Digital and IT review
Connecting Africa and the world, and driving differentiation, optimisation and disruption, means we must acquire, develop and deploy leading digital capabilities. Our digital strategy centres on applying best-of-breed and emerging technologies to provide clients and principals with innovative solutions that differentiate them from their competitors. We embrace market disruptors and leverage innovation so that our clients and principals will not only survive – but thrive – well into the future.
Digitisation, automation, new technologies and data – including consumer engagement, e-commerce and telemedicine – will shape our business models and help futureproof our business and our industry. We are investing heavily in flexible IT architecture and a ‘digital-first’ approach, to offer high-grade automation and best-in-class IT systems – tailored to the processes of our clients, principals and customers.
Our digital platforms and capabilities are a critical enabler of all our strategy pillars and enhancing them will create value for the group across our six value lenses: enabling growth, improving efficiency, enhancing experience, mitigating risk, building our brand and optimising capital.
Go digital, be digital and enable digital
Becoming ‘One Imperial’ and positioning ourselves as the ‘Gateway to Africa’ means placing IT and digital initiatives at the heart of our enterprise. It is our technological prowess that will determine Imperial’s differentiation, market relevance, client experience and ability to sustain profitable growth. Although we are having to move quickly to catch up with our global peers in this respect, the lag in digital adoption in Africa provides a window of opportunity to entrench our leadership in our markets. Rising to this challenge requires that we attract talent with the necessary digital and IT skills, and retrain our employees across all levels of the organisation to ensure our people have the skills required to engage with and use new digital and IT platforms.
Our entrepreneurial beginnings had left us with a legacy of decentralised IT solutions and initiatives not suited to our scale and progress to the ‘One Imperial’ business model, culture and brand. This, in combination with the accelerating adoption of digital capabilities and related escalation in expectations of key stakeholders, highlighted the need for a unifying and centre-led digital strategy. In turn, this needed a cohesive IT architecture and standardised processes, to enable digital optimisation and innovation across the group.
Over the past year, we have made significant progress on implementing our digital and IT strategy. We have established our centre-led digital and IT capability and structure, made key appointments, worked hard to develop enterprise architecture roadmaps for our business units and our work on enterprise architecture will stand us in good stead as we begin to standardise our digital platforms. Excellent progress has been made in establishing a base for data-driven decision making through our business performance insights platform. Acquiring Parcel Ninja has fundamentally shifted perceptions of digital and IT at Imperial. We have also made strides in progressing our digital fleet management capabilities and made significant investments in our digital commerce capabilities.
Investing in digital and IT
Digital and technology transformations carry upfront costs and require significant investment in the short term, to achieve benefits that only return value in the medium and long term. Over the past year, we have allocated significant capital to our digital and IT initiatives.
Digital outcomes
- Systems and platforms that enable our people and clients while supporting growth, cost optimisation, value for money and performance.
- Digital and data capabilities designed to support Imperial’s strategy and purpose: connecting Africa and the world and improving people’s lives with access to quality products and services.
Our digital and IT strategy
Our strategy is key to transforming Imperial, enabling growth and achieving our strategy by providing coherent system architecture and processes that support core business and strategic delivery, and by facilitating access to new value propositions and revenue streams. Ultimately, our digital strategy should enable us to build partnerships across our ecosystem, and identify, pre-empt, integrate and own potentially disruptive technologies and businesses. Our digital strategy is both a driver of and facilitated by our ‘One Imperial’ and ‘Gateway to Africa’ strategy; a unifying digital strategy is not possible without an integrated and unified approach to the business, and our ability to truly become ‘One Imperial’ cannot be fulfilled without foundational IT processes and initiatives in place. Our digital initiatives and imperatives are similarly foundational to our ability to capture new opportunities, amplify value, differentiate, meet and anticipate our clients’ needs, and to lead in innovation.
Our digital and IT strategic goal is to use best-in-class and emerging technology to improve efficiency, facilitate revenue growth and create new revenue streams by focusing on:
Leveraging our digital capabilities in e-commerce fulfilment, control towers, value from data and digital disruptors, to gain a commercial competitive advantage.
Using data insights to drive improved decision making across the business.
Enabling the ‘One Imperial’ transformation via digital engagement initiatives that support communication and HR best practice.
Developing our enterprise architecture to enable process simplification, standardisation and digitisation according to our enterprise architecture roadmaps, in collaboration with business and group functions.
Enhancing the ways we do business, prioritising:
- Service management (including our customers and partners).
- Cost and value (including transparency and business cases).
- Talent management (including diversity and inclusion).
We measure our progress through our strategic KPIs
Enterprise architecture
- Clarify digital context and define journey.
Establish digital capabilities
- Develop digital and IT initiatives.
Acquire e-commerce capabilities
- Complete acquisition and leverage capabilities.
Investments and partnerships
- Progress investment in innovation and apply learnings.
Digital and IT organisation
- Define organisational strategy and implement.
This strategy is being translated into future enterprise architecture along the following purpose-driven framework:
Digital and IT initiatives enabling ‘One Imperial’
Internal <> External value
Digital and IT structure
A unifying digital strategy necessitated a shift in the way that we operate within the business and the creation of a centre-led digital and IT engagement model. In the past year, we have appointed a digital and IT leadership team to oversee and co-ordinate the implementation of our strategy and undergone a deep organisational design process with the aim of positioning digital and IT to enable the group’s functions to support business and enable the group’s businesses to serve their external clients, principals and customers. As part our organisational design, the digital and IT executive committee members have identified a set of focus areas and related changes required to deliver on our strategy and accelerate digital enablement within the group.
People and change
- Activate and transition to the new Digital & IT organisational structure.
- Effectively manage change and communications related to implementing the new digital and IT model.
Business and
functional IT
- Establish an effective business partnering link with relevant executives.
- Consolidate and standardise systems and teams into business capability-oriented teams.
Digital products
- Elevate data and insight into an industrialised capability underpinning all our businesses.
- Ideate, incubate and scale a set of ‘One Imperial’ digital products.
- Consolidate and further mature our delivery capabilities.
IT services and security
- Integrate local support structures into one support structure with local nodes.
- Consolidate and modernise infrastructure and platforms into a scalable foundation.
- Embed an end-to-end cyber security approach across Imperial.
- Bolster licence, asset and performance management for improved control.
Strategy and
architecture
- Establish the ‘One Imperial’ architecture direction and enabling governance.
- Manage our ‘One Imperial’ project portfolio with appropriate and enabling governance.
- Create visibility in cost and value within digital and IT.
We also identified functional goals for the 2021 financial year, against which we track our progress.
We have completed our first succession planning process; this should facilitate increased diversity at upper management and leadership levels, while also providing various succession alternatives, ensuring long-term viability of our digital strategy and initiatives.
Defined and communicated our focus areas.
Completed our strategy to structure process.
Completed inventory for our enterprise architecture and defined our conceptual framework and platform strategy.
Continue to accelerate our digital capabilities.
Conceptualised our engagement model and translated it into organisational design.
Agreed the principles of our commercial consequence and translated this into budget guidelines.
Established our data lake, replicated commercial and financial reporting in the user interface and performed extensive data science for digital fleet management to establish our business performance insights platform (BPI-P).
Key initiatives
Our business performance insights platform
During the 2021 financial year, we partnered with experts in data-based decision making to begin developing our BPI-P, a fully integrated and centralised reporting platform that, when fully implemented, will enable improved data-led decision making and reduce risk. The platform is designed to provide a solution for handling big data across the group, with the aim of deriving value from data and generating and evaluating business performance insights.
The BPI-P is a relatively new development and is being tailored to meet the needs of key internal stakeholders. These are currently grouped into three insights categories as well as digital fleet management below, each of which addresses specific stakeholder and business needs.
Commercial insights
Our commercial reporting capability is well established and was one of the first business elements migrated to the BPI-P. We use these insights to increase client satisfaction, optimise margins, improve pipeline conversion, increase productivity and to focus on 100% contract renewals.
Business insights
These aim to combine data and analysis to increase our understanding of our actual performance across business continuums, drive strategy and increase our competitive advantage. The insights provide a deeper understanding of major mechanics related to our business, allowing us to identify why an event affecting performance occurs. In consultation with Market Access and Logistics, we have identified a list of KPIs to be used as the initial base for BPI-P reporting dashboards.
Finance insights
By exporting our financial management data into BPI, we will be able to develop business reports and enable near real-time reporting of key financial metrics and data including standardised and historical data, comparative and actual budgets, and forecast trending over months and years.
Enterprise architecture
Enterprise architecture forms a key element of improving the group’s performance; this will allow us to develop a holistic and integrated view of our strategic direction, business practices, information flows and technology resources. By developing current and future versions of this integrated view, we will manage the transition from current to future operating states across five domains:
Organisational structure and the functional capabilities needed to deliver the vision.
Individual applications, their interactions and their relationships to core business processes.
The structure of our logical and physical data assets and data management resources.
Software and hardware needed to implement our business, data and application services.
The structure and behaviour for our security processes and information security systems.
To progress our work on enterprise architecture, we have:
- Completed enterprise architecture roadmaps for the majority of our business units.
- Established a business architecture framework identifying key business capabilities that currently exist within Imperial and identified capabilities that are needed to deliver on strategy.
- Developed application roadmaps and implementation timelines for each business.
- Developed a data insights strategy that focuses on people, processes and technology.
- Established an architectural review committee to ensure good governance.
Digital engagement
In collaboration with corporate affairs and investor relations, we have engaged with a global digital strategy and technology partner to assist us in gaining a deeper understanding of user journeys, and of how to best support digital engagement for internal and external stakeholders. The process is designed to ensure we select the appropriate technologies to elevate and advance digital engagement among our key stakeholder groups.
For more on the group’s approach to change management, Our people.
Our structured value-focused initiatives
We continue to provide principals and clients with best-in-class and complete solutions, to access their end-consumers through an integrated sourcing, logistics and sales service. Our strategic digital and data initiatives are aligned with our focus areas and designed to deliver growth.
Key initiative: Parcel Ninja acquisition
We acquired and are fully integrating Parcel Ninja, a specialised warehousing and distribution management business, which represents a fundamental shift in our digitalisation journey. With its leading software, processes and people capabilities in South Africa, Parcel Ninja provides fulfilment in both B2C and B2B channels including the informal market, supported by the management and optimisation of courier parcel deliveries. This acquisition supports Imperial’s strategic ambition to accelerate our digital capabilities and expand our logistics and market access into last mile distribution and e-commerce fulfilment, and to grow our footprint and scale in Africa, while ensuring that our clients and principals remain locally relevant.
We are currently exploring collaboration opportunities with Parcel Ninja, including supporting Market Access with solutions for the South African market, warehouse and order management convergence and supporting direct-to-consumer logistics solutions.
Key initiative: Project Blue Fleet
We have begun rolling out Project Blue Feet, a digital fleet management initiative that will allow us to transform our South African operations into a more agile business by integrating insights in our South African road freight and contract logistics fleets.
The core objective for this initiative is reducing costs while realising fuel and overtime savings in the short term as well as other vehicle-related cost savings like insurance and tyre spend over time.
Significant business engagements were undertaken to understand the business requirements and processes, as well as to ensure that we adequately communicated progress appropriately with the teams to effectively manage our change management requirements.
Our current focus is on recording data and validating activity while also managing processes across the business with increasing accuracy, maturity and scope. We have set clearly defined performance baselines, enabling us to accurately measure and evaluate performance with minimal influence from non-controllable factors. We now understand the specific actions we must take to consistently improve our performance and proactively identify new opportunities to reduce waste and realise cost savings.
Overall alignment to group and Imperial Logistics
South Africa (ILSA) objectives to be achieved
Core initial focus of Project Blue Fleet is the South African
road freight businesses, with complimentary focus on
distribution fleets within contract logistics
Innovation Venture Fund
Our disruptive innovation fund, in partnership with Newtown Partners, makes available an initial capital investment of USD20 million to provide a mechanism to invest in innovative developments. We refined our investment principles and focus areas to fund high-potential start-ups in freight logistics, supply chain management and healthtech that use emerging technologies and disruptive business models to drive value.
We are actively managing nine portfolio companies, namely:
Clockwork Logistics, a B2B provider of
a highly configurable delivery platform
and driver application.
a healthtech
company, building
and operating a
network of modern,
technologically
enabled diagnostic
centres across
Nigeria.
B2B SaaS
platform that provides
real-time vessel and
container tracking
and dynamic demand
forecasting.
Field Intelligence,
a digital
pharmaceutical
distributor
operating
in Nigeria
and Kenya.
Shypple,a digital
freight forwarder
operating between
Asia and Europe.
RedBird, a provider
of rapid diagnostic
tests to pharmacies
in Ghana.
Lori Systems, a digital
road freight exchange
operating in East and
West Africa.
Fulfilment Bridge,
a cross-border
digital logistics
service provider,
serving e-commerce
merchants in the
Middle East and
North Africa.
Each of these minority investments have a time-to-value of five to seven years and were selected on the basis that they have capabilities that may become strategically relevant to Imperial at that time and at commercial scale. These start-ups are positioned to grow rapidly in their home markets before leveraging their disruptive competitive advantages to enter new geographical markets and service areas; they have the potential to reorganise value chains, address new customer segments more effectively than before, and to displace incumbents in the process. As they scale, some of these start-ups will be increasingly integrated into Imperial’s value chain, where they will help us to disrupt existing markets and enhance the competitiveness of our value proposition to clients.
Investing in innovative technology, relevant to our business and aligned to our strategy, will allow us to mitigate the risk of disruption, positioning the group at the forefront of innovation and allowing us to capitalise on the ongoing evolution of technology.
Our pragmatic approach to investing in innovation will support the strategic alignment of our investments as we continue to investigate new investment opportunities and partnerships. Our pipeline includes a range of opportunities, earmarked for due diligence research that will inform the granting of an investment mandate. The fund has the capacity to make four further investments and will continue to critically assess any opportunities to ensure that these are strategically aligned as well as being commercially viable.
Outlook
We have a clearly articulated and defined digital and IT strategy. We are finalising our medium-term plan and value case, which will be supported by implementing the enterprise architecture roadmaps that inform our investment requirements. Our newly established centre-led digital and IT structure will support the delivery of the plan, with the necessary governance and oversight structures and procedures in place.
Shareholder report: corporate governance report available online.
Having made key appointments in the year, we will continue to assess our resourcing requirements and deepen our digital and IT capabilities over time.
Going forward, we will continue to allocate adequate investment to the systems and skills, and the change management support, to enable Imperial’s growth aspirations and to generate valuable insights from our data assets; to support business and functions, facilitate access to new value propositions and revenue streams and mitigate the risk of disruption.
