6 Reasons from an SME perspective why we need to hurry-up to maximise the benefit from digitalisation

 

If I had to ask you about your three best experiences ever, I bet at least one of them would have involved travelling with family or friends, right?  Humans need to explore. It is in our DNA.  From the earliest days of leaving the great rift valley, we have travelled around the world. Continuously seeking to find out what is beyond the next hill. Sadly, 2020 has us locked-up.  For months we could not travel, we could not congregate, we could not celebrate.  Tourism was hit hard.

Fortunately among Einstein’s famous quotes, we find this advice: “In the midst of every crisis, lies great opportunity.”

Regardless of Covid, globally the tourism industry was already waking up to the need to drive digitalisation.  2020 is just a proverbial kick-up-the-backside. We explore 6 reasons why SMEs need governments, industry representatives and innovators to hurry-up with the digitalisation efforts in Africa.

First, we look at

  • the guest’s journey
  • then we explore 6 opportunities for SMEs
  • and finish with a high-level approach to making progress

1. The Guest’s Journey

In the good old days tourism was very much an analog process.  We excitedly learned about extraordinary destinations through word-of-mouth exaltations by contacts that came back from trips. Else, we dreamily paged through travel magazines or visited a tourism bureau or tour operator to view options and plans. Each step was somewhat disconnected and certainly not in the hands of the SME to directly engage with their potential guest. Without a little pamphlet in hand, you would never know about that idyllic location on lake Kariba or the village linking its roots back to Mapungubwe, or the shallow waters to enjoy at Vilankulos.

In today’s world, the connected traveller is exploring the complete value chain digitally, including sharing their experiences in real-time on social media.

The journey might start with visiting a website, utilising scheduling platforms to plan and then confirm bookings. Next, the trip itself (still supported by digital media). The traveller wants access to maps, information and even connecting wearable devices to contribute to the experience. Then the guest will rate the experience and post on social media. It better be good feedback!

For this value chain to work optimally, the tourism service providers and their guests need access to the internet. Connectivity needs to be cost-effective and pain-free. Does your Africa destination offer the total package? Or will the guest go where they know they will remain connected? Did you even realise this connectivity provides travellers with a sense of safety, immediately improving the rating of your service, all things equal?

Strangely, places like Norway, Finland and Sweden are leading the way with the connected approach. The last time I looked, those places are properly cold and cannot offer the Africa experience of our incredible fauna and flora.

We need to hurry up or risk to be forgotten.

2. Customer Acquisition

The SME needs access to their potential guests.  The storytelling must begin on-line, engaging the tourist long before he/she is committing to the transaction. A website is not good enough. The SME needs to link to platforms, tourism integrators, deal programmes as well as connect with associate services providers in order to give a total perspective.

For this to be effective, including cost efficiency, they need training, support and access to local resources that will help build a professional digital presence.

3. Enhanced Online Brand Visibility

Tourism is after all not only about the destination, but also the journey and the various elements that make up the journey.  Transport, baggage handling, insurance, medical services, connected experiences, and all other services also need digital visibility for the prospective guest to engage effectively. Difficult for an SME? You bet. Therefore there is a pressing need for digital collaboration, partner networks and transparency in transactions to support the sustainability of tourism SMEs throughout Africa.

Fortunately, social media is a cost-effective way for SMEs to get started, but the time and cost of properly managing a social media site might still be prohibitive for most where skills and internet access continue to be constraints.

4. Expand International Reach

Digital presence allows any African destination to be on the screens of the 4.6 billion connected people in this world. UNWTO estimates 1.4b international travellers annually, with the vast majority coming out of the pool of connected people.  Are you reaching these travellers and can you keep them connected while they are visiting?

Without a proper presence, managing data, respecting the digital rights of digital tourists (think GDPR) and working hard at SEO and platform integration, the SME will remain lost in the digital frenzy.

For the international traveller, the digital experience must be as tranquil as the destination itself. When they get there, they want to communicate and transact in their own language, receive your story in their own language and completely feel welcome and safe in this strange new environment. How are you using digitalisation to break down these barriers for foreigners visiting your land?

5. Improve Service Quality

While digitalisation is a necessity for direct engagement with tourists, there are also many things that happen in the background that should assist the service provider to improve the customer experience.

For example, digital asset management of facilities can improve operations, maintain infrastructure and improve coordination of resources thereby reducing cost of operations. Various productivity systems, connected devices such as wearables monitoring heart rate, counting steps, etc can assess employee wellness. After all, the tourists want friendly, engaging and fresh-looking hosts to enhance their experience! Moreover, contactless transacting is now one of the primary needs of anyone engaged in commerce. Are you respecting the social space of your guest?

Then, once quality data becomes available, analytics will give further opportunity for the operator to improve their service quality, while unlocking options to reduce costs.

6. Increase Guest Satisfaction

Connected systems increase options to guests that extend into value-adding experiences and on-selling of products and services. Imagine you are in Livingstone and you have learned about a historical site 3hrs away, and worth visiting. Do you have easy access to travel options? Is it safe? How many reviews are available? Can you schedule and pay on-line? What about souvenirs? Do you even need cash?

The connected traveller does not want to engage in cash transactions. They want to use e-wallets, digital payments and cryptocurrency.

7. New Business Models to Connect Ecosystems

The likes of Uber, AirBNB and Booking.com have shown that old thinking will be disrupted with digitalisation, having unlocked unique new business models. This can be replicated at micro level with services, connected value chains and on-selling opportunities ensuring the traveller is “captured” in the ecosystem, engaging various services while giving positive feedback regarding their experiences.

It is therefore as important for the service providers to be connected, and having their service offerings, systems and transaction platforms integrated to connect and contain their ecosystem.

8. Getting it Done

The challenge in Africa is two-fold:

  • Digital Infrastructure
  • Digital Skills

While I can first hand attest to many wonderful tour experiences in Africa, with warm and friendly guest services, I also know that connectivity continues to be a major frustration, even in some of the larger cities.  Once you are remote, it becomes problematic if you need anything more than mobile and SMS.

Governments and industries need to urgently work together to accelerate the roll-out and driving down the cost of internet connectivity. It is the no.1 enabler of commerce, which will drive economic development, and creating jobs.

Developing digital skills is the other priority for communities throughout Africa.  Stakeholder industries, such as retail, transport and even mining and energy companies, can play a big role to accelerate this enablement and allow their communities to promote and protect their environment and manage sustainability through digital tourism.

One should start by grouping and integrating the systems and processes to be digitalised.  Focus could be a combination of attending to the tourism workforce, building connected systems, developing enhanced digital experience integration, and/or connecting markets through digital transaction platforms.

Once you have covered the basics, you will learn what works before this is scaled across clusters and regions.

Take care of complex technologies. Ensure that the foundations are in place and that value can be extracted from the data at every layer built, then consolidated and made accessible for commercialisation.  It will take time before you will get full value from technologies such as blockchain, augmented reality and artificial intelligence, yet you need to evaluate and build awareness and purpose with these into your digital transformation strategy. Else, you will do things that will not help you down the line. You might develop behaviours, systems and platforms that do not connect easily or will require extensive resources to later migrate into bigger ecosystems. Start with the future in mind…

“We can see that digitalisation is not the mere act of deploying software, infrastructure or artificial intelligence. Rather, it is the strategic approach to strengthen networks, connect supply chains and have future customers engaged long before and after they visit our land.  The goal is to have your destination or experience top-of-heart.

As Africans, we must work together to ensure that we benefit from the great enablers brought by digitalisation through this 4th industrial revolution. At last, let us take our natural resources into our own hands, manage transparency and show the world what we have to offer.

The tourism industry is well advised to take a holistic approach to digitalisation.”

 

Johan Louw is the founder of Aguru Business Solutions.  We empower clients with differentiating strategies to plan and deliver automation and digitalisation solutions that drive efficiencies and improve asset value.  

 

Aguru Business Solutions

www.aguru.co.za

https://www.linkedin.com/company/aguru-business-solutions/

https://www.linkedin.com/in/johanlouw/

info@aguru.co.za

 

 

 

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