Leveraging Technology for Resilience
Resilience is the ability to adapt, recover, and thrive in the face of challenges. In cooperative societies, resilience involves maintaining member trust, adapting to economic fluctuations, combating fraud, responding to changing member expectations, and addressing regulatory and technological challenges.
Resilience plays a crucial role in the overall development of Savings and Credit Cooperative Organizations (SACCOs). Why a A resilient SACCO fosters trust, ensuring that members feel secure about their savings and financial support. By maintaining resilience, SACCOs can continue to provide affordable financial services to underserved communities. They are also better positioned to quickly adapt to regulatory changes and technological advancements, helping them stay competitive. This resilience is essential for navigating fraud, system failures, and economic challenges without disrupting operations.
Leveraging technology to enhance resilience means strategically adopting and integrating digital tools, platforms, and systems to strengthen an organization’s ability to withstand, adapt to, and thrive amidst disruptions. Mr. William Makatiani, CEO, Serianu Limited, explained during the SACCO Leaders workshop held in Mombasa last year that this involves using technology to improve preparedness, ensure continuity, adapt to change, and safeguard assets and trust.
This approach also includes employing digital technology to strengthen risk management, enhance member engagement, and drive efficiency and innovation. Utilizing digital technology in SACCOs facilitates regulatory compliance, enables scalability, and supports data-driven decision-making.
According to Mr. Makatiani, digital transformation is an ongoing process of reimagining your business around digital solutions. It involves deploying new digital products and services to meet evolving customer preferences and capitalize on business opportunities.
Leveraging technology in SACCOs consists of two interrelated but distinct aspects of the digital landscape: digitization and digital optimization. Digitization refers to the conversion of analog processes to digital forms, also known as digital enablement. In simpler terms, digitization transforms traditional processes into digital formats without altering their fundamental nature.
In contrast, digital optimization involves using digital technology to improve existing operational processes and business models.
Business Process Transformation
Process transformation involves changing and automating some aspects of business processes. This can include providing customers with more self-service options to address issues and manage returns, using automation to streamline workflows in HR and internal communications, or adopting technologies that enhance safety and efficiency for frontline workers on production floors.
Examples of successful digital transformation in this context include online and mobile banking, chatbots, e-Citizen portals, Carrefour’s online shopping, and Jumia’s home delivery services.
Business Model Transformation
This refers to the process through which organizations leverage digital technologies to transform their traditional business models. Numerous innovative examples exist in today’s business landscape, such as Netflix’s reinvention of video distribution, Apple’s transformation of music delivery through iTunes, and Uber’s disruption of the taxi industry.
Domain Transformation
Domain transformation occurs when a business ventures into a different sector. This term describes companies that use digital technology to penetrate entirely new markets. While challenging, this approach can offer incredible opportunities. A notable instance of domain transformation is Amazon’s expansion into a new market with the launch of Amazon Web Services (AWS), now the largest cloud computing and infrastructure service provider globally, previously dominated by major players like Microsoft and IBM. Other examples include Safaricom’s M-PESA and Craft Silicon’s Little Cab.
Cultural and Organizational Transformation
Cultural transformation involves raising awareness of an organization’s core values, identifying misalignments with those values, and creating actionable plans to communicate and facilitate necessary changes. Examples of this can be seen in the adoption of Huduma Centers, KPLC, Telcos, and IFMIS within government sectors.
Digital Transformation in SACCOs
SACCOs are integrating technology into their operations to enhance efficiency and adaptability. This efficiency is structured around the Digital Workplace Skills Framework, which comprises four capabilities:
- The ability to competently and securely use the digital workplace (essential skills).
- The ability to find, process, and apply information in the digital workplace.
- The ability to create content and connect with others in the digital workplace.
- The ability to develop and adapt to the efficient and effective use of the digital workplace.
SACCOs can implement this framework by offering various approaches to support individuals with different learning styles and needs. These approaches can include formal training, informal learning opportunities (like drop-in sessions), curated online content access, peer learning and mentoring, and open-source platforms such as Google Digital Skills.
Role of Executives
Many executives struggle to answer critical questions about management’s digital transformation plans, and many board members find it difficult to evaluate the viability of proposed initiatives. Mr. Makatiani noted that critical elements facing SACCO executives include the costs associated with transformation initiatives, assessing whether the ambitions of the digital transformation efforts are sufficiently ambitious, and prioritizing the right initiatives for transformation.
Although many board members understand that digital initiatives are essential for maintaining current business models and developing new revenue streams, as the CEO highlighted, they often struggle to determine how they can add the most valueMr Makatiani.
Digital transformation is expanding the scope of the board’s mandate, presenting new risks and competitive challenges. To effectively navigate these challenges, Mr Makatiani suggested several factors that will enable boards to focus on the most pressing digital issues they may encounter:
- Business Impact: Take the time to analyze the potential effects of digital and technology on the business and decide on the best course of action.
- Value Creation: Assess how digital transformation influences the value creation process. Does it simplify that process?
- Tracking Progress: Determine the best tools and procedures to monitor the progress of digital transformation.
- Digital Talent: Ensure the organization has good visibility of its digital talent.
- Emerging Threats: Maintain a clear awareness of potential emerging threats.
By addressing both strategic and operational questions, boards can guide companies in achieving the digital transformations essential for maintaining a competitive edge in today’s market.
