No ‘new normal’ for SA’s digitally-transforming businesses
South African enterprises took a step backwards in digital transformation over the first year of the pandemic.
This is one of the biggest takeaways from the Digital Corporation in South Africa 2021 research study, conducted by World Wide Worx with the support of Syspro, Dell Technologies, Intel and Cycan.
The study shows that disruptions, lockdowns and staff unable to maintain operations remotely slowed down the roll out of new systems at head offices.
In fact, according to researchers, the so-called “new normal” is not a norm at all, rather the way forward for businesses will be based on how effectively they combine people, technology and efficiencies.
The study shows the slow-down came despite expectations that remote working would accelerate digital transformation due to the demands it placed on companies to be able to operate digitally.
As many as two-thirds of respondents said they had gone backwards in digital transformation, an indication the pandemic slowed efforts to digitalise organisations.
While many of these had slowed, one in five, or 20%, said the fall had been significant. This, in turn, hampered their efforts to create an efficient remote workforce, with almost the same proportion (24%) saying they had only a few staff members working remotely throughout the year.
On the other hand, the proportion of companies that increased their levels of digital transformation over the first year of the pandemic (15%) is close to the proportion of those that had all staff working remotely (18%) over this period.
Almost two-thirds (64%) of South African enterprises expect all staff to make a full return to the workplace, with fewer than one in five (18%) expecting to accommodate half or less. This means while the world of work will be utterly changed, there is no unanimity about work-from-home being the new norm.
This is good news for the commercial property industry, as well as infrastructure providers, which will be tasked with equipping organisations for a more flexible future, the study found.
On the proportion of companies that expect staff to be on call whenever needed, while a relatively small 12% of respondents expected 24/7 availability, another 22% want staff available on an ad hoc basis at any time the company requires them outside office hours.
“While companies have almost unanimously embarked on a digital transformation journey, the majority of workforces have had to adapt to COVID-19, with the transition to remote working impacting efforts to digitalise organisations,” says Deirdre Fryer, head of solutions engineering for Syspro in Europe, Middle East and Africa.
Fryer adds that businesses have been forced to adapt to new environments, to become agile and be “ready for anything”.
“Technology is non-negotiable and when it comes to digital migration, there is no ‘one-size-fits-all’ approach. A variety of technology is needed to support businesses,” she says.
Going forward, Syspro believes enterprise resource planning will continue to represent the centre for information for digital transformation projects and there will be more focus on the need to embrace the human dynamic in the application of technology – particularly as digital transformation continues to emerge as an enterprise-wide consideration and no longer just the focus of C-level executives and/or the IT department.
Moreover, technology investment will be concentrated on achieving end-to-end application and holistic value rather than being, for the most part, isolated and largely siloed, says the firm.
Despite the slowed pace of digital transformation, only 8% of the respondents decreased their spending on IT, and almost half increased this spending. This can largely be seen as a response to remote working and equipping staff to work from home, rather than for transforming processes, the study notes.
“Remote working needs a digital sauce,” says Bryan Hattingh, CEO of leadership trainers Cycan. “It is not only that the digital medium is essential for working flexibly, but also that it allows greater innovation in leadership. That needs, among others, investment in innovative processes.”
Where is the spending going?
“Spending is surprisingly uniform across numerous operational categories, from computers and cyber security to accounting and e-commerce,” says Arthur Goldstuck, CEO of World Wide Worx and principal analyst on the project.
“However, in terms of budgeting priorities for specific technologies, one category stands out above the rest, namely connectivity. That tells you almost everything you need to know about the information worker during the pandemic.”
While some operational categories of IT spending were at the bottom of the list, none was cited by less than 62% of respondents.
Greg McDonald, director of systems engineering at Dell Technologies SA, confirms that technology has served as an enabler to remote work since the onset of the pandemic.
“While most companies have embarked on some sort of digital transformation pre-pandemic, efforts to digitalise slowed with the need to focus on remote working set-ups with connectivity standing out as a priority,” he says.
“However, there is a direct correlation between how transformed an organisation is and how equipped it is to facilitate remote work. The fourth industrial revolution is here, and budgeting priorities show how organisations are mobilising in response to this with business intelligence, cloud computing and software-as-a-service at the top of the spending list.”
One of the most fascinating findings of the research is that despite the economic slump of the past year, the price of IT products is still not the most important factor in purchasing decisions, although it comes close.
The top three factors are quality of product or service; maintenance and after-sales service; and price.
While the later has never topped the list in World Wide Worx research, it has always been part of what Goldstuck calls “the IT golden triangle of quality, service and price”.