Accelerate the internet, drive people’s experiences via technology and you’ll achieve your digital transformation ambitions across the SA market.
CIARAN RYAN: Digital transformation is a phrase we have heard repeatedly since the onset of Covid. Companies are reconfiguring the way they do business by adopting a hybrid model, allowing employees to work from home and the office. Companies have also been forced to change the way they interact with customers, many of whom are now perfectly comfortable with online interactions.
So what is digital transformation, and what have we learnt over the past nearly two years since the onset of Covid?
Joining us to discuss this is Nkosi Kumalo, managing executive at the digital EXA Business Unit at BCX, a division within the BCX Group that helps with digital transformation conversations within the enterprise market. Welcome, Nkosi. Why is digital transformation important and where is South Africa in terms of adopting digital transformation?
NKOSI KUMALO: Thank you. Digital transformation is really important, especially in light of changing consumer needs, the way consumers are looking to engage with businesses going forward. The prevalence of the internet is obviously driving the way consumers want to engage with businesses. To put it in simple terms, technology is changing the way businesses do business with their consumers. Almost every single consumer now has access to a device, either a phone or a laptop, and the way they engage with businesses through these devices really forces businesses to embrace transformation from a digital point of view.
So if you look at where South Africa is, especially around digital transformation, I think I would probably look at this answer around three different things. What is the population of South Africa and the penetration of the internet right now in South Africa?
I think if you look at the global perspective, the internet has about 60% penetration across the global population. South Africa has about 64% penetration and the internet is growing at about 4%, 5% on an annual basis. So I think there’s a big opportunity, but that opportunity is obviously hampered by government regulations in terms of providing telecoms companies and internet providers [with] access to resources that they need in order to accelerate penetration from a digital migration point like spectrum.
The cost of the internet is obviously affected by roaming agreements between different service providers. So the cost needs to come down to make sure that we drive the penetration of the internet. Digital transformation I think is still at its infancy in South Africa. It can be much better if you look at the larger population of South Africa, but it is a big opportunity.
We tend to look at South Africa in line with what our counterparts internationally are doing. And [internationally] we think the embracement of the internet is really, really good and is accelerating. We follow the same trends in South Africa.
South Africa is said to be about two years behind our international counterparts and I think we just need to [go] full throttle and accelerate the penetration of the internet in South Africa. There’s no reason why we should not do that, especially when you look at the mobile penetration in South Africa. The statistics we see here [indicate] we’ve got 168% penetration of mobile devices in South Africa, with people having more than one SIM card. The devices are in their hands. Accelerate the internet, drive the experiences of people via technology and you will achieve your digital transformation ambitions across the market in South Africa.
CIARAN RYAN: All right. You’ve given us some of the trends in terms of adoption of mobile devices and data. Give us some of the other trends, both micro and macro, that are going to be influencing digital transformation going forward.
NKOSI KUMALO: Let me give you maybe a controversial one, or a more topical one, because whenever you engage around the fourth industrial revolution, digital transformation, people already start thinking about jobs. Are you going to be bringing in bots that are going to take away jobs? From a macro point of view, if you look at where South Africa is, we already have a big challenge in terms of the unemployment rate. In last year November [it was] announced that we are sitting at the highest-ever unemployment rate we have seen in the past 10 years or so. That is a big concern.
If you look at the different industries that are not growing, it just makes the conversation around digital transformation even more difficult. So the reality for me is if you start looking at digital transformation as an enabler, an opportunity for newer jobs that get created as a result of this, you start having a better conversation instead of [one about] how many jobs you lose.
Historically speaking, there have been so many jobs that have gone extinct: the milkman, movie-projection operators, postmen and all those. With the growth of the services industry comes technology. Software development has jobs that were never there: drone operators, digital marketers, radiographers, data scientists – these are all opportunities that are created by digital transformation.
I think these are the trends that we are seeing, and [for example] you see universities starting to offer courses around data scientists – these are big opportunities that will ultimately help businesses to really align with how basic customer requirements are satisfied.
But if you look at it at a micro level, digital transformation is very impactful in changing how businesses operate today. You could look at the way banks operate now. How many of us listening to this podcast have been to the bank more than 10 times in the last 10 years? This is really digital transformation working now – the app that they push on your device, and the fact that you can open an account, check your bank balance, get your statements, and the audit trails via an app or via an email. This is digital transformation at play.
Some of our kids today are not even using voice as a capability from a technology point of view. They text all the way, they leverage the internet and they fully utilise [it], more than we do as adults.
I think definitely these are some of the trends that you are seeing, and the workforce of the future is a workforce that can work very well under social distancing, and just leveraging technology to get stuff done without being in the same room.
CIARAN RYAN: Let’s get down to the nuts and bolts. What are some of the challenges for companies going down the road of digital transformation at this time?
NKOSI KUMALO: There are a few. I think a lot of businesses are really struggling with the concept of digital transformation because it is quite a complex approach towards doing ‘business as usual’.
First of all, if digital transformation is not embraced at an executive level, you’ll find it very difficult for the operational people to drive transformational initiatives, because it means you have to stop doing [business] how you have been doing business, and start embracing new ways of work.
If you think about the transport and the logistics industry, the reality for me is that autonomous vehicles, as an example, are a reality – they will be coming. We are starting to see different industries embracing these, like in the mining industry and other automated equipment in the manufacturing side. Some of these are capex-heavy, some of these require skills, and skill is quite a scarce resource.
I’ve just said to you that unemployment is high, businesses are struggling to survive, there are lockdown issues. If the cash is not coming in, how do you continue to invest from a digital point of view and change your business models?
These are some of the challenges.
People are now saying data is the new oil. The value of data that is generated by businesses can really help them in becoming forces of the future. Think about it. Look at how technology companies are starting to really grow and become multi-trillion organisations globally, leveraging the data that you and I are generating in the way in which they change how we engage. They understand exactly who we are, and they give us exactly what we are looking for, just looking at how we navigate the internet and all that. There’s a lot of value in that.
You see banks are starting to have different competition. Retailers are becoming bankers, mobile operators are starting to play into the banking environment; the industry consolidation and the breaking [down] of the walls and making sure that you create, are all enabled by digital transformation.
So to be honest with you I think if businesses are not clear in terms of what their strategy is, how they underpin that strategy with technology, and put their money in the technology transformation keys, you have a challenge.
One of the things when I speak to customers [is that] you find that the CIO does not even have a seat at the executive table. How do you expect the CIO to be able to drive a digital agenda when they’re not even part of the people at the table from a Exco point of view? Some of the CIOs report to the CFO, and the CFO probably doesn’t spend 50% or more time in the IT space. The CIO actually understands some of these requirements. Hence some of the businesses now are bringing in digital officers etc. This is a deliberate effort to make sure that you bring in the business requirement, you bring in the technology capability, and point it to the needs of the customers.
CIARAN RYAN: I think that’s a good point that you made there.
So if those are some of the challenges in adopting a digital transformation roadmap, give us some of the opportunities.
NKOSI KUMALO: There are a lot of opportunities. I think first of all – and I’m now talking to a business that is looking to embrace digital technology – the most important question I think they’re asking is: ‘Where do I start?’
If you partner with the right service provider who is able to come into your business and help you with digital readiness, a digital-maturity assessment, and is able to tell you that, ‘Guys, when you look at your skill, your workforce, the technology that you have in your business, the maturity of your users, and a whole host of components that affect your business’ – the whole ecosystem – and [then] tell you how you should start, based on the readiness of the whole ecosystem, I think that’s a big opportunity for most businesses to really understand where they are and how difficult the journey is going to be going forward, and how much investment they should put in there.
Some of the businesses are sitting in a sweet spot. Really. They’ve got customers who are matured, who are already working on the technology keys, [and] they’re driving them quite hard – and they’re not leveraging the opportunity because they’re still protecting legacy. It’s really, really important to partner with a service provider who will help you, hand-hold you, and take you through that.
Some businesses have consultants, consultants who really come in and talk to them about business processes – but they don’t bring the technology keys into it. If you’ve got the right partner who understands business processes, [who] can also craft a solution for you from a technology point of view and, most importantly, [provide] a roadmap, [saying] this is where you start, this is where you want to be in 10 years, this is how much you’re going to be investing. At least when you have a plan you can navigate your way towards your ultimate panacea.
So I think that’s really the big opportunity.
What we are also seeing as BCX is that digital transformation has driven quite hard in the consumer-orientated industries. So, if you look at businesses that deal with individual consumers like banks, like retail, like private healthcare or at least the healthcare industries, that’s where big opportunities are for digital transformation, because there you are starting to talk about customer experience, or getting your customers to guide you in terms of how they want to experience your service.
I’ll give you a simple example. Look at the online shopping apps that are coming from different retailers. They’re not all performing the same way but there’s one retailer that we all know which is using scooters to deliver to our houses today, and they’re doing [it] absolutely well. In fact, personally in my household, I’ve been given the responsibility to buy every grocery item for top-up on a daily basis – bread, milk, and other things that we are short [on]. While I’m sitting in my office, I just go into the app, place an order, and in 60 [minutes] they have delivered.
So BCX is an organisation that is poised to actually help our clients all the way from the infrastructure level, because we’ve got cloud services, we’ve got good security, we are a network service provider, and we’ve also invested in the data level of services, giving you data scientists and all the skill that you need.
So reach out to us. We will be able to engage you in your digital transformation requirements across the whole technology spectrum.
CIARAN RYAN: Nkosi Kumalo, we are going to leave it there. That was Nkosi Kumalo, managing executive at digital XA Business Unit at BCX.
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Autor(en)/Author(s): Ciaran Ryan
Quelle/Source: Moneyweb, 23.03.2022
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