Kathy Gibson reports – The future is not what it used to be.
Change is all around us, and organisations need to ensure they digitalise their businesses or they will almost certainly get left behind by unfolding events.
Arthur Goldstuck, MD of World Wide Worx, explains that people’s behaviour has changed in both the work and domestic space.
To understand the change we see around us, we should follow the money, Goldstuck says.
Not surprisingly, Netflix is the big winner in the pandemic, today boasting a market capitalisation almost double what is was in April.
Interestingly, the Walt Disney Company has decreased significantly over the same period, indicative of its reliance on the physical world.
The technologies that companies are leveraging now, that are having an impact on business, are led by Zoom. At a $78-billion valuation, it has grown from $10-billion at the beginning of the year.
Amazon is another pandemic success story, Goldstuck points out. Despite massive costs being added to its bottom line, it has boomed over the five-month period.
Microsoft Teams grew 894% in three months; Zoom grew 677% and WebEx volumes were up 400%.
“We are still seeing a war between the past and the future,” Goldstuck says.
The past he describes as digitisation, with digitalisation being the way of the future.
For instance, a company like DocuSign is growing because it eliminates the friction and complexity of manual process.
South African companies told a WWW survey how advanced they are in digital transformation. About 38% said they are well advanced – and the same number said their staff could continue to work remotely after the pandemic.
“So the digitally transformed companies are also incredibly mobile.”
The companies that are able to embrace digital transformation can do almost anything online, Goldstuck adds,
Doing anything in a digitally transformed company becomes simply a matter of scale.
“It is not only about change – it is about organisations awakening to the potential.”
Some companies are benefiting in a big way.
For instance, Apple’s share price is at an all-time higher and about 50% higher than the beginning of the year. It’s market capitalisation is about to pass the $2-trillion mark.
“Bear in mind that there are two distinct Apple business: one is the hardware business driven by the smartphone; and the other is the Apple AppStore.
“So they have a digital business, and a consumer business that feeds the digital business.”
The big question for companies is what happens next; where will we go after the pandemic.
The Neilsen Framework indicates that consumers will respond to the crisis with a basket reset. “Consumers need to account for everything in their basket, merging old and new.
They will prioritise in-home spending rather than out-of-home purchases. This includes home improvement, home entertainment and learning from home.
Consumers will shift their priorities in how they spend their spare cash, and are now far more risk-averse, looking for products the deliver quality, value and peace of mind.
“In many ways this is what digital transformation allows,” Goldstuck says.
There are many strategies that will underpin the consumer and business response, he adds.
Every industry will have a different experience and will have to adapt and resurface in a different way.
“But they all have one thing in common: they have to have a digital awakening – it is a necessity for the new future.”
He says there are three strategies that companies can leverage: collaboration, capacity and transformation, of processes and mindsets.
Dierdre Fryer, head of solutions engineering: Africa at Syspro, explains that true digital transformation happens when digital processes start to add value to the business.
The digital transformation journey embraces digitisation, then digitalisation and finally digital transformation, which is a co-ordination change effort at scale, diffused through all aspects of the business.
The pandemic has accelerate the journey for many organisations, which have had to quickly become more agile and responsive.
But even before the crisis, we were seeing a “right now culture”, where customers started to expect instant experiences.
“This put a lot of pressure on businesses to do things faster and differently.”
Globalisation is a real thing, she adds, and organisation are more integrated around the world than ever before.
“We are also social butterflies; people love social media. It is an important concept that we have to be mindful of. Our brand and our delivery are out there so there is a demand to always get things right.”
The customer is also a lot more information today, Fryer says. Customers do a lot more research and by the time they make a buying decision they have done the comparisons and got the insights.
The final element is choice, Fryer adds. “Choice has become an important factor. When there is so much choice you have to really up your game to make sure your product is the one chosen.”
These pre-Covid drivers are still behind digital transformation, but the pandemic has accelerated them, wile adding things like security as well.
When embarking on a digital transformation, companies are advised to consider carefully what they want to achieve.
“Why do you want to do things? What is the value it will bring?” Fryer asks. “What is the outcome and what is the purpose – there are the first questions you need to ask.”
She adds that there are different reasons for a digital transformation focus. It could be information transformation to create competitive advantage; or it could be operating model transformation to create new business models or revenue streams.
The most common reason is customer transformation, aimed at improving the customer experience – and this needs to include all the parts of the business that contribute to the customer experience, Fryer warns.