For over a decade now, digital transformation has been among the buzz words in Tanzania. As time goes on, the term is becoming more popular to entrepreneurs, government officials, politicians and tech enthusiasts.
However, what I have learnt is that despite being a buzzword, what exactly it means and how it is implemented differs from one business to another. For some, like a community radio station I visited in Morogoro in April 2024, digital transformation is about social media presence but the truth is that it means more than that.
The knowledge gap on digital transformation is one of the factors leaving other businesses behind. But what is digital transformation in a real sense?
In simple terms, digital transformation is about using digital technologies to improve business processes, culture and customer experience. The use of digital technologies should be across all business units including human resources management and not one core department or unit alone. It is a vital initiative in boosting business growth as it helps the organisation to respond to ever changing business and market needs.
Accessible to everyone
The ongoing innovation in digital technologies is making digital tools and services more accessible to all types of businesses big and small. This has leveled the playing field, allowing smaller businesses to compete more effectively with larger corporations.
There are several benefits of digital transformation for businesses but I will dive into some of them as they might influence other entrepreneurs to embark and implement it.
Firstly, Digital transformation is key in improving operational efficiency. The ongoing innovation has brought thousands of digital tools such as collaborative tools and automation which are very helpful in improving business efficiency.
Unlike the past where some businesses were forced to deliver services during the day time or hire many staff, digital technologies such as Artificial Intelligence enables automation of many activities from the media where I’m involved in to factories.
Automation technologies can streamline processes, reduce errors, and free up employees to focus on more strategic tasks. According to the Digital Progress and Trends Report 2023 published by the World Bank, companies that have invested in and deployed AI have experienced higher growth in product innovation, labor force, sales, profits, net operating efficiency, and market valuations.
Secondly, businesses should embrace digital transformation because it improves customer experience. Digital technologies have enabled businesses to gather valuable insights into customer behavior and preferences. Unlike offline business engagement which mostly depends on paperwork or no data collection at all for small businesses, entrepreneurs who apply digital technologies in their offerings have access to real time and accurate data about their customers.
Data analytics for informed decision-making
By analyzing data collected through online interactions, companies can tailor their products and services to meet the specific needs of their target audience. This personalized approach fosters stronger customer relationships and drives loyalty. Effective use of data helps businesses in making decisions in improving the quality and quantity of their offerings.
For example, it is easy through data analytics to know which product is most loved by your customers, how much you have earned, and how much you have spent to run your business in real time if everything is running through a digital system.
In our efforts of helping individuals and organisations in using data to run business, at Nukta Africa we have discovered that there are many medium and small businesses rich in data but cannot use them to make decisions including finding the best ways to improve customer experience.
The application of artificial intelligence and machine learning has transformed big time how we offer services to our clients. This has largely improved customer experience. Chatbots nowadays handle routine customer inquiries, while automated systems can optimize inventory management and supply chain logistics. Some of these technologies do not require your business to have billions of money to deploy them.
For instance, some small businesses are using WhatsApp Business or integrated bots to allow their customers place orders or respond to customer inquiries when they are not in the office. This reduces unnecessary delays in responding to customer needs and it increases customer satisfaction. Any business that leverages these technologies at any scale has an opportunity to grow fast and beat competitors.
Nukta Africa has been training and advising media executives and other business officials on how they can use data in decision making. Our approach has been on highlighting techniques to get insights from data and how to connect with events in the market. This helps trainees to build contexts to their data.
New opportunities, more growth
Beside improving customer experience, digital transformation opens up new opportunities for businesses to expand their reach and enter new markets. In a digital world, as I always say there is no small person or small business. Digital innovations like e-commerce have empowered companies to sell their products and services to customers beyond their local and national borders. especially nowadays when internet users are increasing year-on-year.
In Tanzania, for instance, internet users grew by 21 times within 10 years from 1.93 million subscribers in 2014 to 39.3 million subscribers by June 2024, according to Tanzania Communications Regulatory Authority (TCRA).
The increase in internet users and penetration has also raised the number of smartphone users who are highly likely to use or buy products and services online. This is evident from data from the communication regulator and telecoms.
Vodacom Tanzania alone, according to its Annual Integrated Report for the year ending March 2024, added a record-breaking 1.3 million smartphones into the market this year but still nearly half or 49% of its customers are still not using smartphones, highlighting the scale of the growth opportunities. This is an opportunity for businesses to adopt digital technologies to maximise their market.
We have seen small businesses operating in remote areas which have undergone digital distribution selling more products to cities like Dar es Salaam after promoting their businesses online. Social media and content marketing are highly used now to build brand awareness and engage with potential customers. Improvement in internet services across the country has improved accessibility of content and services by improving speed.
Despite the benefits, digital transformation in any organization is highly likely to face challenges such as high costs, low customer adoption rate, cybercrimes and resistance to change among staff and other important stakeholders.
To solve some of these challenges, it is important to note that digital transformation should be driven by the organisation itself. The organisation team should be the one identifying the needs for transformation or at least be ready to accept the change.
The company should have a very clear plan and strategy to implement digital transformation. The team should assess the needs, map stakeholders, determine project costs, benefits and risks. This will empower them to find best ways to raise funds to develop needed systems or buy digital tools, hire new staff or train the team and clients to prepare for the new changes and mechanisms to track performance.
Build a strong digital culture, minimize risks
The good thing with inward digital transformation is that every member in the team is very passionate about the changes and eager to innovate to improve the business. This automatically creates a competitive and inclusive culture.
Borrowing what the Vodacom Tanzania PLC CEO, Philip Besiimire said during our panel discussion on the “Evolution of the Tanzanian Information Environment” at the US-Tanzania Tech Challenge event recently in Dar es Salaam, digital technology is an opportunity to equalize societies across the world. According to him, digital technology gives you the same level of access as other people in the developed world.
Philip’s assertion is true for business as well. Any business regardless of the size and the sector, has an equal chance to grow and survive in the market if it embraces digital transformation in scales according to resources and creates strong mechanisms to minimise risks.
My advice for anyone embarking on digital transformation is that the efforts in adopting digital technologies should also consider ways to fight cyber crimes and build responsive systems to prevent any technical hitches including data losses to ensure smooth operations of the business. There should be a very robust training program for the team to understand the processes and desired goals.
Nuzulack Dausen is the CEO of Nukta Africa, a digital media and technology company specialised in research of emerging journalism and communication practices, media training and production of digital and data-driven content. He is a senior journalist specialising in covering business, economics, technology and data. These are his own views and may not necessarily reflect Nukta Habari position.
