Today’s business environment is constantly being disrupted by new market entrants using innovative technology, writes Rick Parry, chairman and CEO of AIGS.
There are the usual headline examples: The Uber app coordinates citizen drivers in a fleet-less taxi model that poses an enormous threat to regular taxis. And the Airbnb app manages travel accommodation in ordinary homes, mounting a major challenge to the hospitality and property industries.
And then there are the everyday cases: A corner bakery might launch a loyalty app that takes mobile orders and offers delivery at a 10% discount. It can do this because digital saves on resources, and it must do it because, unlike supermarket deli counters, it doesn’t have economies of scale.
Taking it seriously
Looks like the ball is back in Pick ‘n’ Pay’s court. But how seriously are organisations taking digital? Worldwide Research shows more than 90% of tech and business leaders believe digital transformation is critical, but 63% think their organisation is in denial about it.
As is often the case, we’re behind the curve in South Africa. Virtually every Forbes Global 2000 company is on some sort of digital transformation journey, while local uptake is limited to large organisations, banks and a few digital pioneers.
So, what’s holding us back?
* Scaremongering and hype – Could it be that it seems daunting, but isn’t? Every technology supplier and publication is talking up digital transformation, and we’re made to feel like dinosaurs if we don’t have a transformation policy in place. But scratch beneath the surface, and such strategies are in fact little more than high-level thinking with little practical details. No wonder seven out of eight organisations struggle, according to Forbes.
* Technology – Or could it be that the technology hurdles seem insurmountable, but aren’t? For example, everyone is talking up the cloud as though it’s something new and scary, but it’s been around for decades. Remember wide area networks, hosting, timeshare bureaux, software as a service, and managed services?
In fact, the true success factors of digitisation are simply an abundant supply of cheap bandwidth, sufficient device penetration, network reliability and mature software development practices.
Cheap and abundant bandwidth is already a fact of modern life in South Africa (it’s all relative, of course), and advances have been made elsewhere on the continent. Devices are cheap and available on data or payment plans, and innovation has shown that not even cross-border remittances or collaboration platforms need smartphones.
Where there is a need to store and access large amounts of data, highly reliable modern networks and dirt-cheap storage costs have democratised remote access and application delivery.
Then there is software – and again the news is good. There is a wealth of off-the-shelf commercial functionality in app stores. Most of it is available for all platforms, giving you cutting-edge innovation at your fingertips and global reach in a matter of days or weeks. To build a unique app, rapid cloud-based development platforms exist that let you create core functionality in weeks.
And when time and money are no longer such big considerations, you need only worry whether it makes business sense.
How long have you got?
Organisations need to take a short-, medium- and long-term view of this.
Yes, it’s serious: 55% of respondents in the research acknowledge they have less than a year to act before they suffer financially. It has been said that organisations that don’t digitise their businesses may have to close their doors in five years’ time.
Sadly, replacing your core back-end systems can take five to 10 years. But do you really have to do that?
In our view, it is neither possible nor necessary to enter this brave new era with a bang. In a follow up article, we will look at IT modernisation – otherwise known as ways to embrace digital transformation while preserving your current IT investment.