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By Rudi Briedenhann

Last week I ended with a sort of beginning. That will be the beginning of a step-by-step guide that must be taken to truly adopt the 4th industrial revolution. I used an example that perfectly demonstrates the misguided understanding of the 4th industrial revolution and what it means for business. This severe detachment of understanding is also at the very foundation of SmartPalm’s existence. SmartPalm is the quintessential 4th industrial revolution business. It was born as result of the 4th industrial revolution and to that extent is very much a millennial business. It is our aim to play a significant role in the large-scale digitisation and automation of business in South Africa, Africa and the rest of the world.

 

In order to guide businesses on where to start on the digital transformation journey, I provide this guide. It may not be the definitive guide to digital transformation but could at least establish thought considerations when creating your business’s digital transformation roadmap. In my opinion, there are 5 key factors which must all align before any digital transformation journey should be attempted. I shall cover each of these 5 key factors during the next 5 blogs.

Decades of experience in the South African business space proved that any type of organisational change is only successful when driven by effective leadership. Leadership is responsible for the direction the business will take for the future and provides action plan for steps that must be taken in order to meet the short-term transformation targets set for the business.

A fundamental alignment must exist in transformational thinking, the transformation plan, targets and priorities within the C-suite that must be driven by leadership. Without unilateral leadership support, chances are that any attempts made by the organisation are bound to fail. This may not be a difficult thing within a “millennial business’’ (businesses registered after 2000), as the leadership in these organisations tends to be younger and more accepting of technology integration and view this as a major quantifiable component of operational cost reduction. These statistics are well known, but for the sake of completeness, early adopters of digital transformation reported 46% improvement in customer advocacy, loyalty and retention, 41% improvement in internal productivity, 45% improvement in operational cost reduction, 45% improvement in profit margin and 39% increased revenues from new products and services.

‘’Knowledge and skill’’ are the next factors. I have seen the adage play out so many times within corporate ‘’he/she knows just enough to make them dangerous’’ and the C-suite being duped into opting into supplier’s ‘’coupled’’ technology offerings at ‘’prices too good too be true’’.  Again, the old wisdom that says ‘’if its sounds too good to be true, it probably is” normally applies. This only happens as the required considerations of the technology component coupled with the organisation’s corporate governance and compliance requirements are not applied by leadership at the correct point and unfortunately, it’s too late when they realise that the supplier technology is not aligned with the organisation in practice. The organisation may now be tied-into a long-term contract with the supplier and therefore subject to the contract expiring before the they can move forward with their own agenda. It is crucial that organisations understand that technologies are very seldom a one size fits all solution and that any ‘’supplier’’ that offers a client a custom mobile application for R10 000.00 will only provide a generic front-end and devalue your brand by pre-fixing and coupling their brand with yours.  Furthermore, it will not provide the required functionality, digitisation and automation of your specific processes and therefore the organisation is not benefitting from the results of digital transformation and become hesitant to engage any future digital services as ‘’we have tried an app and it didn’t work’’ is normally the thinking here. This is where we find a large gap in skills and knowledge within corporate management.  Technologies are being punted to clients masked as the organisation’s own application, known as white-labelling. The damage that this causes to the organisation’s own ability to adopt more suitable technologies and stunting growth is unmeasurable. Imagine your organisation has a perfect solution to automate and digitise a new product service, that will save significant opex costs, however the generic white-labelled application does not allow any custom functions to be created or added to the platform. Your organisation is now forced to observe the same archaic and expensive paper-based processes as before. I am sure that one can see how this only leaves you at a severe trade progress disadvantage. Your business is in effect at the mercy of the generic technology it opted for without due care and consideration as to what this position could mean until the supplier contract period expires. We often see that clients are frustrated with inferior generic platforms provided to them through a supplier service, but they are unable to move forward with actual internal value-adding technologies because of contractual periods. In many instances we find that organisations have had such a negative experience with ineffective technologies that they become technology averse.

A practical example of this is that the Compliance department can only use the tools made available to them by the organisation to control and manage the vast compliance requirement placed on the organisation. This function is necessary but also places a very large cost burden on the organisation’s opex because it is out-dated, paper heavy, expensive, slow, tedious and trade restrictive. Corporate governance, however, dictates that all compliance requirements must be observed before certain types of transactions can be completed. The requirement states that each transaction document must be completed by all parties and controlled according to the corporate governance standard. Let’s assume that the Compliance Manager recognises the need and benefit of digitizing the process as it will reduce process time from 48 hours to 6 hours, process cost by 43% and will create capacity to process 60% more transactions. What success will the Compliance Manager have in putting a case forward for the organisation to invest in an internal mobile application to digitize the process when leadership is now technology averse?

The truth of the matter is there is no one size fits all technology solution out there and if you thought that there is a generic or white-labelled solution for you to quickly get an app, be warned. There are no short-cuts within digital transformation Mr. CEO! It is a fundamental change in the operational processes and standards of the business. It is answering the question ‘’which current technologies are most appropriate for my business to ensure that we can fully maximise efficiencies across processes?”. No generic or white-labelled solution is going to provide your business with that answer.

There we have this week’s addition to the series. In summary, the following advice ensures that there is buy-in, support and direction from leadership before embarking on a digital transformation journey, without it, the journey will not get off the ground. Secondly, ensure that you engage the correct partner for your digital transformation journey. Just as you wouldn’t get a brick layer to build your car, ensure that the organisation partners with the most suitable and knowledgeable company for it to successfully embark on the digital transformation journey.

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