Deloitte Digital Disruption Index helps executives uncover digital skills gaps

Johannesburg, 7 October 2020 - In order to embrace the disruption brought on by the digital age and to thrive in the new economy, organisations must adopt a digital strategy that re-engineers legacy business models to be centred around critical business imperatives , supported by digital leaders and enabled by technology.

This is according to the latest report by Deloitte Africa - Digital Disruption Index – South Africa. The report engaged with business leaders responsible for shaping the digital strategy beyond the realm of technology, between February and April 2020.

The Digital Disruption Index – South Africa report examines digital as a business-led construct, which remains centred around achieving the imperatives of the organisation’s corporate strategy, rather than primarily being viewed through a technology lens. According to Heidi Custers, Digital Transformation Strategy Leader, Deloitte Africa, “Digital transformation is the end-to-end business transformation of an organisation, from strategy to operations, from leadership to enterprise-wide culture; enabled by exponential technologies. In simple terms, digital transformation is how you future-proof a business. If done correctly, increasing your digital maturity should drive tangible business value.”

South African organisations are digitally maturing, but are they moving fast enough?
Digital transformation is still a work in progress for most South African organisations. According to the report, 33% of organisations do not have a coherent strategy for taking advantage of digital technologies and ways of working, while 69% feel they do not have the adequate skills for the digital economy. 37% of senior leaders said that their organisations are in the early stages of digital development – and challenges are specifically pronounced for these organisations as three-quarters of these do not have a coherent digital strategy. In addition, 92% of these ‘early stage’ organisations indicate their talent pool is insufficient.

Confident digital leadership is lacking
Not all senior leaders feel they are in a position to lead a digitally enabled organisation: 46% of respondents indicated they are not confident to successfully lead an organisation in the digital economy, and 42% do not believe that their organisation provides them with adequate resources to improve their digital capabilities. Most leaders rely on self-learning to further their understanding of digital technologies and ways of working. According to the findings, Chief Financial Officers (CFOs) are currently playing an important role in driving the digital strategy. However, Deloitte maintains that the success of the digital strategy relies in the adequate buy-in and support from executives across all functional areas of the organisation.

“An executive leadership team that has truly embraced a digital mindset is perhaps the most important competitive advantage an organisation can have at the moment. This will define the winners and losers in the digital economy,” says Valter Adão, Chief Digital & Innovation Officer, Deloitte Africa.

Digital skills and learning are more important than ever
A lack of digital savvy talent was cited as a major challenge by senior leaders, with 69% of organisations regarding their current talent pools as insufficiently equipped to execute digital strategies. This increases to 92% for early stage organisations.

While only 24% of senior leaders believe there are enough school leavers and graduates with the right digital skills in South Africa, only 40% of senior leaders believe their organisations’ learning and development curricula support their digital strategy. “This emphasises the need to redesign the workforce and re-engineer talent models to optimally shape the future of work. Developing exponential professionals for more meaningful work, implementing technology take over laborious tasks, and outsourcing specialists when required to drive the technologies will fast-track the Future of Work,” continues Adão.

Customer at the centre
Custers believes that by placing customers at the centre of an organisation’s strategy, leaders can focus and give direction to an overall digital transformation. According to the report, senior leaders regard creating a unique customer experience as the primary reason for embarking on a digital transformation journey, and sales and marketing as the top functional area for present and future digital technology investments.

“COVID-19 presents a unique opportunity for leadership to start looking at their organisations differently by utilising customer centricity, enabled by technology, as a way to recover and thrive,” says Heidi.

Digital transformation is accelerating technology investment
Investment in digital technologies is accelerating, driven by digital transformation. Most organisations surveyed have already invested in market-established digital technologies and ways of working, including cloud, cyber security and data analytics. Around two-thirds of senior leaders regard these technologies as business critical technologies. “This demonstrates that organisations are embracing the opportunities presented by these technologies, and the value of leveraging digital to unlock exponential growth inside their organisations, concludes Adão.”