“Digitization is rewriting the rules of competition, with incumbent companies most at risk of being left behind” according to Mckinsey.
“In Ghana, we say itsDigi-time. The President insists he wants Ghana to become the most business-friendly and the most people friendly economy on the continent and obviously everything like this is going to run on solid technology. So when you talk about the theme I think it’s in sync and in line with what Ghana believes in. All our services, you talking about the Health sector, Agriculture, Security, Housing, Transportation, Education, the backbone that all these services are going to run is technology - Smart digital transformation,” according to George Andah.
The Deputy Communications Minister expressed that “we looking at the National id system, we looking at Housing address system, we looking at paperless offices and E-government services and it's interesting that at the ports just one-week after we introduced the paperless transactions, our revenue went up 56% year on year, so it's just cutting down waste and taking away the opportunity for people to be ‘corrupt” and “very soon Accra, should become a smart city. It is not negotiable and we are ready for that opportunity as well”.
From the above statement, businesses must embrace the digital world to compete or be left behind in Ghana’s economy. Simon Freakley stated the following just as the industrial revolution changed the world and brought about substantial increases in production, recent advances in technology have altered the way business is conducted and redefined how companies operate.
Vijay Gurbaxani points out that thinking like a software company starts with basic strategy questions:
• What do you do uniquely well and what do you know how to do that your competitors do not?
• What barriers do customers face in realizing value from your current offerings?
• Will your value proposition continue to be compelling in the future?
• What role could software play in that equation?
Freakleycontinue by saying that properly used, digital technology has radically improved performance at many businesses. When ignored or treated as an afterthought, the reverse is true and the longer this continues the greater the likelihood of business failure.
The speed of these technological advancements – and their subsequent disruptive effects – is creating a growing divide both in society and business. At a personal level as the father of two young children who think every screen is a touch-screen, I’m acutely aware of the differences between growing up in a digital world as opposed to an analogue one.
This gap is now increasingly driving activity in the employment market. There are numerous pieces of research offering clear contrasts between individuals educated and versed in the latest technological skills and those who lack them, with the latter increasingly facing the prospect of their livelihoods being replaced by technology.
The same thing is happening at a corporate level. Companies properly embracing digital technology by replacing and augmenting business processes to drive competitive advantage are winning. Those trying to win through a steadfast reliance on traditional business methods are losing. More importantly, the longer they leave it the harder it becomes to remain relevant – take for example the decline of Nokia as a consumer electronics brand, a business which at one stage was a virtual synonym for the mobile connected device.
Charting progress toward digital transformation is relatively straightforward. A recent study by the Massachusetts Institute of Technology’s Center for Digital Business contends that there are two key factors which together drive the process: an investment in technology and an investment in leadership.
The study divides companies into four quadrants, reflecting the success of their levels of digital transformation. Companies that successfully embraced digital transformation invested well in both technology-enabled initiatives and the leadership capabilities required. In return they grew revenues by 9pc and are, on average, 26pc more profitable than their industry competitors.
Companies that invested well in technology-enabled initiatives, but not in leadership capabilities that fully embrace these changes, saw revenues increase, albeit not to the same levels, but profits fell.
Companies that established the leadership capabilities required but failed to make adequate technology investments improved profits, but had double-digit declines in revenue.
Companies that did neither are being left behind. Be in no doubt that the gap will continue to widen.
We have seen similar outcomes in our own work with companies. Overall, when managed correctly, information technology spending can generate strong returns for a business and result in a significant competitive advantage.
Of course, it is relatively easy to see why certain sectors lend themselves more obviously to digital transformation than others – retail, financial services, information provision are three obvious examples – but even in these now heavily digitalised areas, we have seen high-profile examples of poor, slow and overly tentative adoption. Ultimately these have directly impacted business performance and shareholder value.
Such is the pace and impact of technological change business leaders must see beyond historical frustrations and pre-conceived ideas and instead embrace technology to compete.
Digital transformation is a challenge and hence an opportunity for every business regardless of sector, geography or market. It’s also a process which building on the key sources of financial performance such as sales, profitability, cash and risk needs to encompass the organization as a whole.
The digitally driven advances of the last several decades not only define businesses but they have also redefined the scope of corporate leadership. The difference between the leaders of yesterday and of tomorrow is almost binary. Yesterday’s management teams discussed results generated after the end of the month. A CEO at the head of today’s most digitally transformed companies operates with real-time information and instant global communications, understands what is happening as it occurs, and acts accordingly.
This transition is not easy, and current business leaders approach it with varying degrees of speed and success. The one certainty is that those who have not already done so are in grave danger of being left behind.
Digital transformation has to be considered a part of every business’s strategy. Your survival may well depend upon it as a concluding statement from Freakley.
Here are five common economic effects of digital thinking:
1. Direct job creation
2. Contribution to GDP growth
3. Emergence of new services and industries
4. Workforce transformation
5. Business innovation
Ultimately, these new ways of thinking about and measuring economic growth point to the need for new ways to discern whether companies are successfully navigating the technology economy. Executives will also need to create, measure, and track virtual macroeconomic measures—and do that just as carefully as they work with metrics about Ghana. And they must adapt to changes in these indicators in near-real time. But to truly succeed, senior leaders must understand where they stand in relation to competitors—and act on that knowledge.
Where will be some companies within the next five to ten years ahead of us in Ghana, are we going to have some companies go into a coma like Nokia is doing today? Digital transformation has to be considered a part of every business’s strategy in Ghana. Your survival may well depend upon it as an individual or corporate level, the power is yours.