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Institutional stupidity holds back digital future

We live in a curious time of in-between, an interregnum in which we have left many of the demands of the past behind but not yet embraced the ways of the future. Which is a shame, since the future is so much easier, quicker and more efficient.

For example, our payment system is finally leaving behind the old plastic card technology that demanded a signature on a piece of paper, which then had details of the transaction imprinted through a so-called zip-zap machine.

Soon, all credit card payments will be made through a virtual card stored in an invisible digital wallet on our smartphones. But meanwhile, we are stuck in the world of in-between, using plastic cards that take a digital imprint of the card and spit out a paper receipt. It feels more advanced, but in reality it is merely a connected, faster form of the zip-zap machine, and some still return to their paper comfort zone.

We see the same in-between thinking at work in what was once hailed as the most progressive of South Africa’s state institutions: SA Revenue Services. When SARS introduced e-filing in August 2007, few believed it would work. Yet, within a couple of years, it was processing hundreds of thousands of tax returns, eliminating millions of printed pages, and dramatically speeding up tax refunds.

But it is almost as if SARS has lost its nerve. Now, when taxpayers experience delays in refunds and visit tax offices, they are invariably told to come back with the “original” printouts of their e-filed tax returns. Of course, in the digital era, there is no such thing; any print-out from any computer is the equivalent of an “original” print-out, and it can be done as easily at the tax office as at home.

However, anyone who has attempted that argument at a tax office will know the futility of arguing with a bureaucrat. Whether it is bloody-mindedness, inefficiency, or a ploy to keep staff busy, it makes no sense and reverses any goodwill that e-filing had created.

But it’s not only government departments that make demands that are wasteful of both physical resources and human productivity. Many finance departments in corporate South Africa demand that suppliers mail or deliver an “original” invoice, even though it would simply be a printed version of the electronic document that had already been emailed.

The policy is still in place at some banks, telecommunications organisations and large mining houses. It is not only archaic thinking, it is also a remarkable form of institutional stupidity. The intensity of competition today means that businesses must become fully digital to be nimble, responsive and efficient. And that is merely to keep up with competitors, let alone outperform them.

Meanwhile, even in the in-between world, where businesses acknowledge that digital has replaced paper, the future is also not fully grasped. Most companies still email documents in basic PDF format that cannot be filled in electronically, so they have to be printed out, filled in and signed with pen, re-scanned, and emailed.

The only reason businesses get away with this in-between technology is that most of their customers also reside in the in-between world, or even in the old paper world. But the longer they wait to own their own digital future, the more likely they are to fall through the cracks of this bureaucracy, and no amount of paper will save them.

  • This column first appeared in Business Times in the Sunday Times on 18 September 2016.

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