesan opportunity for others to take advantage. Greater attention to securitywithin organisations is now a focus area.
• Greateremphasis on analytics to determine consumer led insights and inform thecustomer experience.
Developing a strategy
Developing a clear and effective digital transformationstrategy is the important starting point in the business. This is led throughbusiness and technology roles like CTOs and CIOs. It is advisable thatone addresses these key areas when creating a strategy:
• Conduct abusiness audit of the company. The CIO needs to develop an overview of the corebusiness operations of the company, assess the skillset of their employees, andunderstand how they intend for digital transformation processes to reflect thebrand values and culture of the company.
• Develop coregoals and objectives for the digital transformation strategy as this willinform the digital transformation processes that one intends to implement.
• Run proof ofconcepts when implementing new digital technologies. This allows for an easierintegration of digital technologies within the company processes, and allowsone to anticipate any bugs or challenges that need to be addressed beforerolling out the digital technologies at an official capacity.
• Establish aframework for the digital strategy. This includes assessing the skills that areneeded within the workforce to accommodate the new digital processes that oneintends to implement. It is also advisable that one examines the existingtechnology stack and assign key personnel to implement each stage of thedigital transformation strategy.
• Leverage theraw data sources and data platforms to develop key insights into how one canimprove the digital transformation strategy, and assess how well the digitalprocesses are performing within the company.
Successes in Africa
As mentioned, digital transformation is an ongoing strategyand often we don’t see the specific results other than in the success of anorganisation. Specific projects can be highlighted, but these are notnecessarily linked to the launch of a new fintech product or service.
However, providing customers with an omni-channel experiencewe suddenly realise how a company is listening to their customers. Traditionalbanks are investing heavily in their digital transformation and we see that inhow quickly their service offering is evolving through their online or mobileapp service.
South African businesses have heeded the call to digitallytransform their business operations in order to remain competitive in theirindustry. According to Deloitte, 67% of company leaders invested in cloudtechnology within their company operations. Furthermore, 61% of South African companies are investing incybersecurity software, with 53% of company leaders aiming to invest in AIwithin the year 2021.
South Africa’s mining sector is a practical example of howto successfully implement digital transformation techniques. One of thesetechniques include the implementation of IoT into machinery to allow for theeasy transfer of data to optimise mining operations.
The South African insurance industry is also incorporatingdigital transformation strategies as evident by Discovery. The development oftheir Vitality app, which is continually evolving, driving customer loyalty andproduct upsell opportunities.
Discovery made use of digital ecosystems to penetrateinternational markets by allowing their consumers to gain access to theirpartners such as British Airways or Europcar through the app.