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No business immune to the impact of digitisation

No business immune to the impact of digitisation

Photo by Bloomberg

9th June 2015

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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Digitally ready or not, it is time for companies to evolve to remain relevant to their customers as digitisation moves out of a technology realm and into a business imperative.

A three-city panel debate spearheaded by Telkom Business saw participants unpack the inevitability of “digital” – driven by the rise of mobility, cloud computing and big data – becoming the epicentre of a business strategy.

“The world is changing and no business will be immune to the impact of digitisation,” Telkom Group COO Dr Brian Armstrong said on Tuesday, pointing out that matching customer needs with digital strategies was fast becoming one of the biggest challenges facing companies.

Discussions around whether companies should develop a “digital strategy” or a “corporate strategy” in a digital age continued, particularly as the definition of digitisation remained narrow, with the focus still on the technology.

“Digitisation means different things to different groups of executives and people. Digitisation is not primarily about technology, it is firstly a social and business phenomenon, which is underpinned by technology,” he said.

“Today’s major technology trends – cloud computing, unified communications, big data, mobility, machine-to-machine, the Internet of Things and social and digital media – are becoming pervasive,” added Ovum enterprise senior analyst Richard Hurst.

There was a need for business to “weave” the current trends into business practices and strategies to gain a competitive business advantage, which, in turn, would provide operational efficiency – doing something better – and “difference” positioning – doing things differently or doing different things – leading to the first-mover advantage of predicting, influencing and responding to industry needs.

Frost & Sullivan growth implementation solutions director Alistair Petersen said: “Digital is not something that is coming. It is already here – if you do not embrace it you will be controlled by it [or become irrelevant].”

A Telkom White Paper had found that 32.5% of companies in Africa did not have a digital strategy – higher than the global average of 22%.

Further, the report, titled ‘The impact of digitisation on businesses in South Africa’ highlighted the birth, by 2020, of a new generation – Generation Connected – which, like the current “digital natives”, would experience computers, the Internet, mobile phones, texting and social networking as a lifestyle, with the reliance on technology placing pressure on companies to implement ever-expanding digital models.

The paper pointed out that from 1990 to 2010, the number of personal computers worldwide grew from around 100-million to 1.4-billion.

Two decades ago, there were ten-million mobile phone users and three-million Internet users, which, over the 20-year period, increased to five-billion and two-billion respectively.

By mid-2012, there were 167.3-million Internet users in Africa and 8.5-million in South Africa.

Further, there were several forecasts of 50-billion connected and 200-billion intelligent devices by the end of this year, with expectations that, by 2020, around 275 exabytes a day of data would be sent across the Internet and data volumes would experience a 50-fold increase.

“Companies will have to redesign their organisations, partnerships and operations,” said Accenture digital and technology strategy MD Lee Naik.

Petersen explained that different industries would see a digitisation shift in different ways and at different paces, but it would occur.

However, while digitisation was generally accepted to provide a competitive advantage, it failed to attract the required investments from companies.

“The risk of doing nothing can far outweigh the risk of doing something,” Armstrong warned, citing the demise of Kodak and the lost ground experienced by Nokia and Blackberry.

“The environment is digitising, with or without us.”

“The past decade is already littered with businesses that have fallen by the wayside, victim to the change that the digital age has created,” added Africa Analysis analyst Andre Wills.

While the “digital chaos” presented new opportunities such as the creation of new products to service digital products and new participants in the broader value chain and an abundance of new digital channels to reach customers, it had resulted in a value chain disruption and the shortening of product life cycles, in addition to new digital competitors amid the collapsing of market access barriers.

“The question that needs to be answered is how do we remain relevant to our customers so that our business remains sustainable in a faster changing world?” he concluded.

Edited by Creamer Media Reporter

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