While key vertical market sectors clearly recognise the value of technology, more than half remain under-prepared for the future.
Some 92% of businesses across South Africa’s key industry sectors agree that digital adoption has a direct impact on company profits. Yet despite such broad realisation, there appears to be a disconnect between recognition of this fact and taking action on it. In fact, more than half of these businesses indicate that they are unprepared for the future, suggesting that they are unsure as to how technology changes will impact them or their market sector.
In a recent study by Ipsos Marketing, commissioned by Citrix, key South African industry verticals — namely mining, manufacturing, retail, and the financial services sector — were surveyed to discover how technology is impacting businesses in particular areas and what this means for the future of these sectors.
The good news is that the future of technology and its impacts is mostly seen as positive, and there is a realisation that these industries need to move towards becoming more technology-driven in an increasingly knowledge-based economy.
Some of the key positive views of future technology include that it will: help to boost profits (92%); force businesses to be more agile (92%); open borders across markets (90%); drive more automation of work processes (90%); lead to the up-skilling of employees (88%); and require more entrepreneurship (82%).
On the other hand, there are also negative effects outlined by these organisations, with just over half agreeing that technology will lead to a growing divide between rich and poor (56%), while 51% suggest that it will increase unemployment, and 45% even fear that it will make humans redundant.
Wait and see
Unsurprisingly, the majority of companies are choosing to adopt a wait-and-see attitude to technology, rather than positioning themselves as innovators, with just over three quarters (76%) describing themselves as ‘followers’, with the ‘innovators’ comprising the remaining 24%. Interestingly, only 19% of retailers view their organisations as innovators, while 39% of those in manufacturing consider themselves as innovators, despite their apparent diminishing importance in the SA economy.
Something that is worth noting is the fact that while 92% agree that businesses will be forced to be more agile and adapt more quickly, only 54% feel prepared for the future. This demonstrates that while there is high awareness for the need to adopt technologies and prepare, there seems to be a lack of know-how, leadership or guidance around what needs to be done.
Most organisations and industries continue to struggle with balancing the benefits and the challenges related to technology. For example, there is a clear understanding that in the long term, adopting technology will save the enterprise money; however, there is also recognition of the fact that it is expensive to implement and disruptive for the business during the implementation process.
By the same token, adopting technology offers the business a whole new level of profitability, as it allows for new opportunities to be embraced, and efficiency, since it improves the effectiveness of employees. At the same time, organisations are rightly concerned about the speed of technological advancement, fearing that they may invest in the wrong technology and thus fail to achieve a return of investment.
Furthermore, there are worries that clients and stakeholders might struggle to align with any new technology implementation, while there are also issues related to legislative requirements and security concerns.
Looking at the four market sectors, it is interesting to note that those expected to be the quickest at adopting technology change – finance (34%) and retail (24%) – are not seen by their peers as being the future economic leaders. Instead, it is mining and manufacturing that are viewed as being such leaders, despite lagging significantly in terms of technological change.
What does this mean?
What is clear from this study is that whilst businesses within these various sectors in general realise the advantages of staying on top of the technology curve, many remain concerned about challenges linked to the adoption of new solutions. The most obvious answer to this conundrum appears to be to ally themselves with a technology partner that has a clear understanding of the near to medium term technology future, and which can assist them in dealing with the trends that are specific to their sector.
For example, in the manufacturing space, such key areas of facilitation might include the unpacking of the requirement for IT infrastructure, the implementation of automation and even employee up-skilling to enable them to be proficient with the new solutions. In the financial services sector, there remains a strong element of caution in the adoption of new technologies – at least partly due to legislative and compliance issues – and an effective technology partner would thus be positioned to assist in facilitating the up-take of necessary technology.
The study has noted that retail is less likely than other industries to acknowledge the impact of technology to date, or to see the urgency of the future, as technology is generally seen as something that only affects parts of the industry, such as online retail. However, despite perceptions, this is not the case and a technology partner would be able to make retailers more aware of the depth of change that is afoot.
Finally, mining is viewed as sluggish to adapt to technological change, despite seeing itself as an industry of great importance to the economy. However, should these verticals wish to remain important over the long term, their success will likely rely to a large extent on adapting fast to technological change. The right partner would thus be able to assist them in joining the technology dots to help them to remain leaders in the economy.
Ultimately, these various market sectors are dependent to a greater or lesser degree on technology, and will need to evolve as technology itself evolves, if they are to remain relevant. Doing so requires finding the right partner, one that can make the links between technology and economic leadership clear, and can help to facilitate the process of adopting the right technology to suit the specific vertical market.