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), according to the 10th edition of PwC’s Global Digital IQ survey. However, South African companies stand at risk, with less than half (47%) rating their organisation’s IQ over 70%.
“Digital IQ has a different meaning today than it had when PwC (www.PwC.com) 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.”
Digital IQ, the measurement of an organisation’s ability to harness and profit from technology, has actually declined since, adds Botha.
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. Now, 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.
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).
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.
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%).
“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,” Botha says.