South African companies need to adopt a digital first mind-set


While business expectations of digital investment are higher than ever, few companies are able to translate their investments into enhanced financial performance and new business growth.

This is according to Accenture’s Digital High Performance research, an analysis of more than 1 200 companies, which reveals that only a few companies worldwide are able to leverage their investments in digital capabilities to substantially improve their performance.

Joost de Haas Accenture Strategy Managing Director says there is immense pressure on businesses to remain ahead of the digital curve.

“Companies in South Africa and around the globe need to adapt and apply digital capabilities to increase gains from their current business and create the investment capacity necessary to build sustainable futures.”

Despite the fact that 78% of companies in South Africa understand the need to digitally innovate, with many of the larger companies expecting to generate 29% of total revenue from digital technologies, products and services in the next three years, only 5% are excelling in applying digital technologies and capabilities,” says de Haas.

Notably, only six percent of companies analysed globally can be classified as Digital High Performers—that are truly reaping the benefits of their investments in digital. The percentage of Digital High Performers drops to a mere three percent closer to home, with more than 70 percent of South African companies lagging behind in their level of digitalisation as well as their ability to realise superior financial returns on their digital investments. Globally, this is only marginally better at 60 perc

De Haas says South African Digital High Performers and Digital Leaders, companies that have prioritised digital but are still awaiting the rewards enjoy, on average, higher revenue growth of 32 percent compared to other companies

“Our findings indicate that another two percent of South African companies fall into the Digital Leaders category and while they may demonstrate leadership in digital capabilities and services, Digital Leaders have yet to realise and unlock the trapped value from these investments. Their inability to do this is often due to the preservation of their existing core business at the expense of truly expanding into digitally contestable markets.”

De Haas says to truly capitalise on digital, companies need to demonstrate a “digital first” mind-set and effectively execute on delivering across all areas of their organisations with a relentless focus on value.

“Investors favour Digital High Performers for their “digital first” approach to all aspects of their businesses, as well as their ability to take action and follow through—a strategy that positions them optimally for future growth and business performance.”

When comparing non-Digital High Performers globally to those in South Africa, local companies’ digital maturity is well below that of their global peers and they underperform in areas such as executing on digital growth strategy, using digital technology to unlock new revenue streams, deploying digital tools to engage and anticipate customer needs and fostering a culture fit for the digital agenda.

De Haas says in South Africa, specifically, there seems to be an even greater case to act fast on the digital agenda.

“When comparing the Digital High Performers versus non-Digital High Performers, a significant ‘digital premium’ is evident. It appears that in the local market, there is an even greater premium for companies that successfully move on the digital agenda while the market is still maturing.”

This is especially notable in the areas of Plan, Make and Sell, where there is a bigger maturity gap compared to what we see globally, indicating that Digital High Performers in South Africa can distinguish themselves even more so in the market through leveraging digital.

The Plan element refers to the ability of companies to effectively plan and execute on their digital strategies. Digital High Performers have a clearly articulated digital strategy versus only 57 percent of the others locally. Over and above, only 39 percent of South African companies are investing comprehensively in digital technologies as part of their overall business strategy.

De Haas says the Make aspect talks to the designing and making digital products and services. “While many South African companies are developing and launching digital services, few are fundamentally changing the way they design and make them. Approaches remain traditional, with a limited number of companies embracing immersive, creative and innovative approaches, such as Design Thinking, to reimagine services or leverage agile and rapid sprint cycles to deliver new services to market faster.

“Digital High Performers, on the other hand, excel in this area with nearly all embracing innovative, customer-led approaches to designing, building and launching new products and services, compared to only 34 percent of local non-Digital High Performers.”

From a Sell perspective, Digital High Performers show a greater mastery of digital marketing, sales and customer service, and deliver superior customer experiences compared to their less digitised counterparts.

Digital has created new possibilities for interacting and engaging with customers, enabling personalisation at scale, but in South Africa very few are taking advantage of these capabilities. For example, only two out of every 10 local companies utilising location-based services to customise offers for their customers. Another area of concern is digital customer service, with less than four out 10 South African companies enabling digital service, feedback or complaints.

The Manage, which refers to building digital culture and operations, is all about embracing “digital on the inside”, actively working towards a digital culture and supporting their people through continuous skills development to better equip them to compete in the digital age.

In South Africa, Digital High Performers are making significant investments in developing their talent for the future versus only 30% companies within the others. In addition, less than a third of companies are leveraging digital tools and services to support and foster innovation and employee development. In comparison, Digital High Performers have invested significantly in new tools and technologies to support productivity and employee effectiveness.

De Haas says shifting the culture and becoming digital on the inside” is one of the most difficult challenges companies face today.

It is, however, imperative as business leaders to focus on developing an organisation that is agile and fit for the future amid the constant threat of disruption.”

Accenture has identified seven no-regret capabilities that companies can start to build immediately to accelerate their digital transformation, irrespective of their maturity or the industries they operate in. They include sensing and interpreting disruption; designing a delightful customer experience; organising for speed; experimenting to develop and launch new ideas faster; fully understanding and leveraging data; building and maintaining a high digital quotient team; and partnering and investing for all non-core activities.

De Haas says South Africa companies need to consciously and deliberately lead in the new by taking steps to renew and transform their core businesses while growing into new businesses and perhaps even new industries.

“In doing this, organisations will secure their future and ensure their ability to compete and achieve superior business outcomes. This will require a higher degree of decisiveness and the courage to act now.”



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