Magazine Button
The impact of digital transformation on economic growth in Africa

The impact of digital transformation on economic growth in Africa

AnalysisEditor's ChoiceIndustry ExpertInsightsTop Stories

As African organisations undergo digital transformation, understanding this massive shift and how to harness it will be vital for organisations across the continent, according to Mandla Mbonambi, founding CEO of Africonology.

Access to information, new ways of doing things and consumer consumption patterns will continue to force African organisation to digitise their products and service to provide more flexibility to their customers.

“African organisations can help shape their local economies through digital transformation by adopting megatrend technologies such as cloud computing, mobility, big data, artificial intelligence (AI), the Internet of Things (IoT), robotics and social platforms,” said Mbonambi.

“That said, they must ensure that these technologies fit into their organisations structures, processes, activities and, more importantly, support their business models.

“For digital transformation to yield the desired result of shaping local economies, companies will have to follow a step-by-step approach that includes organisational change management and a shift in both mindset and culture. Creating the right skills set will also be crucial to success.”

Mbonambi believes that digital transformation has the potential of enabling economic growth, job creating and improving the social welfare of the society in which the organisations operates.

“As much as digital transformation brings about uncertainty, it can drive positive development and growth on the continent,” he said.

“The early adopters of digital transformation are without fail poised to be the next leaders and many of these fall within the youth of Africa.

“Disruptive technologies, because of digital transformation, have the potential to meet Africa’s development needs, enabling the different countries to be among some of the fastest-growing economies. This is where the protection of intellectual property, ICT related innovation and start-up activities is paramount.”

Digital transformation is impacting people’s everyday life and has the power to transform communities and even whole economies in Africa.

“Access to mobile phones, especially smartphones, is growing exponentially,” added Mbonambi.

“This has made information more accessible to people and has changed their lifestyles considerably. This is evident in the growth of online stores, the rise of online transactions through banking apps, access to transport and accommodation and the use of social media to reach customers directly.

“Digital currency, such as mobile money, is also a key consideration on the African continent and FinTech’s are disrupting the way traditional banks operate.”

He says the change in effective business models because of digital transformation is creating new rules of engagement, that more traditional organisations must take heed of.

“Business models and the way organisations engage with customers must change dramatically,” said Mbonambi.

“Internally, the way organisations communicate must change, allowing for far greater efficiencies. Companies need to embrace agile methodologies and practices across the organisation, not just in project delivery. DevOps, for example, is one way we have, for example, enabled continuous improvement within our organisation and methodologies.”

Mbonambi says the key to success will lie in understanding what is required to transform your organisation digitally, as it cannot be a ‘one size fits all’ approach. Companies must also not expect to have all the answers all the time.

“Each organisation’s needs are unique, therefore it is crucial that transforming digitally is a tool to scale your business, but that it must be underpinned by a solid strategy.

“You must also find meaningful synergies with other businesses with complementary services as this will drive your growth even further.”

Your employees are just as critical to your digital transformation process

Mbonambi says the subject of digital transformation is not new and is typically related to upcoming megatrends, such as cloud as cloud computing, mobility, Big Data, artificial intelligence (AI), the Internet of Things (IoT), robotics and social platforms.

“Organisations must adapt to a new, innovative way of delivering on their brand promise, ensuring effective customer engagement, bringing in fresh and creative ways of thinking and empowering the company to make well-informed decisions as a collective,” said Mbonambi.

“Digital transformation is not an option anymore. Globally, and on the African continent, organisations must embrace digital transformation as a key enabler of innovation and to drive continuous improvements that will ultimately translate into business growth.”

Mbonambi says it is particularly important to African organisations, because it enables entry into new markets, access to new client bases and more innovative ways of provisioning products and services that are in line with market demands.

“Moreover, African organisations need digital transformation to drive profitability, customer satisfaction and increased speed to market along with borderless entry into new markets within the Africa diaspora and beyond. That said, for digital transformation to be effective and yield results, there must be a clear organisational vision.”

For African organisations to become more competitive in a global context, they need to first redefine their strategies and business models to make sense in the current business context and markets they operate in.

“Their next step is to then identify the right technology fit for their strategy in relation to the products and services they offer and leverage that technology to enable them to be more innovative and flexible in their offering and the way in which they deliver that offering through different digital channels,” said Mbonambi.

“The key to successful digital transformation also lies in moving away from focusing on standalone technology and adopting solutions that will allow organisations to empower their people and support them in making more effective, better informed and faster decisions.

“We cannot change the volumes of data we are exposed to, but we can improve the ability of our employees to leverage that data and translate it into information quickly and accurately to support decision-making. While the decision to digitally transform usually lies within the top levels of management of the organisation, it is crucial to involve your employees throughout the process.

“This requires a change in mindset, training, ensuring they buy into the redefined business model and an in-depth change management programme as the culture of the organisation will also be impacted.”

The risks of not transforming and ensuring that you do it properly cannot be over-emphasised.

“If organisations delay digital transformation, or do not transform at all, they risk being ousted by competitors, which will result in a loss of market share, revenue and could even lead to shut down,” said Mbonambi.

“In this fast-paced environment where continuous improvement and innovation is required to stay ahead of the game, organisations simply cannot risk this.

“We have already seen several organisations in the recent past filing for bankruptcy, because they are not transforming fast enough, or at all.”

He adds that it is not about scare tactics, but rather emphasising the need to transform in a strategic and prioritised way.

“We know that organisations that do not transform risk being left behind or forced to shut their doors,” said Mbonambi.

“The key here is to ensure that the entire organisation is on board with the transformation process so that the organisation can unlock the full potential of their products and services, while embracing the opportunity of attracting new customer bases as they evolve.”

Browse our latest issue

Magazine Cover

View Magazine Archive