Digital transformation is having its big moment globally as well as in South Africa, as the business world scrambles to keep the wheels of industry turning in an era of social distancing and remote working.
According to a new research survey by World Wide Worx in partnership with Cisco, on remote working in South Africa, every large enterprise in South Africa regards digital transformation (DX) as an important strategy to deal with the COVID-19 crisis. Yet, only about a third say they had fully rolled out DX prior to the pandemic. At the same time, more than half say that their DX strategy had a major impact on their transition to remote working.
A survey by International Data Corporation (IDC) across Sub-Saharan Africa supports these findings: 57% of organisations in the region are accelerating existing DX efforts. And the reason is simple, says Mark Walker, IDC associate vice president of vertical industries for Middle East and Africa.
“Digitally transformed enterprises are doing exceptionally well during these tough times,” he recently told a joint Oracle-IDC webinar titled Digital Transformation is No Longer Just an Option.
“In our forecast for 2018, we looked at about 17% of all enterprises being digitally transformed, and by 2023 about 52%. Now a lot of CIOs say that they've accelerated their digital transformation programs significantly. The catchphrase is: ‘we feel like we are living in 2025. Everything we had planned for 2024 or 2025 is happening now’.”
It is obvious to all that a spike in demand for online business channels, accelerated expansion of public cloud services and enhanced mobile data infrastructure is driving this rush to digital. Walker points to specific strategies and use cases, such as moving to opex-based services with increased adoption of hosted, managed, and software-defined services, adopting enterprise connectivity through 4G services to leverage mobility, and supporting remote workforce management and collaboration needs.
However, two big questions arise, and these are critical to successful transition.
The first is how to align business strategy with DX readiness. Walker recommends a region-specific DX strategy that targets business challenges and addresses strategic objectives, pointing out that CIOs in some regions have prioritised customer retention, while in others the focus has been more strongly on operational efficiency.
Alignment between lines of business and the IT department is critical in any of these strategies, he says, yet few companies have close integration in this regard.
“CFOs and chief operating officers and HR officers are becoming more involved, which is critical to successful digital transformation, but at the moment the IT department is still very much calling the shots: only 12% of the respondents say that IT and others collaborate closely to jointly develop the roadmap for the line of business.
“In light of the COVID-19 impact, these triggers are going to change dramatically over the next two to three months as businesses realise the importance of e-commerce, of having cloud platforms and readily available data based on predictive analytics or machine learning, to drive better executive decisions, and for deployment of operational resources in a more efficient and effective manner.
“In six months time, I would expect, the roles are pretty much going to be reversed. The line of business is going to become important from an IT perspective as well as from a line of business perspective.”
Oracle’s research in progress bears out this insight. Ronnie Toerien, HCM sales development and strategy leader for Oracle Africa, says that one the company’s polls revealed three emerging trends.
“The first area is the customers who had already started their digital transformation process prior to the COVID-19 situation. They are continuing the projects across the region, and this cuts across industry segments and geographies. Our system integrators and consulting firms are saying that almost all the projects are going ahead full-swing.
“The second area is customers who are currently starting the digital transformation process. They're coming up with very specific areas of focus that they need to handle the current situation. For example, from a chief financial officer’s perspective, cash flow management and scenario planning to mitigate this crisis has become a top priority.
“The third area is customers who have not yet started this transformation journey. They're starting to talk to us on specific areas where they see an immediate need for some sort of digital solution to help him through this particular process.”
Overall, however, Toerien notes a sense of urgency in all three of these categories around accelerated engagements and discussions on how the company’s solutions can help them.
The World Wide Worx study shows that the majority of companies fall into the middle category. More than half have started the DX process, but are not yet advanced. Toerien says one can pinpoint such companies’ pain points quite specifically.
“For example, from a chief financial officer’s perspective, cash flow management and scenario planning to mitigate this crisis has become a top priority. Unfortunately, CFOs lack historical data that they would normally look at in a crisis like this, and that would help forecast how things might look like when we come out on the other side. From a chief marketing officer’s perspective, a lot of CMOs need to address the right campaigns to cater specifically for their customer needs.”
The second big question that arises from accelerated DX roll-out is that of data security. According to Walker, the marriage between cloud, mobility, social and big data analytics, which has been driven very strongly over the last three to four years, has resulted in a range of industry disruptors across augmented reality, robotics, cognitive AI, and the Internet of Things. Along with these glamorous-sounding categories, he adds the “dull relation”, and one that probably carries the greatest burden of responsibility: next-generation security.
The recently released Oracle and KPMG Cloud Threat Report 2020, a study of 750 cybersecurity and IT professionals across the globe, found that a patchwork approach to data security, misconfigured services and confusion around new cloud security models has created a crisis of confidence.
So, while organisations are moving more business-critical workloads to the cloud than ever before, growing cloud consumption has created new blind spots as responsibilities in securing data are negotiated and understood. This confusion, finds the report, has left IT security teams scrambling to address a growing threat landscape.
For example, no less than three quarters of these professionals viewed the public cloud as more secure than their own data centres – yet more than nine out of 10 did not believe their organisations were well prepared to secure public cloud services.
This encapsulates the mixed blessing of DX in a time of crisis.
Tony Buffomante, global co-leader and U.S. leader of KPMG’s Cyber Security Services, sums it up perfectly: “In response to the current challenging environment, companies have accelerated the movement of workloads, and associated sensitive data, to the cloud to support a new way of working, and to help optimise cost models. This is exposing existing vulnerabilities and creating new risks.”
Digital transformation’s big moment, then, is also a moment of tremendous risk to organisations embracing it. Addressing that risk is complex, but obvious, says Buffomante. And it is not only about technology.
“To be able to manage that increased threat level in this new reality,” he says, “it is essential that CISOs build security into the design of cloud migration and implementation strategies, staying in regular communication with the business.”
Authored by Arthur Goldstuck. Arthur is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee