Has COVID-19 Fast-Tracked 4IR?
by Barry Dwolatzky and Mark Harris[Note: A shorter version of this article was published in The Daily Maverick on 1 June 2020]
While South Africa’s Presidential Commission on 4IR was polishing its recommendations, an unexpected and unwelcome tsunami was gathering on the horizon. On March 5th 2020 the first COVID-19 infection was detected in South Africa. On March 15th the President declared a State of Disaster and on 26th March the country went into a national lockdown. Digital Transformation, which had long been discussed, suddenly became an essential requirement for businesses and other institutions to survive. Has the pandemic fast-tracked the arrival of 4IR?
The Presidential Commission on the 4th Industrial Revolution
In April 2019 President Cyril Ramaphosa appointed a Commission on the 4th Industrial Revolution. A year later, on April 16th 2020, Deputy Chair of the Presidential Commission, Professor Tshilidzi Marwala, published the last of his series of eight weekly articles in the Mail & Guardian setting out the key findings of the Commission. Overall, the proposals focus strongly on the so-called “4IR technologies” including artificial intelligence (AI), the Internet of Things (IoT), 3D printing and others. The Commission proposes a structured multi-year strategy in which “technologies would be used to elevate South Africa’s developmental agenda” [M&G, April 3, 2020].
While the Presidential Commission on 4IR was polishing its recommendations, an unexpected and unwelcome tsunami was gathering on the horizon. On March 5th 2020 the first COVID-19 infection was detected in South Africa. On March 15th the President declared a State of Disaster and on 26th March the country went into a national lock-down.
It is still far too early to understand the short- and longer-term ramifications that the COVID-19 pandemic will have on South Africa, our economy and institutions. However, one immediate and obvious consequence has been the rapid adoption of digital technology. This is driven by necessity since it is the only way to keep organisations functioning and society connected.
Government, business and society had to forgo any strategy and planning and needed to react to the pandemic in a matter of days. South Africa and the world needed to revolutionise their business just to accommodate the work from home requirement. Digital transformation was upon society with technologies that have existed for decades.
There was an immediate requirement to communicate with employees, pandemic coordinators, inter-governmental players and society in general – the actions to provide connectivity and access tools to all stakeholders has been astounding.
The pandemic necessitated that organisations had to enable employees to work from home, B2C organisations had to fast track their e-commerce capability, parents had to home school using media players and online content, tech avoidance was overcome with the need for online banking and instant money transfers to the unbanked for instant payments, connectivity had to be facilitated for all employees, digital signatures became a necessity and Health and Safety Policies moved from policy to execution especially as adherence to new regulation took priority. The world was catapulted into the digital and 4IR era overnight.
In this article we reflect on digital transformation in South Africa in response to the COVID-19 pandemic. We also attempt to link this to the broader issue of 4IR and ask how recent events impact the recommendations of the Presidential Commission and other 4IR strategies.
Digital Transformation Enablers and Inhibitors
Over recent years many digital transformation initiatives have failed, both in South Africa and internationally. Various authors have analysed these stalled initiatives in attempting to explain their failures. In an article in Forbes magazine published on September 30th 2019, Blake Morgan wrote that 70% of digital transformations fail. She analyses digital transformation initiatives at three large corporates, namely GE, Ford and Proctor & Gamble (P&G), and concludes that although “executives know how crucial it is to evolve with technology and create digital processes and solutions, putting it into action is a different story.” Each of the instances of digital transformation she described failed for different reasons. GE tried to do too much at the same time – their transformation effort affected too many parts of the company simultaneously. Ford attempted to isolate their digital transformation initiative from the rest of the company instead of integrating it with the core of the business. P&G didn’t align their initiative with similar initiatives being undertaken by their competitors. They also failed to take account of external cycles in the broader economy.
While each failed transformation initiative can be attributed to specific reasons, a common theme in almost all failed digital transformation projects is a lack of buy-in. Either executive support for the proposed initiative is not sufficiently clear and enthusiastic or change management is unsuccessful. People have a natural propensity to resist change, and digital transformation usually involves profound and significant change in how people are expected, or required, to behave. This resistance to change might be passive in nature – people just don’t go along with the initiative – or aggressive. Aggressive resistance to transformation can take many forms, including withdrawal of executive sponsorship, resistance from trade unions, rejection by customers and various other actions aimed at sabotaging the project.
In South Africa, the challengers of creating a new digital world was compounded by other inhibitors to digital transformation such as poor connectivity, lack of digital literacy and a low level of access to suitable technology, such as smartphones. Even large organisation believe that the lower income group would never be able to participate in a digital economy due to the inhibitors. The onus is now on government to ensure that no-one is left behind as we enter this stage of our economic development.
Some examples of Digital Transformation in SA in response to the COVID-19 pandemic
Detailed case studies of how specific organisations and sectors in South Africa are responding to the COVID-19 emergency are still to be written. We have, however, been collecting some of our own observations and those of others. We have used these to inform the comments that follow.
The sudden decision by Government to impose a general lockdown in South Africa caught most businesses and individuals unprepared. Companies and institutions had only 3 days (lockdown was announced on March 23 and started on March 26) to move to a work-from-home (WFH) policy. Different sectors dealt with this enormous challenge in different ways, some coping better than others
a) The Health Sector: This sector is obviously on the front-line of the response to the pandemic. Hospitals, laboratories and testing centres either had emergency procedures in place or developed and refined these on the fly. Making such preparations has been a priority since the primary purpose of the lockdown is to “flatten the curve” thus giving these facilities the time they need to prepare. In other parts of the health sector we have seen rapid change and innovation. General Practitioners (GPs) in family practice have, for example, spontaneously adopted basic tele-medicine methods. Consultations with GPs and other health professionals, including psychologists, have rapidly moved from being face-to-face to a widespread use of the telephone, messaging platforms, such as WhatsApp, and video conferencing tools, such as Skype or Zoom. Pharmacies have moved rapidly to the use of Apps to allow customers to order chronic medication or submit prescriptions.
Another important innovation in this sector has been around data. In coordinating the fight against the pandemic scientists, health professionals and others managing the national response have required access to data and tools to analyse and understand it. Various data dashboards and visualisation tools have been rapidly developed. One example of this is Wits University’s COVID-19 Dashboard (http://covid19sa.org ) launched within days of the outbreak of the virus in South Africa. The Dashboard is maintained and constantly refined by a team of volunteers including data scientists, physicists, epidemiologists and students from a variety of disciplines. The interesting aspect of the Wits Dashboard and many others is that they have been developed using freely available tools such as Google’s Data Studio. In some parts of South Africa we are also seeing the beginnings of the use of cell-phones or tablets to support contact tracing and data collection in the field. Telkom and Samsung have announced a collaborative effort in this regard.
An important initiative at the cutting edge of digital technology is a collaboration between IBM Research’s Africa Lab and Wits University which has led to the development of a sophisticated geospatially-based decision support tool which, once sufficient data is available, will use cutting-edge artificial intelligence (AI) and machine learning (ML) technology to support those managing the response to the pandemic.
b) Education: Schools and tertiary institutions closed a week before the general lock-down. Although the issue of e-learning and distance education has been discussed and debated in South Africa for decades, the sudden arrival of the lockdown caught most institutions completely unprepared. It is in this sector that the deep chasm of the digital divide has become most visible. Issues of connectivity (both the cost and availability of network connection) and access to technology and computer literacy have become critical factors. Schools are attempting to continue their educational programmes using online resources. Even in well-resourced private schools there are those who can’t for various reasons, access these resources from home. Some Universities, such as Wits, have negotiated deals with mobile operators to zero-rate certain educational sites on the Internet. Wits has also provided all students with 30GB of data for a month and dispatched laptops to students throughout the country. While initiatives like these are certainly commendable, the gap between the digital-haves and the digital-have-nots is painfully obvious.
For those on the “haves” side of the digital divide we have seen an explosion in the availability of educational content, based mostly on platforms such as Zoom, YouTube and Microsoft Teams. Webinars and classes are being run constantly and the range of educational material on offer – most of it free – is diverse and (mostly) of incredibly high quality.
c) Justice: Who would have imagined a few months ago that advocates would be arguing cases on Zoom to judges while they all sat in their studies at home? This is now happening in “virtual courtrooms” around South Africa. Huge boxes of paper files are no longer being lugged from double-parked cars into buildings but are being shared on Dropbox. Judges and lawyers are not pulling dog-eared legal volumes from wall-to-ceiling book-shelves in their chambers but are accessing them online. One of the professions most reluctant to embrace digital transformation before the lockdown has been transformed in the space of a few weeks.
Legal practice has also changed significantly. The notoriously expensive pre-COVID-19 face-to-face legal consultations at which clients would sit in a boardroom with a team of lawyers, advocates and their clerks are now happening on Zoom. Initial indications are that this break from tradition is leading to much quicker, smaller and more focussed engagements which, hopefully, will drive the costs of the legal process down.
We could list other sectors. The amazing fact is that, driven by necessity, individuals and institutions are willingly adopting digital technology in order to survive and continue operations. The thoughtful steps advocated in a formal “digital transformation lifecycle” (see below) have not been followed. And – most importantly – the technology adopted has been existing applications that are readily available. This digital transformation has been achieved at a very low cost using technology that is free, some of it open source, and all of it easy to use.
This transition has not come without its drawbacks and challenges. While some companies had previously implemented a work-from-home (WFH) policy, it is not a style of work that many South Africans had experienced. For some workers it has been an extremely difficult transition, while others have embraced it enthusiastically. One of the major difficulties, even for those with previous experience in WFH, has been drawing boundaries between the home and the “office”, and between work-time and family- or “own”-time. Many people have been reporting a significant increase in their personal productivity which is explained either by people working more effectively or by them working longer hours. A challenge faced by those who are responsible for managing others is the difficulty in coordinating activities and in monitoring performance. A different mindset, and new tools are needed. Online collaboration tools such a Slack and Trello have proven to be very useful and are being widely used.
Digital Transformation in South Africa beyond the COVID-19 pandemic
We have no way of knowing what will happen beyond the current COVID-19 emergency. We can only guess how long the lockdown with its various levels will last. We also have no idea yet about the effects this crisis will have on our country, its institutions and economy. One thing that seems to be certain, however, is that we will never completely return to the pre-COVID-19 status quo. It is also very important that this change to society brings about massive transformation in societal norms that will not leave the poorer members of society behind again.
It is our belief that the pandemic has removed some of the significant inhibitors to digital transformation in South Africa. These are:
- Executive buy-in: Many of those who run corporate South Africa and other institutions (such as our universities) are traditionally conservative and resistant to change. While they might have spoken over the past decade about the “need to go digital”, they have failed to whole-heartedly support digital transformation initiatives. With the arrival of COVID-19 they now have evidence that digital technology actually works within the context of their organisation, and that it supports effective and better ways of working.
- Policies and Regulations: Most organisations have policies in place to manage the organisation and most of these will have to change to accommodate a new way of working and will have to adapt to the new social structures that is required to allow employees to operate in a very different environment. While policies are required to ensure good governance in organisations, they are also the barriers to transformation and new operating models and policies will have to be create.
Governments are having to rewrite all types of regulations to accommodate the need for rapid change to cope with the changes around us. The need to enable our society in a digital environment will have to be adapted very quickly especially to address the challenges for the marginalised in society.
- Buy-in from staff and other stakeholders: Before the virus many people working within organisations and people interacting with organisations might have been resistant to using digital technology. E-commerce, for example, was very under-utilised by South African consumers. The pandemic has blown away many of these doubts and opened up people’s minds to different ways of working and interacting.
- Concerns about cost and new technologies: A common preconception has been that digital transformation is expensive and requires the development of new customised digital solutions. While the business case for digital transformation often promises reductions in operating costs and improved profitability, the implementation of the necessary changes usually comes with a very large price-tag. Our experience during the COVID-19 lockdown is that many organisations have made effective use of available, low-cost (or free) solutions, most of it on the cloud. Very few organisations have needed to incur significant expenditure on digital solutions to rapidly move to a WFH policy.
- Concerns about skills: Another preconception is that digital transformation requires lengthy and expensive training of existing staff, or recruitment of new staff. An amazing observation during the COVID-19 crisis is how quickly and relatively painlessly people have taken to working in a digital world. We have seen High Court Judges who, a few months ago, proudly claimed never to have touched a computer, setting up and running Zoom meetings. People are learning “how to go digital” from each other, often via digital platforms.
- Connectivity and access: As we said previously, a major inhibitor for digital transformation in South Africa is connectivity and access. While some short-term solutions have been found during the lock-down period, a great deal will need to be done in the future to remove the digital divide. Government, companies and other institutions have all come to realize the importance of having the entire population well-connected. If WFH and online collaboration continues to be widespread beyond the COVID-19 pandemic the need to spend public funds on physical transport infrastructure (such as highways and commuter transport) would be reduced. These funds could be redirected into expanding digital connectivity and access.
A Lifecycle for Digital Transformation
It is often useful to see change as a sequence of steps. In engineering and many other disciplines projects are described as having a ‘lifecycle’. A lifecycle begins with a goal, or ‘driver’, and ends with a destination, or ‘outcome’. Between the driver and outcome are various steps including design, planning and implementation.
For an organisation working to transform itself using digital technology it is helpful to think of a ‘digital transformation lifecycle’ (see figure). This lifecycle consists of the following high-level steps:
- Developing a case for digital transformation: the organisation starts the transformation journey by identifying problems or opportunities that provide an incentive to change. Typical examples of such drivers for change might be improving customer engagement, reducing operating costs or entering new markets. In building a case for change it is always imperative to weigh up benefits and compare them to associated costs and risk. It is also important that there is high-level executive support for the business case that will drive transformation. This would often need to be negotiated.
- Defining a strategy: Since our focus in this article is on digital transformation, the strategy for achieving the desired changes will involve investigating and comparing available and future digital solutions. In many cases some level of innovation will be required and the strategy should suggest ways in which such innovation would be managed. For example, will it make sense to undertake a pilot programme to test possible innovations? Another key part of the strategy is data management. Since most digital technologies focus primarily on collecting, storing, processing, analysing and acting on data, a critical part of the transformation strategy needs to deal with the management of all aspects of data within the organisation. Finally, a strategy for change management needs to be developed. Digital transformation has significant impact on all stakeholders, particularly the customers and staff of the organisation. A successful change management strategy would need to be developed to ensure that each stakeholder group buys into the proposed transformation.
- Designing solutions: It is only once the organisation has a strongly supported business case and a well-defined strategy that the details of technology can be explored. The design of technical solutions often requires trading off between what is ideal and what is possible. Various constraints, such as the budget available, the need to maintain backward compatibility with existing technology and processes, and legislative or regulatory requirements need to be considered.
- Planning and implementation: A plan is developed, resources are allocated and the designed solution is then implemented within the organisation. During implementation progress needs to be monitored and, where necessary, changes are made to the plan, the design or the strategy. Modern digital implementation methodologies emphasise ‘agility’. Agile implementation consists of developing a solution in short iterative steps and places great emphasis on adapting the proposed solution in response to feedback received during the implementation phase.
The digital transformation lifecycle model we described above has been short-circuited during the initial period of the COVID-19 pandemic. There has been no time for strategising and planning. Digital transformation has happened organically driven by the urgent need to keep organisations functioning. As time passes and the new “post-COVID-19 future” starts to take shape, a more organised response, based on the digital transformation lifecyle, will be necessary. The difference now, compared to the situation before the pandemic, is that many of the inhibitors to successful transformation, as listed above, will have been removed.
It will also be interesting to see how innovation is brought into future scenarios. We predict that many of the general-purpose platforms (such as Zoom) will begin to be refined to meet specialised needs. For example, we might see a Zoom add-on for optometrists which uses the existing camera in a laptop computer or smartphone combined with new software to carry out eye tests or retinal examinations. Such innovations will be driven by the needs of specific user communities.
Reflections on 4IR
Over recent years there has been a great deal said about the so-called “4th Industrial Revolution” (4IR). As we pointed out in the introduction to this article South Africa’s Presidential Commission on 4IR submitted its recommendations to Government early this year. These will need to be revisited and rewritten in the light of COVID-19.
One of the key principles at the heart of the Presidential Commission and much of the discussion that has taken place around 4IR is “technological determinism”. This concept implies that technology drives social and economic change. In the recommendations of the Commission this causal relationship is emphasised in the sentence we quoted from Tshilidzi Marwala’s article which says, “technologies would be used to elevate South Africa’s developmental agenda”. The response to the COVID-19 pandemic implies that rather than technological determinism we are seeing the opposite driver for change, namely “social determinism”, which says that social and economic change drives technological innovation. It would be a useful exercise for the Presidential Commission to examine this opposite causal relationship in developing a strategy for 4IR in the post-COVID-19 South Africa.