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SA's digitisation journey: How are we doing?

While the country is lagging, local companies are all too aware of the need to digitise.

Marcello Pompa
By Marcello Pompa, Argility new business development and key account manager.
Johannesburg, 22 Oct 2015

In my previous Industry Insight, I argued that a number of factors are causing SA to fall behind other countries in the drive to digitise. I also said this opened a small window of opportunity for companies to get their digitisation strategies in place.

In this Industry Insight, I will examine the digitisation landscape across the South African industry. What are companies doing and what are the main issues?

The first point to make is companies tend to implement digital technologies in two phases:

Internally, to improve workflows, reduce costs and increase efficiencies. These initiatives are driven by two factors:

* The move to a paperless, digitised world - typically led by the finance sector. Enterprise content management solutions enable this, with functionality including: document and records management; archiving; imaging/scanning/indexing/rendering; and annotating, thereby allowing for easy and fast access.
* Managing the life cycle of digital documents.

Externally, to engage with their customers (B2C), other businesses (B2B), and employees (B2E) using various channels.

Key initiatives here include:

* Online e-commerce. Companies realise they simply have to be active in this channel, which is growing fast. Most companies already have Web sites but no transaction portal; also, many transaction portals are ineffective. Customer take-up is restricted by the availability of broadband.

* Mobile. This is the most accessible channel given mobile penetration rates. Companies are making good use of it but direct marketing is not (yet) possible. Again, customer take-up is hampered by access to mobile broadband and smartphones, which improve the experience.

* Social media, such as Google AdWords, Facebook, Twitter. This channel is growing but lacks focused and direct marketing.

* Point of sale. The challenge here is to link the customer experience within brick-and-mortar premises to what happens on other channels.

* Electronic data interchange for B2B communication. This has always been challenging.

As noted in my first Industry Insight, South African companies' digitisation efforts are hampered by low Internet penetration and high costs for mobile broadband. Experience tells me South African companies need to consider several key matters in order to increase their chances of successful digitisation:

* Don't try to reinvent the wheel. Digitisation is a long journey, and while it's difficult, it has been done before. It is best to work with an experienced partner to understand what needs to be done, and then with an implementation partner to get it done.

* As with all important initiatives, the right level of executive sponsorship is essential. The CEO and CIO have to be fully engaged in the project, particularly regarding why it is necessary and what the constraints are. Some companies are actually creating a new C-level role, chief digitisation officer, to address this need.

No two companies will follow the same digitisation journey.

* Governance and data security are two challenges that must be overcome as companies digitise. Given the large and growing amounts of personal information companies are acquiring in digital formats, and their vulnerability to hacking and system failure, they need to ensure not only that they have robust backup procedures in place, but also that their defences are strong. Regulators are showing increasing interest in this aspect, and laws like the Protection of Personal Information Act are putting the framework in place.

* Reconsider implementation strategies. The traditional project approach - building the Taj Mahal - is too risky when it comes to digitisation. What is needed is a more iterative, granular approach that concentrates on developing a basic solution fast, making the necessary changes and then scaling up. I call this "deliver, review and pivot". This approach ensures mistakes are made quickly so they can be corrected before too much money and time have been wasted.

* Understand the potential - and challenges - of big data. Businesses have always had a lot of data, but now they have much more - and the opportunity to do more with it. New in-memory analytics tools are making it possible for businesses to query their data instantly to support real-time decision-making. The technology now also exists to analyse unstructured data, such as data from multiple channels, to build up a fuller picture of the customer. For example, if John Smith buys an Armani suit in a store and an Armani shirt online, it is now possible to approach him with a special offer on Armani shoes.

* SA is not yet wise to the potential of machine-to-machine communication - the Internet of things. It is worth doing some preliminary brainstorming on what opportunities this opens up for companies.

No two companies will follow the same digitisation journey. To access the skills and experience they need, partnering with the right ICT company will be critical, as will de-risking the process by following the iterative "deliver, review and pivot" approach described above.

The future is certainly digital, but it will not be rosy for everybody. Digitisation is changing the face of whole industries, and businesses will need to be sharp in order to reap the benefits of the opportunities it is opening up.

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