By Cathy Smith

Championing the cause of technology as a business value driver has become an essential component of modern leadership. Notwithstanding the immense impact of the pandemic on the way we work, live and plan our lives, the world has long been in a state of flux due to the transformative impact of new technologies and increased digitisation.

Today, business is IT and IT is business. Even in the public sector, a state’s ability to harness powerful technologies and digitise its interactions with citizens plays a huge role in how effectively that state can deliver its services.

Collectively we will invest $1.8-trillion in digital transformation initiatives this year alone, a 17.6% increase over 2021 and a huge jump from the collective $1.18-trillion we spent on such initiatives in 2019. And with spending continuing at a compound annual growth rate of 16.6% over the next five years, the role of digital transformation has never been greater.

And yet, too often the impact and promise of digital transformation initiatives is undermined by a lack of understanding of the role technology plays.

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Led by digital dodos

The truth is, many companies are led by executive teams with a limited understanding of technology. One study found that only 7% of large companies have digitally-savvy executive teams.

While not every CEO needs to be fluent in Python or be able to articulate the inner workings of quantum computing, a basic understanding of technologies and their function is essential in today’s digitally-led economy.

When business leaders are out of touch with technology, it can lead to some embarrassing situations. Just think back to ageing US congressmen asking Google representatives why negative stories appear when they enter their names into Google’s search bar. Or former IBM president Thomas J Watson’s 1940s comment that “there is a world market for about five computers.”

We may have a quiet laugh at the absurdity of such comments, but when they emanate from the mouths of company leadership at a time when sound technological investment can literally mean the difference between success and failure, they lose their comic touch.

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Companies are investing more money, resources and manpower in technology and digital transformation than ever before. When the value of that investment is not clear to the executives leading the business, it’s unlikely that companies will achieve a positive return on investment or solve the challenges they seek to overcome.

More importantly, the lost opportunity cost could set back companies’ growth and innovation plans for years, leaving them lagging competitors at a time when competition is at a peak.

Turning tech investment into executive action

A sad but inescapable truth is that those controlling the purse strings – whether they be investors, boards of directors or finance ministers – will not become advocates of IT if they do not understand the value it creates.

Digital transformation projects that fail to realise value or experience severe cost and time overruns, can undermine the trust that decision-makers have in technology. This creates a disconnect between business and IT that hampers future digital transformation initiatives.

However, when executives do understand and see the value, and are clear on the application of technology in their own business to improve the lives of their customers, there is no limit to the innovation and growth they can unlock.

To start, focus on asking the right questions. Instead of wondering about which mix of cloud technologies is best, or what the scope of their IoT deployment needs to be, executives should focus on the business objectives they are trying to achieve.

“How can I remove friction from my customer experience?” or “how best do I respond to a new digital competitor to my business model?” are far better departure points for digital transformation than “which technologies should I acquire to be successful?”.

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Once the objective is clear, business and IT need to collaborate to develop an effective implementation and change management plan driven from the top through middle management and across the organisation. A sustained campaign highlighting the value of the digital transformation project and what it means to business users, customers and the broader organisation can greatly assist with driving adoption of new tools and processes.

A CEO or CFO that is actively involved in the execution of the company’s digital transformation strategy and understands the close alignment between tech and business strategy can act as powerful role models to the rest of the organisation. It’s no surprise that some of the most successful digital transformation projects have hands-on involvement from the C-suite, who set the pace for how the business collaborates with IT.

Investing in training and skills development ensures every layer of the organisation – from the top floor to the shop floor – understands the value of the new tech-enabled capabilities and can apply the new tools effectively when performing their day-to-day work tasks.

Critically, executives need to establish a culture of continuous improvement and refinement where technologies, tools and processes are constantly fine-tuned to serve the precise needs of the organisation and its customers, partners and suppliers. 

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Whether you lead a nimble start-up, large enterprise or an entire nation, as a leader you need a well-developed understanding of the role technology can play in improving lives, developing new solutions to present challenges, and driving growth.

Gaining some technological nous is an essential component of successful modern leadership.

Cathy Smith is the Managing Director at SAP Africa

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

By Cathy Smith

As we continue rebuilding following the economic and social damage caused by the pandemic, there is ample opportunity for optimism. I am encouraged by the continent’s rich history of innovation and ingenuity. After all, Africa is the cradle of humankind, where stone tools were first invented (2.6 million years ago in modern Ethiopia), papyrus was invented by the Egyptians more than 5 000 years ago, and where the world’s first university – in 859 – was created in Morocco.

Today, Africa is more prosperous than at any other time in history, with more children having access to education opportunities, fewer people living in extreme poverty, and most people living in democracies.

A shining example of the continent’s willingness to meet our shared challenges, which include greater employment opportunities, economic growth, education, and mitigating the impact of climate change, is Africa’s vibrant ecosystem of social enterprises that put people before profit and strive to solve the issues we collectively face.

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As we mark the hosting of the 2021 Social Enterprise World Forum, which took place in late September, it is important that we note the role such enterprises play in Africa, and identify ways in which the public and private sector can support the growth of this critical sector.

Understanding the role of social enterprises

What constitutes a social enterprise? According to one South African study, a typical social enterprise is purpose-driven, is not reliant on grants and handouts, and has a particular identity that shies away from being bundled along with normal businesses, charities or NGOs.

At the previous Social Enterprise World Forum held in Ethiopia in 2019, public and private sector leaders from around the world recognised the important role social enterprises play in addressing socio-economic issues.

In Ethiopia alone, data suggests that half of the country’s estimated 55 000 social enterprises are led by people under the age of 35, and more than a quarter (28%) are women-led.

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Youth unemployment in particular remains an issue in most African countries. With the world’s largest youth population – 20% of sub-Saharan Africa’s population is aged 15 to 24 – ensuring gainful and sustainable work opportunities for youth remains a key priority for the continent.

Across sub-Saharan Africa, social enterprises are estimated to directly create between 28 and 41 million jobs. In fact, based on available data, social enterprises employ on average 20.6 people compared to only 1.7 for the average SME.

Social enterprises can therefore play an important role in addressing youth unemployment. One report estimates that the 141 500 social enterprises in South Africa directly employ 590 000 people, a figure that is expected to grow to 666 000 direct jobs by 2030.

Considering the country’s urgent need for youth employment opportunities – the latest official data suggest nearly half ( 46.3%) of the country’s citizens aged 15 to 34 are unemployed – the impact that social enterprises could have on youth employment should not be underestimated.

Social enterprises inspire hope

Take the example of the Siyafunda Community Technology Centres. Siyafunda, an Africa Code Week (ACW) partner, is a social enterprise providing a network of community centres that extend access to computers, the Internet and digital technologies to local communities where such access may be lacking.

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In addition to its work with Africa Code Week (ACW), Siyafunda provides accredited digital ICT courses and skills training, business and entrepreneurial skills development, adult literacy programs and e-learning facilities.

Vitally, Siyafunda enjoys the benefits of a robust ecosystem of partners, including local, provincial and national government, schools, universities, and private and social organisations.

With research indicating that African youth are more inclined toward starting social enterprises than commercial ones, improving support for social enterprises could have far-reaching positive consequences for youth employment and skills development across the continent.

Support needed to ensure social enterprise success

As with any emerging small business or start-up, social enterprises face the daunting task of survivability, especially during the early stages of its growth. A study conducted in Mexico found that 83.5% of social enterprises in that country failed within three years. Four in ten failed within the first year of operations.

A World Bank report found that South Africa was the only country in sub-Saharan Africa that explicitly recognises social enterprises in policy, and recommended that it supports existing initiatives, programs and capacity building, including at universities and NGOs with a view to growing the social enterprise ecosystem and improving its chances of success.

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Governments can certainly play a vital role in supporting social enterprises, but the private sector can make valuable contributions too. Private sector support – via investment, technology and skills transfer – could accelerate the impact social enterprises make.

This shouldn’t be a CSR project or peripheral activity: companies must link their support for social enterprises to their core business to ensure relevance and sustainable impact.

For example, larger enterprises could build this type of support into their supply chain processes by committing a percentage of their procurement spend to social enterprises. Leveraging the size and reach of the Ariba network – which supports more than double the commerce of Amazon, Alibaba and eBay combined – could give enterprises an accessible entry point to grow their businesses.

SAP, for example, launched its 5x5x25 initiative, which commits 5% of our global procurement to social enterprises and 5% to diverse businesses by 2025. The initiative is designed to leverage corporate support from B2B procurement and technology to give social enterprises a boost and increase their impact.

Considering that 78% of social enterprises actively seek to create jobs (compared to only 27% of for-profit enterprises) and that 35% of social enterprises purposely support vulnerable population groups (compared to only 7% of for-profit enterprises) support for social enterprises can have far-reaching positive consequences for countries, communities and the continent.

Now is the time for private sector leaders to step up and play an active role in the success and growth of Africa’s social enterprise sector.

Cathy Smith is the Managing Director at SAP Africa

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry