Digital IQ for African companies

Most organisations around the world have not done enough to keep up with the digital era – and leadership is falling short, with many chief executives not yet fully engaged in the initiatives of digital transformation. African companies match their global peers in many measures of Digital IQ: just over half (52%) rate their organisation’s Digital IQ as strong – a score of 70% or greater. However, South African companies stand at risk, with less than half (47%) rating their organisation’s IQ over 70%.

These are some of the highlights from the 10th edition of PwC’s Global Digital IQ survey, with a focus on Africa. “Digital IQ has a different meaning today than it had when PwC started this research a decade ago. Tielman Botha, Digital Lead for PwC South Africa, says: “Today, the scope and scale of digital-driven change has grown significantly, and organisations have invested a lot of time and money to keep up.

“Despite notable advances in technology, company leaders are no better equipped to handle the changes coming their way than they were in 2007, according to the survey results.”

In fact, Digital IQ – the measurement of an organisation’s ability to harness and profit from technology has actually declined since we began asking executives to self-assess their own organisations, comments Botha. As this year’s survey shows, many companies are grappling with raising their Digital IQ. There is awareness that digital capabilities are a critical component to success, and that emerging technologies have to be explored. But leaders remain challenged by the need to transform their organisations to truly integrate digital into the company’s culture.

Digital IQ, leadership, and goals

C-suite engagement in digital investment has grown in the past decade, but a large portion of chief executives are still behind when it comes to being the change agents. In 2007, one-third of companies said their CEO was a champion for digital, but that number remains surprisingly low when CEOs are responsible for staving off disruptors and driving transformation – even in 2017 only 68% of respondents (Africa: 65%; South Africa: 50%) stated their CEO championed digital. On top of that, many respondents said other senior executives remain disengaged from digital transformations. “CEO and CIO support is critical to developing successful digital initiatives, along with attention to human factors,” Botha adds.

The survey, now in its 10th year of identifying trends in technology and business adoption, examines just how organisations maximise returns on their digital technology investments, or not.

Over the past decade, PwC has used this survey to ask corporate leaders a critical question – how are organisations maximising and profiting from their digital investments? Companies are faced with an ever-growing list of options for technology investment, but whether or not those investments are being put to good use remains an omnipresent problem – that has not been alleviated in the last decade.

This year’s survey results, gathered from the perspectives of 2,216 business and technology executives, provides insight into the challenges corporate leaders continue to face.

Business-model innovation and technology platform integration are considered the top digital initiatives for African organisations over the next three years: South African companies are more likely to cite technology platform integration (50%, vs. 40% of others in Africa).

Emerging technology: next generation digital

A decade ago, technologies like social media, mobile, cloud and analytics were still entering into the mainstream. Today a new wave of technologies, including what are known as the essential eight, is emerging: the Internet of Things (IOT) and artificial intelligence (AI), the foundational elements for the next generation of digital; robotics, drones and 3D printing, machines that extend the realm of computing power into the material world; augmented reality (AR) and virtual reality (VR), which merge physical and digital realms; and block chain, a new approach to the basic bookkeeping behind commercial transactions.

However, most companies are not better prepared in 2017 to adopt emerging technologies than they were a decade ago. African executives are focused on digital innovation, but may not have the processes in place to execute on strategy: 87% say identifying opportunities to digitise their enterprise is a critical part of their innovation process (vs. 79% of others), but only 63% take a systematic approach to evaluating emerging technology (vs. 76% of others).

Similar to organisations in other parts of the world, investments in Africa are focused on the IoT and AI (69% and 42% are investing heavily today, respectively), and are expected to continue over the next three years (63% and 60%). African firms are more focused than their global peers on virtual reality, with 21% investing significantly compared to 7% of others.

African executives tend to take a different approach to exploring emerging technologies than their peers, including collaboration with other companies. They are also more likely to network with other industry leaders (54% vs. 27%) or with vendors (40% vs. 31%). Meanwhile, they are somewhat less likely to use industry analysts (66% vs. 78%) or competitive intelligence (56% vs. 69%).

The human experience

While tech is important, the role of customers and employees (including employees like the CDO and CIO)) and their ability to adapt to change and utilise digital and emerging tech are critical in advancing transformation. However, addressing the full spectrum of human experience remains a serious challenge for most organisations. Like their peers around the globe, African companies lack many necessary digital skills, particularly in user experience and human-centered design (40% say this skill is well-developed in the workforce vs. 38% globally). Further, they could do more to close these skills gaps: currently, just 65% regularly update their talent model to address changing digital skills, compared with 72% of others.

“It is vital that companies invest in digital solutions if they want to be successful. It is even more important that they think through how their investment in digital can drive new business models and financial results.

“Having a high Digital IQ is about integration, and requires fitting together the pieces of the puzzle – the business, the customer and employee experience and the technology – to build one cohesive and transformative solution. This is what will give a company the competitive edge,” concludes Botha.