South Africa has been ranked among the top 10 countries leading the digital transformation change required to compete in 21st century economies.
This is according to the Dell Digital Transformation Index conducted in partnership with research firm Vanson Bourne.
The research ranks SA among the top 10 countries that are home to firms leading the digital business maturity level by implementing innovative systems that provide work-anywhere capabilities and turn data into business intelligence, among other initiatives.
The research surveyed 4 600 business leaders from medium to large companies across 42 countries and sub-regions, to gauge their organisations' digital transformation journey by examining their IT strategy and workforce transformation initiatives.
The index found that when ranked by their digital maturity, firms from developing markets were leading the pack, while some developed markets are lagging behind.
Indian businesses head the adoption curve, followed closely by Brazil and Thailand. SA ranks ninth out of 41 countries with a maturity score of 50, not far from India's 58.
The US, the only developed nation in the top 10, is ranked sixth with a score of 52. Australia is ranked 13th, China 16th and the UK 19th. Countries such as Japan, South Korea and Singapore - often seen as technology leaders - sit at the bottom end of the index.
"It's very good to see SA rank so highly, but not that much of a surprise," says Doug Woolley, GM of Dell EMC South Africa.
"Local businesses are careful and even conservative, but they are also interested in efficiency and progress. A few years ago, many were still holding back, but that has been changing fast. They are looking for efficiencies and to become more nimble. I also believe there's a greater sense of urgency and clarity in developing markets such as ours. The market environment has been tough and that's sharpening senses."
Trailblazing technologies such as telematics, artificial intelligence (AI) and robotic process automation were among the innovations that received more investments by organisations from developing nations. The ability to access business systems on a phone or laptop hundreds of kilometres away was also targeted for investment.
SA's state of innovation
Tshilidzi Marwala, vice-chancellor and principal of the University of Johannesburg, explains that while local organisations are succeeding in some areas of digital transformation, they lag behind in other areas.
"The area that we are doing well is in adoption of digital technologies such as AI and big data analytics," he notes.
"The main problem is that we do not have enough people who understand these technologies. There is not enough university-industry collaboration that will collectively tackle problems using these technologies in a way that will give us a comparative advantage. Additionally, there is poor understanding of what these technologies mean: AI and machine learning are poorly understood concepts in SA."
In terms of SA's comparison to global countries, Marwala explains that while South African organisations have an inclination to adopt digital, they face stumbling blocks along the way.
"The main difference is SA's readiness to innovate around the latest technologies. What we are doing is to take these technologies and deploy them, oftentimes out of context, because managers do not understand the outcomes expected from these technologies.
"Globally, for example, companies such as Goldman Sachs have people who specifically look into deployment and return on investment of these technologies. These people often have doctoral qualifications, meaning they are at the cutting-edge of the available knowledge. I do not see this in SA and certainly not on the same scale."
According to research conducted by Forrester in 2018, CIOs globally tried to wrestle with rapidly changing market conditions by being bold and promoting complex, ambitious digital transformation strategies. But many of these efforts failed, stalled, or fell short.
"The lesson for 2019 is clear: think big, but act pragmatically. Smart firms will execute digital with surgical precision to build a strong foundation, and position themselves to come out swinging in 2020 and beyond," says Forrester.
According to research conducted by Accenture, digital technologies can generate more than R5 trillion in value for South African industry and society over the next decade, through the use of technologies in key industry sectors, including agriculture, public infrastructure and administration, financial services and manufacturing.
Dell Digital Transformation Index: Most digitally mature countries:
- South Africa
Least digitally mature countries (from bottom up):
- South Korea
- New Zealand
- Czech Republic