As digital technologies transform the way the world interacts, companies will need new business models to keep up with customer demands.
This is the word from Marius Ungerer, associate professor, and Dr John Morrison, senior research consultant of the University of Stellenbosch Business School, who participated in a collaborative research project with the University of the Western Cape and Ikamva National e-Sills Institute (iNesi).
The research team presented their paper Strategies, Practices and Skills for Competitiveness in the Digital Economy at a conference held on 4 August at the University of the Western Cape.
With 70% of companies rating the digital maturity level of their companies as medium to low, the researchers argue that the speed at which companies are adopting digital strategies does not match the pace at which new strategic opportunities within the digital economy need to be harvested.
The team indicated that the most significant challenges identified in entering and participating in the digital economy were the lack in organizational agility followed by the availability of Information Communications Technology (ICT) skills and the mastery of e-leadership skills by senior management.
“Senior management and the Board play a crucial role in contributing in the development of strategic digital business initiatives to increase their competitiveness yet 75% of companies reported reactive guidance or non-involvement.”
As part of the research 82 companies were interviewed of which 51 were listed companies (including five internationally) and 11 from the top 500 best-managed companies of South Africa. The research sought insight into the progress companies are making in deploying digital skills and strategic actions right across the organisation to respond to an economy that become more and more digitally infused.
“Building the talent within your organization to meet the demand of the digital economy is crucial if companies want to stay ahead. Yet our study found that very few include a digital component as a high priority in their people processes,” says the team.
“The result is a reflection of the mind-set that digital capabilities are predominantly the domain of the ICT practitioner or those working within the ICT department. The digital economy, on the contrary, requires all business leaders and staff to become astute in using digital technology and devices to grow the business.
“Currently, the integration of critical e-skills (the ability to use digital tools and facilities which include the internet, electronic invoicing, internet banking and social media) amongst people across the company, and recognising their potential, is an untapped resource.
“A wider basis of digitally skilled people can make a significant difference towards the necessary focus on enhancing efficiencies and productivity as well as on pro-active strategic actions to sustain a company’s competitiveness.”
The study shows that most companies employ internal development initiatives to build digital skills. However, 60% of the respondents also make use of head-hunting at the risk that such talent is seen as one that can be imported, ignoring the importance of building such skills to be aligned with the company’s own strategy and context.
Partnerships within industries and between industries and educational institutions to ensure a growing pipeline of digitally-skilled talent seem to be a low priority still.
“Encouraging such collaboration presents an important opportunity for role players seeking a vibrant South African economy.”
