If there is one phrase that has become commonplace in the realms of IT and business, it is Digital Transformation. Along with encompassing a very defined set of strategies for dealing with a changing world, it has also come to divide those organizations that are proactively responding to disruption from those that are still trying to make old ways work, and in danger of being disrupted.

The latest research from Dell Technologies has exposed a few striking contradictions. For example, just 8% of South African businesses are Digital Leaders, according to the Dell Technologies Digital Transformation Index (the DT Index), while 90% of South African businesses are facing major impediments to digital transformation.

And yet, according to the Index, 40% of South Africa businesses believe they’ll disrupt rather than be disrupted, and only 3% of SA’s Business Leaders believe they’ll struggle to meet changing customer demands within five years.

Barriers to digital transformation

The reality is that, as mentioned above, a large majority (90%) of South African businesses are having to contend with significant impediments to digital transformation today. Indeed, the top five barriers to digital transformation, according to the report, include:

1. Lack of the right in-house skill sets and expertise
2. Data privacy and cybersecurity concerns
3. Lack of budget and resources
4. Regulation or legislative changes
5. Lack of alignment and collaboration across the company

These barriers are hampering digital transformation efforts. As well, a good chunk (77%) of South African business leaders believe that digital transformation should be more widespread throughout the organisation.

In a bid to track to what extend digital transformation is making its presence felt, the DT Index’s calculations are based on companies’ perceived performance in the following areas: delivering against the core attributes of a digital business, their existing IT strategy, workforce transformation strategy and planned investments.

Doug Woolley, GM, Dell EMC South Africa

The company explained that two years after the DT Index’s initial launch in 2016, Dell Technologies and Intel have more than doubled the scope of the research, from 16 countries to 42 and benchmarked 4 600 businesses, using the following groupings: Digital Leaders, Digital Adopters, Digital Evaluators, Digital Followers and Digital Laggards.

The Digital Transformation Index has tracked movement across various groups. For instance, 23% of businesses now are categorised as Digital Adopters. These companies have advanced digital plans and innovations in place to power their transformation.

However, the Index also reveals that too many companies are still in the bottom two groups, which indicates that they’re either moving too slowly or don’t even have a digital plan in place.

 “We’ve talked about being on the cusp of tremendous change for some time now. That’s no longer the case,” said Doug Woolley, GM of Dell EMC South Africa. “The next digital era has arrived and it’s reshaping the way we live, work and conduct business. Which means that time is of the essence. Genuine transformation needs to happen now, and it needs to be radical," he continued.

Conquering their challenges

The research indicates that businesses are taking steps to overcome their barriers, along with the threat of being outmanoeuvred from more nimble, innovative players, Although progress in these areas is patchy/slow. A few of the statistics that illustrate this include:

• 64% of local businesses are using digital technologies to accelerate new product/services development
• 64% of businesses are building security and privacy into all devices, applications and algorithms
• 53% are striving to develop the right skills sets and expertise in-house, such as teaching staff how to code
• 60% are sharing knowledge across functions, by equipping IT leaders with business skills and business leaders with IT skills

Companies are also turning to emerging technologies and cybersecurity to power (and secure) their transformation.

The report further revealed just what companies are planning to invest in, within the next one to three years. Not surprisingly, cybersecurity ranks at the top of the list. According to to the Index:

• 65% of South African businesses intend to invest in cybersecurity
• 49% of South African businesses intend to invest in IoT technologies
• 46% of South African businesses intend to invest in Multi-cloud environments
• 41% of South African businesses intend to invest in Flash technologies
• 34% of South African businesses intend to invest in Compute-centric data center design

But what about the cutting edge of what is happening? According to the Index, a small but significant number of businesses are planning to experiment with nascent technologies. 20% will be investing in blockchain, 18% in quantum computing and 20% in VR/AR.

“It’s an exciting time to be in business. We’re at a crucial intersection – where technology, business and mankind meet to create a better, more connected world,” added Woolley, Dell Technologies. “However, only technology-centered organisations will reap the rewards offered by a digital business model, including the ability to move quickly, to automate everything and to delight customers. This is why digital transformation needs to be a number one priority,” he concluded.