Only two percent of South African companies fall into the Digital Leaders category (see Figure 1). While Digital Leaders demonstrate leadership in digital capabilities and services, they have yet to realise and unlock the trapped value from these investments. Their inability to do this is often due to the preservation of their existing core business at the expense of truly expanding into digitally contestable markets. Interestingly, Business Leaders, which have not yet embraced digital change, as indicated by their low score on the Digital Performance Index, make up 22 percent of the sample.
South African Digital High Performers and Digital Leaders enjoy, on average, higher revenue growth of 32 percent compared to other companies.
One rationale for the limited investment in digital by Business Leaders could be their focus on sustaining their current profitability levels. However, the research revealed that Business Leaders lag behind Digital High Performers across all other financial indicators, including, more specifically, the company’s “future value”, which measures how investors expect the company to grow. Here, South African Digital High Performers outperform their Business Leader peers by 21 percent in terms of future value expectations, as reflected in the share prices.
South Africa’s telecommunication, mining and hospitality industries are aligned with their global peers. However, there are notable gaps across the electronics and high tech, consumer goods & services, energy, retail and construction industries. Globally, Digital Natives – companies that originate as disruptive players and are set up as digitally enabled organisations from inception – were also assessed. These companies, such as Amazon, Alphabet (previously Google), Apple, Facebook, Salesforce, Uber and Netflix, significantly outperform other companies, demonstrating their ability to clearly translate digital investments into superior business performance, with a score of 3.5 compared to the global cross-industry average of 2.1 and the South African cross-industry average of 2.0.