The digital opportunity is here
South African companies are not moving fast enough towards digitalisation, says Brett StClair, head of digital products at Barclays Africa Group.
"We are miles behind, if we just take the impact of Moore's law where processing power doubles every 18 months and then halves in the same period. Are we seeing that kind of exponential growth in Africa? Absolutely not, we have to move quickly, not just investing in cloud and taking advantage of new business models like software as a service, but building out our businesses on digital platforms so we can attract customers and service them at massive scale," says StClair.
According to StClair, this will enable organisations to grow market share quickly and, most importantly, incur far smaller margins, enabling them to offer very competitive pricing. "These effects are just not being leveraged across Africa. My personal view is that we read about this happening in Silicon Valley and we don't have any working experience in these environments to truly understand the impact and what it takes when it comes to ways of working. So we need to leapfrog to where the rest of the world is and do this quickly. Our opportunity is that we have a young base of citizens who will need jobs, who can now be educated quickly in skills that matter. We have over a billion brilliant minds that just need access," he said.
StClair has spent the past 20 years building and growing digital businesses and products. After eight years working with Silicon Valley technology businesses, he is now focusing on helping traditional businesses become digital. His passions are digital disruption and sharing the lessons learned.
"I work at a large corporation sharing my knowledge of the Silicon Valley world, where I had the opportunity to work in a Silicon Valley start-up success called Admob (sold to Google for $750 million) and then to spend five years at Google where we grew from 5 000 staff, to when I left, Google hiring 5 000 people a quarter. So large corporations can be disruptive. The challenge is how do we shift large corporations' cultures and take heavy bets that might mean self-disintermediation," said StClair.
"But then on the same note, I see a far better chance of a Silicon Valley start-up disrupting African corporates than local start-ups, which is nuts, but they have the ecosystem and investment required to build these high-scale low-margin businesses. We can get this right in Africa if we start solving emerging market problems. The US will never be able to figure out the challenges faced by us, and there is our opportunity to build proof points for the venture capitalists to gain more confidence to support winning business models in digital," he explained.
"The first step is to understand what digital means to your organisation. So many people have different views of what digital means: is it just a digital marketing strategy? Is it using digital as an additional channel to sell and provide services, or is it any technology and use of data that is no longer legacy, which I guess in turn we have to ask, what does legacy mean to you too? For me, as we move away from onsite hardware and leverage cloud platforms and new business models driven by APIs, then you are truly leveraging the digital ecosystem," he elaborated.
StClair says once you understand what digital means to you, you need to make sure you get the buy-in from the entire organisation. "It is no good having a lone soldier representing digital. Businesses need to realise that if you don't go digital, or more importantly become a digital business, then they will always remain at risk to being disrupted by a competitor that is leveraging the scale, affordability and new business models that digital allows organisations access to," he pointed out.
"Culture is then the most difficult struggle because we are human and we don't like change. We have been doing our jobs in a certain way our entire careers, now along comes digital and your entire way of working radically changes. This is the most difficult part to ensure your organisation joins you on this critical journey," concluded StClair.
StClair will be a speaker at the Digital Economy Summit which is running in mid-October. He will be talking about Barclays Africa's digital journey story, explaining how it is shifting to a technology business like Google, and has made great strides in the digital space. This talk will look at some of the challenges it has gone through as well as its wins and gains.