Gauteng Business News

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INFOTECH: Digital Transformation: Threat or Opportunity?


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The accelerating pace of digital transformation is forcing us to question who we are and what we do – as individuals, as companies, and as a country writes Mpumi Nhlapo.

This revolutionary shift towards digital business, operating within highly-networked digital economies, is blurring the lines between industry verticals and geographies. It’s changing the rules of the game at unprecedented speed.

For organisations in South Africa and across the African continent, there’s never been a greater opportunity to level the playing fields with first-world economies – and produce radically disruptive innovations in the manner of Uber, AirBNB or Netflix.

To those that question whether we can play on these global stages, just look at the way prepaid mobile services – like airtime, data and electricity – were pioneered in Africa. Or the way that we showed the world what is possible with mobile payments and mobile banking.

There are many examples we could call on, all of which beg the big question: With technology at the heart of our thinking, what could be the next disruptive idea that spreads across the globe and improves the lives of billions?

History repeats itself
However, on the flip side of the coin, digital disruption presents many threats. As more and more services are digitised, virtualised, or delivered ‘as-a-service’, local companies are now exposed to new threats of global competition.

Competing in this landscape means leveraging our strengths. It means taking the best technology and fusing it with an intimate understanding of local customers’ needs, finding the innovative and sometimes peculiar solutions to our uniquely-African problems….and, hopefully then taking these ideas and sharing them with the world.

With data quickly becoming the new currency of the digital era, another looming threat is the way in which our local data is being gathered up, and used by international companies. From large enterprise cloud offerings, to everyday consumer apps, our data is literally being sucked out of the country, and sold back to us in new forms.

At an enterprise level, global cloud providers are currently dominating due to their economies of scale, mature technology, and brand presence. It could be argued that we’re effectively outsourcing many of our technology jobs to these global corporations.

It’s a scenario eerily similar to the way our natural resources were exploited in the industrial era. This time, instead of mineral wealth being beneficiated elsewhere, it is now our data that is beneficiated and sold back to us, in new forms… a Facebook update here, an Uber ride there, or an enterprise cloud service, for instance.

Countering this trend will be absolutely critical for Africa to succeed in the digital era. We need to ask ourselves whether we’re creating platforms for people to build apps, create new digital services, and drive new economies?

Are we positioning ourselves as creators, and not just consumers, of technology?

New digital economy, new contracts
This digital transformation not only disrupts business and the way clients interact and engage with companies, it also calls for a new type of contractual model that is geared for a new economy. An important component of supporting new and alternatively technology, such as XaaS, is a relook at older, fixed outsource contracts that can be onerous and tie customers into long-term agreements.

Outsourcers need to reinvent their contractual models by replacing multi-year contracts that keep clients locked-in with flexible and empowering ones that can be terminated in the event of a major outage or if the customer is not happy with the service levels provided. The contracts also need to boldly shoulder a lot more risk and significantly reduce IT operating costs, guaranting the delivery of true business value and helping ensure companies are on the winning of the digital revolution.

We’re at a critical juncture. Now is the time for us to either step up and compete on the global stage, or sit back and wait for others to lead the way.

For local organisations, turning digital threat into opportunity will mean collaborating with a technology partner that not only has top-drawer skills and expertise, but also the passion to see Africa succeed in the digital era.

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