South African businesses are accelerating digital transformation efforts, with many initiatives set to take shape in 2021 amid unprecedented uncertainty.

The latest Dell Technologies Digital Transformation Index, one of the first local studies to measure business behaviour amid the Covid-19 pandemic, found that 79% of South African organisations have fast-tracked some digital transformation programmes this year.

A further 84% are in the midst of reinventing their business model, which is five percentage points more than the global average of 79%.

The third biennial ‘Digital Transformation Index 2020’ report for South Africa, undertaken in November and December 2020, indicates that organisations across the country have already started to roll out significant digitalisation initiatives to drive business transformation.

“In many cases, South African organisations surveyed are ahead of the global average and can be seen to be advocating digital transformation initiatives,” says Dell Technologies South Africa MD Doug Woolley.

About 23% of South African organisations are planning to invest in virtual, or augmented, reality, compared with the global average of 16%, while 44% intend to invest in artificial intelligence (AI), which is higher than the global average of 33%.

South Africa’s ‘digital leaders’, the category describing the most digitally mature organisations, remained the same at 8% between 2018 and 2020, while ‘digital adopters’, the second most digitally mature group, increased from 23% in 2018 to 49% in 2020.

The third most digitally mature group, ‘digital evaluators’, experienced a 4% decline between 2018 and 2020.

“The South African study also records a modest drop of 3% in the number of ‘digital laggards’ (the least digitally mature group) since 2018 and a fall in the second to last group, ‘digital followers’, by 13 percentage points. These organisations are moving up, into the ‘digital adopter’ group, which has expanded significantly,” he says.

Organisations in South Africa are also more likely to have completed their most recent round of investment in digital technology, including AI, edge, digital services and digital workplace, compared with their global peers.

South African businesses, at 49%, also outperformed their global peers, at 36%, in investments into data management and analytics.

However, the index reveals that continuous transformation is proving difficult to sustain, with 94% of organisations globally facing entrenched barriers to transformation.

In South Africa, the barriers faced include a lack of resources, a lack of economic growth and a lack of the right technology solutions to work at the speed of business.

Further, Woolley comments that, prior to the pandemic, business investments were strongly focused on foundational technologies, rather than emerging technologies, and 84% of the South African organisations surveyed recognise that, as a result of disruption this year, they need a more agile and scalable information technology infrastructure to allow for contingencies.

The findings also show that South African businesses are far more likely to invest in emerging technologies within the next one to three years than the global average.

The report shows that 47% are likely to invest in fifth-generation infrastructure, 46% in AI algorithms, 44% in real-time applications at the edge, 42% in cybersecurity solutions and 38% in data management tools to transform data into something that is useful and protected.

Recognising the importance of emerging technologies, 66% of the respondents in South Africa believe remote learning will become more common in the next three to five years, which could pave the way for wider educational opportunities for employees and students in the country.

The Dell Technologies Digital Transformation Index, a global study analysing and mapping the digital transformation progress of mid- to large-sized companies, surveyed 5 300 C-Suite respondents globally from 23 countries, representing a variety of industries and functions.