Digital transformation: Challenges and opportunities


Huawei Southern Africa Region Director of Media affairs, Edison Xie

JOHANNESBURG, (CAJ News) – THE current social and economic climate, as the world battles the Covid-19 pandemic, has provided serious impetus for digital transformation in business and in society. We will no doubt accelerate along this path, but there will be significant challenges and opportunities along the way.

Digital change is incredibly difficult
As any company leader knows, organisational change is challenging, no matter what form it takes. This is particularly so, when it affects the fundamental ways of doing business, for instance taking a bricks-and-mortar organisation online. A McKinsey survey1 found that only around 30% of digital transformations are successful. Any business embarking on such a change should not expect it to be plain sailing.

The reasons digital change can be so hard could be due to staff resistance, digital inexperience, organisational complexity, or budget limitations. The way to overcome these is to ensure that digital transformation is part of the company-wide organisational strategy, with all the leadership, organisational and budget support that this entails. It’s also vital that the skills be acquired to manage a digital-first business, whether by recruitment or training.

These are significant challenges, however, the good news is that the opportunities that digital transformation presents are enormous, and will allow organisations to not just survive the pandemic, but build a sustainable business model that will see them through the new era our society is entering…

Better customer relationships
CRM, customer experience and customer journey mapping are all vastly simpler and more effective using digital means. It has also become almost indispensable that companies have a digital presence and retail functionality, as users are already doing all of their shopping and comparisons digitally. It is therefore crucial that business not just be digitally transformed, but that their offerings be better than their competitors’.

While it is true that some of the human component to customer relationships is compromised in the move to digital, the efficiencies that digital enables can outweigh this. To be able to make recommendations based on a customer’s digital footprint, to tailor your offering to their needs in real-time, to ensure seamless, effective fulfilment… These all improve the customer experience and make digital transformation essential in most sectors.

In a recent Accenture survey, 68% of respondents found2 automated applications faster to engage than human advisors, and 64% said they communicated more politely. In many cases, consumers are coming to actually prefer computerised interaction.

Organisational efficiency
As many of us are coming to understand, a digitally driven way of working can be more efficient for staff as well as customers. The lockdown period has shown that working from home can be more effective for individuals, without the cost and time sacrifices attached to commuting. If more of us start working from home, office-centricity may also become a thing of the past, which will mean savings and restructuring of property portfolios and more streamlined operations.

Greater agility
The move away from physical infrastructure will equip businesses to be more agile in responding to market needs. For instance, a provider of online entertainment content can easily enter the education space using an e-learning functionality. Compared to the physical space, the complexity of changing from being a movie theatre to an educational institution would be prohibitive.
Similarly, changing to the delivery of video content from written content is not hard in the online space. Flexibility and the ability to shift and adjust in near real time to the tastes and requirements of society and our customers will be a fundamental business need in future.

Expanded reach
As the rollout of mobile broadband expands to reach more people across a broader area, the potential market of a digital business grows exponentially. 4G coverage is growing, in urban and rural areas, and as it does so, people are embracing the wider range of services that are now available – be they online banking, social grant management or ecommerce. As the digital divide closes, the internet is democratising. A recent GSMA report3 noted that 3.5 billion people globally are now connected to the mobile internet, and an additional 300 million new mobile internet subscribers were added in 2018 alone. No business can afford to ignore this booming market.

The power of information
Data is becoming the most precious commodity in business. Being able to understand your operation, your customers and your environment is key to making the right business decisions. Today, thanks to the Fourth Industrial Revolution and the rise of the Internet of Things, data is constantly being generated by people and infrastructure in every industry.

Operating in the digital realm enables your business to access this information through 4G and the imminent 5G functionality that drives high-speed mass connectivity. Digitally enabled decision-making is now essential to keeping a business operating optimally.

Digital transformation is crucial to future business planning. It is not an easy process to go through, but once it has been achieved, the benefits will continue after the challenges are long forgotten.

NBEdison Xie is Director of Media affairs at Huawei Southern Africa Region

– CAJ News

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