SA digitally incompetent

2014-06-05 00:00

MOST companies in South Africa have “tweeked” and “fine-tuned” their digital operations to become more efficient, but there hasn’t been much “radical transformation”.

This is according to Telkom group chief operating officer Brian Armstrong, who spoke at an event at Durban’s Hilton Hotel yesterday.

This is even though there is widespread acceptance among business leaders that the full digitalisation of business, from the back-office to driving top-line growth, will become a global tsunami in the not too distant future, said Armstrong.

He likened this attitude among business people to the psychology that enabled soldiers to breach their trenches in the face of machine-gun fire, during World War 1.

Research showed that in most cases, the soldiers believed they would not be shot, but that somebody else would be shot.

“We know the world is changing. At the same time our budgets are being cut … We used digital to improve our information systems and drive some cost cuts, but there has been little use of it yet to grow the business and interact with customers,” he said.

Armstrong said in the UK retail sector for example — online purchases already account for one eighth of retail sales — and the use of digital has moved from purchases to product research, customer reviews, price comparisons and other applications.

Armstrong said some 30% of South Africans have access to the Internet, much of it through mobile phones, but the figure was growing fast.

It was expected to reach the 70 to 80% Internet access penetration that is prevalent in most developed countries in a short period of time.

This would be speeded up by the demand for digital access from South Africa’s youthful population — when compared with developed countries — and “when this happens the South African market will transform radically”, said Armstrong.

The development of driverless cars and increasing use of robotics showed that digitalisation is occurring even in industries once thought they might be immune to it.

“Digital is as transformative for business as the industrial revolution was. The industrial revolution happened over two centuries, digitalisation is happening over two decades,” said Armstrong.

Managing director of technology strategy for Accenture, Lee Naik, said if businesses are not already talking to their consumers, or going digital in the front-line of their operations, they are unlikely to grow in the future.

Naik said digitalisation also brought intelligence to businesses in the form of insight and context.

He said businesses also need to protect themselves from cyber-crime — the FBI and Symantec rated South Africa as the third biggest hotspot for cyber-crime in the world.

“How do you mitigate the risk of people getting into your organisation [without digitalisation]?” he said.

“We know the world is changing. At the same time our budgets are being cut …”

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