South African Firms Know How to Ride the Storm
By Charles Webster
In a recent report titled “The Innovator’s Advantage”, Accenture surveyed 581 executives in 18 countries. Overall, it found that the businesses that were most innovative used technology more successfully than others. South African executives reported that, because of their experience of working through periods of economic instability, the present downturn is having less of an impact in South Africa than in many other places – though it may not always feel that way.
General conclusions about the country include:
- South African executives are in touch with their organisations and understand how to reform them to achieve senior executives’ priorities;
- IT has an important role to play in developing and supporting business strategies;
- The impact of the global economic downturn has been felt less in South Africa, though businesses still believe they are very vulnerable to swings in investor confidence;
- The need to reduce costs has been an important influence on business in South Africa;
- Firms are reshaping their organisations and rejuvenating their range of products and services in order to attract new customers.
The majority of companies are expanding their operations and diversifying their sources of revenue. South African business leaders polled in the study were aware of the problems facing their organisations, and were responding with a commitment to organisational change. Technology has played an important role in re-appraising operations (both back- and front-office), but the desire to reduce costs has had a significant impact on attitudes to IT and innovation.
Despite concerns about the bottom line and the stability of stock markets, leaders in South Africa have been proactive in expanding their operations and focusing on opportunities in new markets. They are also more likely to re-appraise their range of products and services and to convert internal business processes into saleable commodities than companies in almost any other country surveyed.
South Africa have been proactive in expanding their operations and focusing on opportunities in new markets. They are also more likely to re-appraise their range of products and services and to convert internal business processes into saleable commodities than companies in almost any other country surveyed.
Corporations are aware of the need to re-structure their back- and front-office operations to support this agenda of change. A high proportion of South African businesses – higher than in any of the other 17 countries surveyed – report making extensive changes to marketing and sales (67 percent), operations (47 percent) after-sales service (40 percent) and procurement (37 percent), in order to support their push into new geographic and product markets.
Technology investments were well aligned with these priorities – over 80 percent of executives indicated that their organisations had either installed or planned to install supply-chain, CRM and after-sales service systems. Another 60 percent of executives had installed or planned to install F&A, eLearning and business intelligence systems to address cost and workforce performance objectives. Given how closely these investments are aligned to strategic priorities, it comes as no surprise that a significant majority of South African executives (90 percent) believe that IT is a source of competitive advantage for their organisations.
Concerns about costs underlie many aspects of business strategy in South Africa – perhaps partly because of the perceived exposure to currency fluctuations. Just under half of those surveyed pinpointed operational costs as a main priority for their organisation. More than 75 percent of those surveyed believed that cost issues presented a barrier to the use of IT systems to expand and develop their organisations. A further 70 percent also cited cost concerns as an important reason for collaborating with other organisations. And South African executives were more likely than those in other countries, such as the United States or Brazil, to regard innovation and cost cutting as equally important.
Despite this, a far higher proportion of South African executives (83 percent, the same as Brazil), than US business leaders (63 percent), are currently piloting initiatives and IT systems to address their top strategic priorities. Actions speak louder than words, and in this case perhaps innovation and experimentation is more important to South African business than might be thought at first glance.
For more information contact Charles Webster on firstname.lastname@example.org