A SYSTEM DYNAMICS APPROACH TO POSTAL DIGITAL TRANSFORMATION DYNAMICS: A CAUSAL LOOP DIAGRAM (CLD) PERSPECTIVE

• Published in: South African journal of industrial engineering 2022-12, Vol.33 (4), p.10-31
• Main Authors: Mokgohloa, Kgabo, Kanakana-Katumba, Mukondeleli Grace, Maladzhi, Rendani, Xaba, Sbusiso
• Format: Article
• Language: English
• Subjects: Business models; Complex variables; Decision making; Digital economy; Digitization; Economic development; Economics; Engineering, Industrial; Innovations; Mail; Operators; Postal & delivery services; Postal services; Quality of service; System dynamics; Technological change; Transformations
• ISSN: 2224-7890; 1012-277X; 2224-7890
• DOI: 10.7166/33-4-2592

Postal operators across the globe are faced with inescapable business model disruptions in the era of the digital economy, and Southern Africa is no exception. The advent of the digital age presents both opportunities and threats to business models of the industrial age, as digitalisation has led to the sustained decline of mail volumes as the core business of the postal service for the past 100 years. The replacement of traditional physical mail with electronic alternatives was a spectre that haunted the postal service for more than two decades; and the arrival of the digital age has accelerated the decline of mail volumes at an unprecedented speed as it spreads through almost every sector of society and as the digital economy becomes the preferred platform for conducting business. The digital economy requires postal operators to develop digital competitiveness, which entails investment in digital infrastructure and skills, and to transform their business model in the context of the digital age. The complex dynamics of the process of digital transformation necessitate a systems approach to understanding those dynamics. System dynamics can be a significant tool for comprehending behaviour, especially dynamic behaviour. This paper adopted a high-level modelling approach in which a dynamic hypothesis was developed through the articulation of a sub-system diagram that articulated the dynamic variables at play, a model boundary chart that articulated the nature of the variables (which are both exogenous and endogenous), and causal loop diagrams that explain the dynamic feedback relationship between the variables. This paper focused on the digital transformation imperatives to build the digital competitiveness of the postal sector in Southern Africa. The results point to the complex interaction of the variables that drive the digital competitiveness of the postal sector; and it is by comprehending these complexities that decision-makers and policymakers could steer the postal sector on to a digital-age path and into a sustainable future. Keywords : Digital transformation, dynamic hypothesis, model boundary chart, subsystem diagram, causal loop diagrams