Main Drivers of Digital Transformation in the Caribbean
The past year has been full of change. Health concerns, economic turmoil, political unrest in
certain parts of the world and revamping of global supply chains are just a few of the changes that we have had to adjust to in 2021.
Looking forward to 2022, there are a number of predictions and trends that should inform
your digital transformation initiatives.
Whether you are embarking on an ERP implementation, CRM or HCM software initiative, supply chain transformation, or some other digital or business transformation, these are the top trends that you should be aware of in 2021 and beyond.
The Caribbean has very low banking penetration compared to other markets and regions. The free flow of money is always a driver of innovation and economic growth. We see a lot of young fintech players entering the market.
There are also signs of skipping the traditional banking system jumping directly to a mobile, decentralized money system, based on blockchain technology.
We see similar developments in some African countries where mobile payment solutions are on the rise.
The availability of digital payment solutions and the acceptance by the end consumer is a prerequisite for digital transformations to drive relevant economic growth.
Direct to Consumer
Unless you’ve avoided the internet for the better part of five years, you’ll likely have noticed a growing trend: direct-to-consumer commerce.
The process of selling directly to the end consumer, cutting marketplaces, retailers, and wholesalers out of the customer sales journey.
The growth of the DTC industry isn’t set to die down anytime soon. Data shows e-commerce is expected to account for 6.6% of all consumer packaged good (CPG) sales. The DTC movement accounts for 40% of the sales growth in the sector.
With the advent of Covid-19, end consumers in many countries showed increased use of e-commerce solutions, often to fit basic daily product needs.
And although we see a substantial increase in e-commerce solutions all over the Caribbean, most organizations still don’t have e-commerce on their strategic roadmap.
Supply Chain Management
Supply chain management has proven to be invaluable in today’s environment. Covid-19 exposed the vulnerabilities and rigidity of many supply chains that supported them.
And now it has become clear that supply chain transformations of the future need to look a lot different than they did in the past. Supply Chain Management (SCM) systems are now
top of mind for many organizations.
Cybersecurity & Data Protection
With the progressing digital transformation in many areas of society, cybersecurity, privacy, and data protection will become more important.
Disparate workforces and cloud systems lead to more risk of potential cybersecurity breaches, making cybersecurity more important than ever.
Not only do potential outside hackers have more access points to target, but the risk of internal security breaches is higher as well. Organizations will need to tighten the security of their systems and data in order to effectively manage remote workforces and teams of the future.
Customers’ expectations, preferences, changing patterns in how and why they purchase need to be the core of any digital transformation effort. With it, digital transformation projects flourish and take on a life of their own.
Till now, many companies have defined themselves by the products they make or the services they offer, while not so much by the problems they solve for their customers.
Customer-Centric Transformation involves new strategies, processes, and technology – from marketing and sales to pricing, distribution, and services.
Our experience shows, however, that technology is not enough: the magic of your customer-centric approach only unfolds if you get the mix of business change and people engagement right so that the technology will be embraced by your people to make a difference. Real transformation happens when technology, business, and people unite to create a better experience for everybody.
ERP systems and other enterprise technologies were already rapidly moving from
on-premise to the cloud, but this trend will accelerate in the coming years. With
more remote workers, globally dispersed supply chains, and data distributed among
multiple systems, cloud ERP systems are becoming a necessity.
Word of warning:
many enterprise technology solutions are still making the transition to the cloud,
so be sure to thoroughly evaluate and understand the gaps before committing to a
A functional digital ecosystem is fundamental to accelerating the benefits of digital technologies.
The Digital Ecosystem Development Index of the OECD is based on eight multi-component pillars: infrastructure, connectivity, household digitalization, digitalization of production, competitive intensity, digital industries, factors of production, and regulatory frameworks.
Blockchain as underlying technology will be the base for many technologies that will evolve over the next years in the Caribbean.
With the advent of Cryptocurrencies in the mind of the public, it is more than likely that the financial sector will adopt some of these technologies first.
A lot of the progress will depend on the regulatory environment and the support of the public sector and government agencies.
Artificial intelligence (AI) is the most prioritized emerging technology. More possibilities are opening up all the time, from diagnostics to self-driving vehicles.
However, AI is a broad and complex arena, underlining the importance of clear strategic targeting to make the most of the potential within your particular business and avoid competing priorities.
Conclusion and Key Takeaways for Caribbean Companies
1: Create a clear definition of digital that recognizes that success is as much about an innovative mindset and workforce capabilities as systems alone.
2: Develop digitally savvy leaders who lead from the front rather than delegating and are prepared to take risks in support of transformation.
3: Encourage progress on developing and applying digital skills – not just among a few specialists or creatives, but the workforce as a whole.
4: Start collecting timely, relevant, and consistent data to drive effective decision-making, innovation, and differentiation.
FLEXIBILITY WILL BECOME KEY
The year 2020 taught us that the future can be impossible to accurately predict. Supply chains required massive overhauls, entire workforces migrated to a remote model, and many employees were furloughed or terminated – and all of this happened in an extremely short period of time.
Rigid and inflexible systems of the past won’t cut it in 2021 and beyond, so be sure to implement digital transformation solutions and organizational competencies that provide the flexibility to change your business model as it evolves.
DIGITAL TRANSFORMATION STRATEGY WILL BE A DIFFERENTIATOR
With the unprecedented magnitude of change and plethora of technology options available, organizations need to define custom digital transformation strategies that best align with their overarching strategy and objective.
A good digital strategy should clearly define the people, process, and technology aspects of change. Rather than myopically focusing on selecting and implementing a single enterprise technology (such as one of the top ERP or CRM systems), more effective digital strategies provide a clear roadmap for broader transformation.
CHANGE MANAGEMENT WILL BE MORE IMPORTANT THAN EVER
As we speak, employees are experiencing change fatigue. The past year has been full of tectonic changes, so while it may be tempting to assume that your employees are used to change – and therefore willing and able to change – it is important to recognize that change management is more important now than it ever has been.
Transformations of today are more likely to result in more material operational and organizational changes, which underscores the importance of organizational change management.
At the end of the day, the best systems for your organization will largely be dependent on your company size, industry, and strategic goals.
This is where independent consultants such as Küpper Consulting can help.
We help the Caribbean’s leading organizations define their digital strategy, select the right software, prepare for implementation, provide implementation quality assurance, and manage organizational change.
I hope the findings of this article provide a clear blueprint for how you can make your digital transformation successful.
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