By Tonny Tugee
There’s no way around digital transformation. Businesses and people are moving online, connecting and transacting without giving much thought to where digital might take us or what opportunities it may provide.
But this mindset could be our downfall when, in fact, ensuring a competitive edge and business sustainability depend heavily on a business’ ability to respond to developments in the digital economy.
Just as the name suggests, the digital economy is based on digital computing technologies and is often associated with markets constructed on the internet. And because it all comes down to ones and zeroes, every move a consumer makes can be recorded, saved, and made readily available for insight analysis.
Many have already jumped at the opportunity to reap its benefits, while others struggle to cope with the rapid pace of its evolution. By looking at businesses that have successfully adapted to the digital world, business leaders can gain inspiration and insights into what changes they can make in their own companies going forward.
Exploring Digital Journeys
Many companies worldwide have used digital technologies to provide a unique service by implementing new business models that take advantage of digital developments.
This is because they realised that to grow exponentially, they not only needed to invest in innovation but in harnessing technology too.
A traditional company that has successfully added a digital offering is investment banking giant Goldman Sachs. Realising that consumers spend most of their time online and desire ease of accessibility, they built a digital consumer business solution, called Marcus.
The app grew in popularity and has even attracted the attention of Apple and Amazon. The result has been deposits worth $92 billion funnelled through the app, and satisfied customers who continue to make use of the service.
As well as facilitating cost savings, the digital economy is enabling faster, bolder decision making. For Indonesian mining company Petrosea, this meant addressing diversification away from coal, digitisation, and decarbonisation of its operations by adopting advanced technologies, including artificial intelligence (AI), smart sensors, and machine learning.
This shift to an agile, digital tech model has allowed the company to explore predictive maintenance and an opportunity to develop a suite of AI-enabled digital technologies to help it find metals faster and more efficiently.
Closer to home, Komboa is a start-up that has successfully deployed digital strategies to find smarter and more sustainable ways to operate. The Kenyan company challenges the traditional model of owning a car by allowing users to rent vehicles from ordinary people.
They believe that this peer-to-peer car-rental model is more flexible, gives people who don’t own vehicles access to cars, and puts private vehicles to better use. Users are able to easily log into the app and hire a car of their choice – again, disrupting the car-rental industry as we know it.
How to Succeed in the Digital Economy
Based on these companies’ success stories, we can extract learnings and adapt them to fit other organisational structures.
For starters, business owners need to invest in skills development. None of these digital success stories would have been possible without the right skills.
With many already in uproar regarding job security and digitalisation, skills development becomes not only vital to businesses that are pursuing digitalised operations, but also in terms of the company morale and culture.
One way to address this is to integrate ICT skills development into general business management training curricula. Governments should also consider collaborating with the private sector to provide more training to small businesses on how to leverage digital platforms.
Likewise, businesses need to invest more when it comes to consumer experience. The digital economy has changed customer expectations, with the focus now shifting to prioritise experiences over the actual products or services themselves.
The primary reason for this is that consumer behaviour has evolved with increasing access to technology, specifically the advent of the smartphone and information availability afforded by the Internet. Now consumers want a unique online experience because, let’s face it, they have ample options. It’s this differentiator that can make or break a sale.
What also needs to be considered is the current landscape and whether products or services are still relevant. If not, companies must seek out ways to enhance their offering or be left behind when other businesses inevitably change to meet a market need. This can be, for instance, listing your restaurant on Uber Eats, running virtual gallery events, or changing offerings completely in response to customer behaviour.
What you should be asking yourself now is whether your organisation is ready for the digital economy, and what you can do to prepare. For small businesses, this could mean simple changes like looking at tech, laptops for employees, and a stable network infrastructure with fast, responsive Internet. But for bigger businesses, like Petrosea, it could mean investing in 4IR technologies.
The digital economy continues to evolve, driven by the ability to collect, use, and analyse massive amounts of machine-readable information. To succeed in this economy, businesses must look to those who have succeeded, invest in a range of different skills and tech, explore new behaviours, and drive the change throughout the organisation that will put this transformation into motion. The result? Transformed African businesses and improved economic outcomes for our country.
The Writer is SEACOM’s East and North East Africa Managing Director