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Digital transformation is crucial for African organizations to remain competitive in the global marketplace. However, it is not without its dilemmas.
The role of Chief Information Officers (CIOs) is vital in the digital age, as they lead their organizations’ digital transformation journeys. However, CIOs in Africa face unique challenges that can hinder their efforts to drive change and innovation.
According to Evans Munyuki, Former CIO of African banking group, Absa, “One of the biggest challenges in Africa is the availability of the right talent to drive digital transformation. There is a serious skills gap in the continent that needs to be addressed.”
He adds that “Another challenge is the lack of infrastructure, which means that implementing certain digital solutions can be challenging.”
Despite these challenges, CIOs in Africa navigate the complex digital landscape and drive transformation within their organizations. By using innovative technologies and collaborating with stakeholders, they are paving the way for a digital future.
12 CIO Digital Transformation Challenges in Africa
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According to the CIO Africa, McKinsey Africa, and Deloitte Africa; the thought leaders for the digital transformation movement in Africa. The following are some of the reasons CIOs delay digitization efforts:
- Lack of resources
African organizations often lack the resources necessary to implement digital transformation initiatives. According to McKinsey Africa, 60% of African CIOs cite a lack of financial resources as a major barrier to digital transformation.
African organizations can explore alternative financing options, such as crowdfunding or public-private partnerships. McKinsey Africa recommends that African governments invest in digital infrastructure to enable digital transformation initiatives.
- Legacy systems
Many African organizations still rely on legacy systems that are difficult to integrate with new digital technologies. CIO Africa reports that legacy systems are the biggest obstacle to digital transformation in African organizations.
Organizations can gradually migrate to new digital technologies, rather than trying to replace their entire IT infrastructure at once. They can also explore options for integrating legacy systems with modern technologies, such as APIs (Application Programming Interfaces).
- Cybersecurity threats
Cybersecurity threats are a major concern for African organizations. According to Deloitte Africa, 89% of African organizations experienced a cyber incident in the past year.
According to a recent Cloud and Security Summit by CIO Africa, there are only 10,000 cybersecurity professions on the continent. A limited number that cannot cater to the demand.
Implementing robust cybersecurity measures, such as firewalls, encryption, and multi-factor authentication, to mitigate cybersecurity threats. Deloitte Africa recommends that African organizations adopt a risk-based approach to cybersecurity, focusing on the most critical assets.
- Lack of digital skills
African organizations often lack the necessary digital skills to implement digital transformation initiatives. According to McKinsey Africa, 64% of African CIOs cite a lack of digital skills as a major barrier to digital transformation.
For instance, to get a local expert for outdated versions of core banking systems is impossible.
Organizations should train and upskill their employees to fill the talent gap. They can also partner with universities and training institutions to develop talent pipelines for digital roles.
McKinsey Africa recommends that African governments invest in education and training programs to develop the digital skills of their citizens.
- Inadequate infrastructure
Many African countries lack adequate infrastructure to support digital transformation initiatives. CIO Africa reports that inadequate infrastructure is a major challenge for African CIOs.
Outdated servers and data centers cannot support new-age technologies. The level of agility and data needed in digital transformation demands infrastructure that can effortlessly support it.
To address inadequate infrastructure, African governments and private sector stakeholders can invest in building digital infrastructure, such as broadband networks and data centers. They can also explore innovative solutions, such as satellite-based internet connectivity.
- Resistance to change
Resistance to change is a common challenge in African organizations. McKinsey Africa reports that resistance to change is a major barrier to digital transformation, cited by 44% of African CIOs.
The false reassurance that’s “if it isn’t broken, don’t fix it” will not suffice in digital transformation. Resistance to change may have worked in the past but not anymore.
Digitization should include the people and mindset not just the technologies. The utility of these technologies depends on the staff.
Hence, involve employees in the digital transformation process and communicate the benefits of digital technologies. It also incentivizes employees to embrace digital transformation by linking it to performance metrics or career development opportunities.
- Limited budgets
African organizations often have limited budgets to invest in digital transformation initiatives. According to Deloitte Africa, 60% of African organizations have a digital budget of less than $500,000.
Digital transformation initiatives that have the highest potential for return on investment should take priority. Organizations can also explore options for cost-sharing or collaboration with other organizations.
Deloitte Africa recommends that African organizations adopt a risk-based approach to digital transformation, focusing on the most critical areas first such as customer facing processes.
- Regulatory challenges
Regulatory challenges can make it difficult for African organizations to implement digital transformation initiatives. CIO Africa reports that regulatory challenges are a major obstacle to digital transformation in African organizations.
Clear and consistent regulatory frameworks for digital technologies would alleviate this challenge. Organizations can also directly contribute to and engage with industry stakeholders to ensure that regulations are relevant and effective.
- Data privacy concerns
Data privacy concerns are a growing issue in African organizations. Deloitte Africa reports that 78% of African organizations are concerned about data privacy.
Robust data privacy policies and procedures, such as data encryption, access controls, and regular audits are underdeveloped on the continent. Better yet countries can draw inspiration from international data privacy standards, such as the EU’s General Data Protection Regulation (GDPR).
- Lack of leadership support
African organizations often lack leadership support for digital transformation initiatives. McKinsey Africa reports that lack of leadership support is a major barrier to digital transformation, cited by 42% of African CIOs.
Senior executives should take part in the digital transformation process and ensure that they understand the strategic importance of digital technologies. Also, there should be a dedicated digital transformation leader to champion digital initiatives.
Digital transformation should be a top-down initiative and not the other way around.
- Vendor lock-in
African organizations may be locked into contracts with vendors that limit their ability to implement new digital technologies. CIO Africa reports that vendor lock-in is a major obstacle to digital transformation in African organizations.
Organizations can negotiate contracts that allow for flexibility and interoperability with other systems. They can also explore options for open-source software and cloud-based services that do not require long-term contracts.
- Lack of collaboration
Collaboration between different departments and stakeholders is necessary for successful digital transformation initiatives. According to McKinsey Africa, 46% of African CIOs cite a lack of collaboration as a major barrier to digital transformation.
Cross-functional teams that involve stakeholders from different departments and levels of the organization boost digitization. In addition, collaborating with third-party solution providers with less bureaucracy to develop and launch projects.
References
10 New-Age Strategies for Digitization Success
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These technologies are not a one-size-fits-all solution, and it is important for CIOs to carefully evaluate which technologies are best suited to their specific challenges and organizational goals.
They should also consider factors such as the availability of talent and the regulatory environment when implementing these technologies.
Additionally, embracing open-source technology options will save organizations a great deal of time.
- Cloud Computing
By moving resources to the cloud, organizations can enjoy greater scalability, flexibility, and cost savings. Cloud computing also enables remote collaboration. It can only work if there is a strategy around cloud migration.
Cloud infrastructure can help reduce the burden of maintaining and regularly upgrading outdated and unpatched on-premises hardware. Its flexibility and scalability allow businesses to quickly and easily add or remove resources as needed, without changing all the underlying technology.
Additionally monitoring your cloud can offer greater data security and faster disaster recovery options.
- Digitizing Data Centers
By digitizing data centers, organizations can make their data more accessible, secure, and reliable. This improves decision-making and drives innovation, while reducing the risk of data loss or downtime.
Moreover, it streamlines their operations and reduces hardware costs. By moving data storage and processing to a hybrid cloud, businesses eliminate physical data centers.
Digitization also improves availability of data, security, and performance of systems. Any delay in performance is easily found and resolved.
- Micro-services Middleware
Micro-services architecture breaks down applications into smaller, more modular services. As a result, organizations improve agility, scalability, and resilience. Microservices also accelerate innovation and reduce the risk of application failures, unlike older systems like the ESB (Enterprise Service Bus).
Businesses develop and deploy applications quickly and efficiently. Microservices allow developers to make changes and updates without system downtimes.
- Roadmapping
Developing a roadmap for technology implementation ensures strategic use of resources. Roadmapping also helps align technology with business goals, predict risks and challenges, and optimize long-term success.
Also, businesses with fewer resources get to prioritize their technology initiatives.
- Private and Hybrid Cloud
Combining the benefits of public cloud and on-premises infrastructure, offers flexibility, security, and control. Private and hybrid cloud solutions also address regulatory requirements or other unique business needs.
Businesses can customize their infrastructure; they choose which processes move to either private or public clouds. Private clouds offer security and control, while hybrid clouds can provide the best of both worlds.
Businesses can run workloads in both public and private clouds.
- Involvement in Policy Making
Participating in policy making and regulation development helps organizations shape the technology landscape and ensure that their interests are represented. This also helps to mitigate risk and promote innovation.
Businesses get a chance to advocate for their interests and influence their industry policies. Engaging with policymakers also provides businesses insights into upcoming regulations and compliance requirements.
- Collaboration with FinTech Consultants
Seeking experts’ guidance before technology investments, avoids costly mistakes and ensures that organizations are making the best use of their resources. Consulting can help to identify opportunities, expect challenges, and suggest best-practices.
Consulting with technology experts ensures alignment with business goals.
- Open-Source
Leveraging open-source software, reduces costs, improves agility, and taps into a global community of developers and users. Open-source technology promotes innovation and avoids vendor lock-in.
Businesses have access to cost-effective and customizable technology solutions. Open-source communities also offer a wealth of resources and support for businesses to use.
9. Managed services
Managed services provide businesses with proactive and comprehensive technological support, including monitoring, maintenance, and troubleshooting. In the end, businesses reduce downtime and focus on their core operations.
10. Outsourcing Talent
Leveraging external expertise and resources improves efficiency, reduces costs, and accelerates innovation. Outsourcing fills talent gaps and supplies specialized skills and knowledge.
It is beneficial for small businesses and those with limited IT resources. They can outsource software developers, digital project managers, cybersecurity specialists, quality assurance engineers, and many more.
How We Can Help
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Building relationships with FinTechs allows you to leverage their expertise in order to create tailored, cost-effective solutions for your organization.
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References
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Global access to education, improved diversity in the tech space and access to information over the internet has doubled in the past decade. However, the tech talent deficit is at its highest recorded rate in recent years.
The “battle” for the best talent came to play in the African Continent in 2022. It made headlines when Microsoft and Google set up shop on the continent, and the local tech players were losing their best talent to these global behemoths.
There are so many intersections in this reality. Sometimes it does seem like a paradox, to have so much progress in tech training and access to skills and yet have very few resources in the pipeline.
The question that often arises is where is the disconnect? What is the “on-ground” reality of tech industry experts on the continent. We would have assumed that the efforts made to make Africa a player in the global tech space would bear fruit by now.
This article will highlight some of the myths, misconceptions and realities of this sought-after space.
The Struggle of Recruiting African Tech Talent
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Although there are over 716,000 competent developers across the continent, recruiting from this talent pool is no easy feat. Especially, since most of this future work force is young and does not share older workplace cultures. They are more informed and certainly have more options.
They expect the best treatment and appreciate a “socially conscious” workplace. They speak up more against discrimination and unethical industry practices. They are also concentrated in a few countries like Kenya, Nigeria, SouthAfrica, Morocco and Senegal.
Listed below are 8 specific reasons that make it challenging for organizations to hire African Talent. These reasons vary from country to country on the continent. They include:
- Lack of Diversity and Inclusion Efforts
Organizations that do not prioritize diversity and inclusion efforts may struggle to attract and keep African tech talent.
Candidates may perceive a lack of cultural fit or opportunities for growth and development within the organization. This is a common occurrence in companies from homogenous societies that haven’t made efforts in inclusive diversity.
- Limited Network
Many organizations struggle to build a network of African tech talent due to a lack of connections or partnerships with universities, professional associations, or networking groups.
There are different pan-African talent platforms such as Gebeya Inc, Ethiopia. But many organizations do not use these platforms, or don’t make an active effort to nurture the on-ground talent, instead opting to fight for the experts.
- Language Barriers
Language barriers can make it difficult for organizations to connect with African tech talent. Candidates may not be fluent in English, which is the primary language used in many organizations.
For example, a French-speaking Senegalese will miss a job opportunity in South Africa. Why? Because he /she does not speak English, and vice versa.
- Limited Access to Resources
African tech talent may not have access to the same resources as their counterparts in other regions. This can include access to training, mentorship, and funding.
Aside from the global disparity of access to technology. Within the continent itself, investment in technology training occurs through government initiative.
If the country’s government does not have economic influence to attract such investment its technical talent will be both scarce and limited.
- Lack of visibility
Many African tech talent may not have a strong online presence, making it difficult for organizations to find and connect with them.
Creating a brand as a young person, which is what most African talent tends to be needs guidance. Unless a talent has the ambition to connect with the top organizations, they’re likely to miss out.
- Limited Local Job Opportunities
Many African tech talent may choose to leave their home countries in search of job opportunities, which can make it difficult for organizations to find and hire local talent.
Most local tech companies compete with global firms to offer competitive salaries and benefit packages. The current tech talent wants the best working conditions and compensation.
If an organization does not fulfil this need, they lose out on the best talent to other countries such as Germany and the UK.
- Unfavorable Political or Economic Conditions
Unfavorable political or economic conditions in some African countries can make it difficult for organizations to attract and keep talent.
Organizations must endure political instability in various regions across the continent. Despite global and local efforts to sustainable peace, civil wars displace people making them unavailable for work in local firms.
- Visa and Immigration Barriers
Visa and immigration barriers can make it difficult for African tech talent to work in other countries. This can limit the pool of candidates for organizations looking to hire talent from Africa.
In a recent AU report found that Africans can travel without a visa to just 22% of other African countries. This affects the hiring process of organizations.
For example, a senior solution architect in Gambia might have a tough time reporting physically for a job in Egypt.
The Paradox of Mass Tech Layoffs and Demand for African Talent
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Imagine the number of ongoing tech layoffs, doesn’t it seem that techies are out of opportunity? However, they have had a mixed impact on the demand for African tech talent.
- Financially Struggling Companies are Firing
On one hand, companies struggling financially reduce their hiring, which leads to a decrease in demand for tech talent in general, including African tech talent.
However, the impact of the ongoing tech layoffs on African tech talent is not limited to the demand for talent. Layoffs and reduced hiring may also lead to increased competition for available jobs. This scarcity will make it more difficult for African tech talent to secure employment.
- Growing Companies are Hiring
On the other hand, some companies are still growing and need to fill key positions with talented individuals, regardless of where they are from.
A recent report by Quartz Africa shows that while some tech companies in Africa have experienced layoffs, others are still expanding and hiring.
For example, The Pan-African platform “Gebeya” which translates to “marketplace” in Amharic continues to churn out talent through the Coding academy and offering a platform to find work.
Despite the pandemic-induced economic downturn they have remained a talent accelerator that trains and outsources African software developers to local firms.
Moreover, the report highlights that the pandemic accelerated digital transformation and the adoption of technology. This trend created new opportunities for African tech talent.
As more companies embrace remote work and digital solutions, they are more willing to hire experts from anywhere in the world, including Africa.
Additionally, the report cites data from the International Data Corporation (IDC) that predicts a compound annual growth rate of 11.2% in the African IT market from 2020 to 2024, creating significant job opportunities for African tech talent.
Despite ongoing tech layoffs having some impact on the demand for African tech talent, the overall picture is more nuanced. Some startups are still expanding and hiring, while the tech giants may be reducing their workforce.
Nonetheless, the growth of the African IT market and the increasing adoption of technology suggest that there will continue to be significant opportunities for African tech talent in the years to come.
References:
“What Covid-19 layoffs mean for Africa’s tech talent”, Quartz Africa, 2020.
Do African Digital Nomads Add to The Difficulty of Hiring African Talent?
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Digital Nomads amplify the gap in the African tech market. However, African developers have incentives to move to countries like Germany which has the largest concentration of Developers at 901,000.
The following realities of digital nomads adds to the hiring challenge on the continent:
- Limited Online Presence
Tech experts don’t declare their employment status online. Because they have more than one job engagement. This can make it harder for recruiters to reach out to them and offer job opportunities.
- Preference for Flexible Employment
Techies have unique employment preferences and expectations that differ from traditional employees. For instance, they prefer freelance or project-based work that allows them to support their nomadic lifestyle.
This can create challenges for companies looking to keep talented individuals on-site.
- Preference for Foreign Firms in the Tech Talent War
Digital nomads prefer to work remotely for companies based outside of Africa. It also makes it more challenging for local companies to compete for talent with international firms that can offer more competitive compensation and benefits packages.
According to the stats, 38% of the 1,600 developers surveyed work for at least one company headquartered outside Africa. Some developers revealed that they learned to code solely to get international prospects.
- Lack of Investment in the Local Market
Lack of commitment by African developers to the African tech market amplifies existing skills gap. The lack of investment by companies also prevents development of home-grown talent.
It also reduces the mentoring opportunities available to the home-grown tech pool. For example, most of African techies working with international companies have an average of six years of experience, while those with fewer years get into local companies.
The good news is the African Tech market has taken off in the past 5 years and it is the end of the beginning. Most of the digital nomads who left the continent are eager to come back. Their emigration might speed up local talent development and tech pipeline.
References:
The Indicators of Tech Talent Gap in Africa
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There is limited data available on the number of tech experts in Africa, but there are several indicators that suggest that there is indeed a shortage of such experts on the continent.
According to a report by the African Development Bank, Africa has a shortage of skilled professionals, particularly in the technology sector. The report states that the continent needs an added 4.5 million engineers, technicians, and other skilled workers by 2025 to meet the demands of its growing economies.
Similarly, a report by the World Economic Forum (WEF) shows that the shortage of skilled talent is a significant challenge for the technology sector in Africa. The report notes that “a lack of digital skills is a major barrier to the adoption of technology in Africa.” Also, the shortage of skilled talent is among the key reasons for the continent’s low levels of technological development.
Another report by the International Finance Corporation (IFC) highlights the need for increased investment in digital skills training and education in Africa. The report notes that Africa has made progress in expanding access to digital technologies. However, there is a need to develop local talent and ability to fully use these technologies’ potential.
Additionally, a survey by the African Business magazine found that 40% of African CEOs cite a lack of skilled talent as a major challenge to doing business on the continent. The survey highlights the difficulty that companies face in finding qualified personnel with the necessary technical skills and ability.
Overall, these reports and surveys suggest that there is indeed a shortage of tech experts on the African continent. Addressing this shortage will be critical to the development and growth of the continent’s technology sector.
How True is the Claim “Africans Develop the World, not Home”
The competition from global behemoths like Google and Microsoft affects the hiring of African tech talent for local companies. These global companies often have more resources and competitive compensation.
Local companies can hardly compete for the same pool of talent. According to a report by the Center for Global Development, developers work in local startups to gear up for more developed countries or to work for multinational companies.
The report notes the negative impact on local companies, as they struggle to attract and keep skilled workers.
Potential employees value security and aspire to work in reputable and established firms. Global companies often satisfy this dream because they’ve proven reputations and brand recognition.
There are opportunities for local companies to compete for talent with global behemoths. If local companies focus on supplying supportive work environments, opportunities for growth and development, and competitive localized benefits.
In addition, they can seek out talent from local universities and invest in training and development programs to create a pipeline of talent.
References
Our Recommendation to Have a Continuous Flow of Talent
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To build a successful team, you need to approach the hiring process systematically and evidence based. Creating a people-hiring machine with clear goals and measurable outcomes will ensure that your team continues to evolve and improve.
Traditionally, companies review resumes, ask semi-random questions, and rely on consensus to make hiring decisions. However, each step of the process should be purposeful and systematic. Take the time to review vetting tests across the world and emulate your preferred choice.
Of course, the human element is still critical in the hiring process. Personal values are crucial factors that cannot be fully measured by data. However, even subjective interpretations can be objectively measured through the recruiters’ record of accomplishment.
Remember, building a successful team is an ongoing process that requires continual evaluation and improvement. By taking a more systematic, flexible and evidence-based approach to hiring, you’ll create a hiring process that evolves to meet the needs of your organization.
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