Entrepreneurs and commercial businesses that pull more technology levers will improve their bottom lines and deepen their market penetration in the future. Those that don’t will either be left behind or forced to adopt the changes to survive. Standard Bank cautions that it is crucial to improve education to ensure that business owners and entrepreneurs understand exactly what new tools they should be using to thrive.
Standard Bank is already providing incubators where entrepreneurs can go and receive the tools and training needed to grow their businesses, or ideas.
“It is a space to meet and to help entrepreneurs utilise the tools to grow. They are taken through programmes that focus, for example, on the drivers of profitability,” says Karl Gotte Standard Bank Commercial Banking.
While most businesses feel they are being overloaded with information, simple technological solutions can be found to delve into that information to find data that can be used to benefit the business.
“There is so much information out there that can be used to gather research of what’s going on in your industry to help you manage a business better,” says Gotte.
However, a concern is that not enough new and existing commercial businesses are adopting technology as quickly as they could – especially among the older generations of business owners who have grown accustomed to doing things a certain way. But change is coming even for the slow adopters.
Gotte states that “It is vital that one drives innovation to enable self-creating opportunities or be open to partner with organisations that understand the nuances of innovation. It is vital that companies not just craft strategies that promote innovative thinking and digital adoption, but attract and retain the right people that can adapt and flourish in changing environments. In the 2014 Digital Evolution Index study, South Africa ranked as the fourth quickest growing digital economy.
The country has had an evolutionary burst from 2008 due to the declining costs of data and the increasing smartphone adoption rates. This has created new markets for businesses to tap into, that previously never existed. However digital leaders need to be agile enough as an organisation to adapt to market shifts or face being overtaken and even becoming irrelevant in the eyes of the consumer.”
“I don’t think commercial banks or their customers can resist the move to digital channels any longer,” says Gotte.
“There are definitely major advantages to migrating for banks and their customers, with lower costs being just one of them. Some commercial clients have been doing things the same way for many years and are happy with the status quo. But this is where banks can really play a role in educating them about the massive benefits they will face. Simple solutions being developed filter through the entire value chain and can not only weed out inefficiencies that have existed, but also help develop new lines of business. It’s just a matter of making a start – for banks and their customers,” he says.
“There are certainly major benefits to making the leap to new technology and we will see some big moves in Africa in the next decade by companies that can harness these efficiencies. But the challenge is taking that first step,” says Gotte.
There is a certain segment of the population that will never use technology, but as it becomes the norm more pressure will be placed on people not using it to start using it. Gotte also cautions that this does not mean simply jumping in and becoming a totally digital operation with absolutely no physical presence.
“It is about the user experience and what the customer sees. However, all businesses are different and some will be more digital than others. Those that are “digital-only” would have to be very niche. It is a balancing act and depends on the business and the demands of clientele.”
His advice is to also ensure a company has a dedicated capability to ensure the migration to digital has the desired business effects.
“You can’t just pay lip service to it. It must be a major focus and it will always be better if you get someone to look after this part of the business. Then it will get real traction.”
Going digital is certainly an easy way to get to the market, especially for entrepreneurs. It opens up a lot of new markets and can provide real solutions, like when a business is under pressure from a cost perspective.
A lot of consumers are moving to buying online already, including in Africa and this trend will continue.
“If a business is not there, they are limiting the market they can play in,” concludes Gotte.