Digital transformation in Africa is more than just adopting new technologies but harnessing the power of digital tools to reshape business models, modernize operations, and create value-added services.
From Nairobi’s bustling tech startups to Johannesburg’s thriving financial sector, digital transformation is driving growth and opportunities across the continent.
However, the journey towards digital transformation is not without its challenges. Issues such as infrastructure, digital literacy, and data security are significant hurdles that businesses must navigate.
On this topic, we reached out to Veerakumar Natrajan – Country Manager, Zoho Corporation to delve deeper into some of the challenges and the innovative solutions they are employing to chart a path towards a digitally empowered future.
1. Digital Transformation: Could you share your insights on the current state of digital transformation in Kenya, and how it compares to other African countries?
Two major things happened in the past few years. Firstly, we saw the launch of The Kenya National Digital Master Plan 2022-2032, which clearly states the reforms to be undertaken and the roadmap for digital transformation of the economy.
Secondly, Kenya’s tax collection system was digitalised for smoother processes, by modernising Kenya Revenue Authority’s (KRA) operations such as mapping everything from import and manufacturing till consumption through eTIMS (electronic Tax Invoice Management System).
While the Master Plan’s focus is to reform government entities and enhance infrastructure like fibre connectivity and local cloud, the second agenda by KRA focuses more on enabling SMEs and enterprises to adopt technology to streamline their business operations and increase productivity. If we are on the right track like this, we can speed up national progress and soon reach the level of peers like South Africa.
2. Impact on Businesses: How has digital transformation impacted businesses, particularly in terms of operational efficiency and customer engagement?
Given that digital transformation has gained traction in Kenya only recently, we are yet to see the full impact of it on businesses. Today, we’re seeing MSMEs becoming open to moving to the cloud to maintain their bookkeeping processes and streamlining their other business operations.
Parastatals and local governments are also leaning towards digitalising their activities with cloud-based tools. Meanwhile, the active push by the government for digital advancements has also had an effect on the business landscape; we can see traditional companies in the retail space, for instance, deliver better customer services today using technology.
3. Challenges and Opportunities: What are some of the unique challenges and opportunities that businesses face when undergoing digital transformation?
Digital transformation is typically a long-term journey that involves an organisation- or department-wide change that requires vision and commitment. It is not a quick fix where only certain workflows or processes are digitalised. Unfortunately, this seems to be the approach that enterprises—small, medium and large— take in Africa, and more so in Kenya. Aside from this lack of understanding, other challenges include cost, user acceptance, and inadequacies in vendor support.
This is why Zoho opened a local office in Nairobi last year to serve its customers better. We understand the importance of being available on-ground to ensure our customers get the quickest service in all ways possible during their digital transformation journeys. In addition to our office in Nairobi, we have a local support team, and Zoho’s products are available in the local currency.
4. Future Outlook: Looking ahead, how do you see digital transformation shaping the future of businesses in Africa? Are there any specific trends or technologies that you believe will play a key role?
In the next decade or so, we can expect to see the real impact of digital transformation initiatives in Kenya, i.e., hyper-efficient businesses, intuitive customer experiences, productive workplaces, smart cities, nations, etc.
As much as AI and other related technologies are hot topics, our focus needs to be more on educating the users and organisations on the benefits of transforming organically at their own pace and not going for quick fixes. For instance, only 1% of the registered taxpayers have been onboarded on eTIMS. This shows the necessity of building awareness and educating users about the advantages of leveraging such digital initiatives.