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Businesses are taking IT out of the IT dept

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Research from VMware has revealed that 57% of South African business leaders believe the management of technology is shifting away from IT to other departments, as lines of business take charge of technology-led innovation in organisations.

The research, among 2,000 IT decision makers and 2,000 heads of lines of business globally, including 100 in South Africa, finds that this decentralisation of IT is delivering real business benefits: the ability to launch new products and services to market with greater speed (61%), giving the business more freedom to drive innovation (59%) and increasing responsiveness to market conditions (59%). There are also positives from a skills perspective, with the shift in technology ownership beyond IT to the broader business seen to increase employee satisfaction (63%) and help attract better talent (52%).

This move, however, is not without its challenges. Leaders from across the business believe the shift is causing a duplication of spend on IT services (51%), a lack of clear ownership and responsibility for IT (58%) and the purchasing of unsecure solutions (68%). Furthermore, this decentralisation movement is happening against the wishes of IT teams, the majority of which (58%) want IT to become more centralised. In particular, IT leaders feel that core functions like network security and compliance (50%), private cloud-based services (28%) and storage (24%) should remain in their control.

“It’s ‘transform or die’ for many businesses, with a tumultuous economic environment and a radically evolved competitive landscape upturning the way they operate,” says Matthew Kibby, Regional Director at VMware Sub-Saharan Africa. “Managing this change is the great organisational challenge companies face. The rise of the cloud has democratised IT, with its ease of access and attractive costing models, so it’s no surprise that lines of business have jumped on this opportunity. Too often, however, we’re seeing this trend left unchecked and without adequate IT governance, meaning that organisations across EMEA are driving up costs, compromising security and muddying the waters as to who does what, as they look to evolve.”

The ownership for driving innovation within South African organisations is not disputed among business leaders.  The majority (80%) believe that IT should enable the lines of business to drive innovation, but must set the strategic direction and be accountable for security. This highlights the balance to be struck between the central IT function retaining control while also allowing innovation to foster in other, separate areas of the business.

The move to Cross-Cloud as a Solution

“Discovery innovates at a rapid pace and we require agility to respond to ever changing business demands. Innovation and expansion are part of the Discovery DNA and, as a result, having visibility across our data centre operations is important for the organisation,” says Johan Marais, Virtualisation Manager at Discovery. “Cross-Cloud will enable this, as well as give our business the freedom of choice in data centre location, while ensuring operations deliver a top-class service irrespective of whether the service is delivered on a private, hybrid or public cloud.”

“This isn’t ‘Shadow IT’ anymore, that’s yesterday’s story – this is now ‘Mainstream IT’,” continues Kibby. “The decentralisation movement is happening, driven by the need for speed in today’s business world: we’ve never seen such a desire for new, immediately available applications, services and ways of working. By recognising these changes are happening, and adapting to them, IT can still be an integral part of leading this charge of change. The latest technology or application will only truly drive digital transformation when it’s able to cross any cloud, is available at speed and with ease, within a secure environment.”

Supporting Quote:

“By introducing its Cross-Cloud Architecture, VMware has taken cloud services to the next level, providing improved flexibility for customers to access services from different cloud providers and still be assured that they are in control and that their cloud environment is secure, no matter where it resides,” states Rohan de Deer, General Manager at iSanity.

Decentralisation definition

*The decentralisation of IT is when any employee within any business department of an organisation, other than the IT department, is making IT purchases or installing or maintaining software. It can also include employees using non-IT approved software, such as Dropbox, without the involvement of the centralised IT department.

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Online retail gets real

After decades of experience in selling online, retailers still seek out the secret of reaching the digital consumer, writes ARTHUR GOLDSTUCK.

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It’s been 23 years since the first pizza and the first bunch of flowers was sold online. One would think, after all this time, that retailers would know exactly what works, and exactly how the digital consumer thinks.

Yet, in shopping-mad South Africa, only 4% of adults regularly shop online. One could blame high data costs, low levels of tech-savviness, or lack of trust. However, that doesn’t explain why a population where more than a quarter of people have a debit or credit card and almost 40% of people use the Internet is staying away.

The new Online Retail in South Africa 2019 study, conducted by World Wide Worx with the support of Visa and Platinum Seed, reveals that growth is in fact healthy, but is still coming off a low base. This year, the total sale of retail products online is expected to pass the R14-billion mark, making up 1.4% of total retail.

This figure represents 25% growth over 2017, and comes after the same rate of growth was seen in 2017. At this rate, it is clear that online retail is going mainstream, driven by aggressive marketing, and new shopping channels like mobile shopping. 

But it is equally clear that not all retailers are getting it right. According to the study, the unwillingness of business to reinvest revenue in developing their online presence is one of the main barriers to long-term success. Only one in five companies surveyed invested more than 20% of their online turnover back into their online store. Over half invested less than 10% back.

On the surface, the industry looks healthy, as a surprisingly high 71% of online retailers surveyed say they are profitable. But this brings to mind the early days of Amazon.com, in 1996, when founder Jeff Bezos was asked when it would become profitable.

He declared that it would not be profitable for at least another five years. And if it did, he said, it would be in big trouble. He meant that it was so important for long-term sustainability that Amazon reinvest all its revenues in customer systems, that it could not afford to look for short-term profits.

According to the South African study, the single most critical factor in the success of online retail activities is customer service. A vast majority, 98% of respondents, regarded it as important. This positions customer service as the very heart of online retail. For Amazon, investment back into systems that would streamline customer service became the key to the world’s digital wallets.

In South Africa online still make up a small proportion of overall retail, but for the first time we see the promise of a broader range of businesses in terms of category, size, turnover and employee numbers. This is a sign that our local market is beginning to mature. 

Clothing and apparel is the fastest growing sector, but is also the sector with the highest turnover of businesses. It illustrates the dangers of a low barrier to entry: the survival rate of online stores in this sector is probably directly opposite to the ease of setting up an online apparel store.

A fast-growing category that was fairly low on the agenda in the past, alcohol, tobacco and vaping, has benefited from the increased online supply of vapes, juices and accessories. It also suggests that smoking bans, and the change in the legal status of marijuana during the survey, may have boosted demand. 

In the coming weeks, we can expect online retail to fall under the spotlight as never before. Black Friday, a shopping tradition imported “wholesale” from the United States, is expected to become the biggest online shopping day of the year in South Africa, as it is in the USA.

Initially, it was just a gimmick in South Africa, attempting to cash in on what was a purely American tradition of insane sales on the Friday after Thanksgiving Day, which occurs on the third Thursday of November every year. It is followed by Cyber Monday, making the entire weekend one of major promotions and great bargains.

It has grown every year in South Africa since its first introduction about six years ago, and last year it broke into the mainstream, with numerous high profile retailers embracing it, and many consumers experiencing it for the first time. 

It is now positioned as the prime bargain day of the year for consumers, and many wait in anticipation for it, as they do in the USA. Along with Cyber Monday, it provides an excuse for retailers to go all out in their marketing, and for consumers to storm the display shelves or web pages. South African shoppers, clearly, are easily enticed by bargains.

Word of mouth around Black Friday has also grown massively in the past two years, driven by both media and shoppers who have found ridiculous bargains. As news spreads that the most ridiculous of the bargains are to be had online, even those who were reticent of digital shopping will be tempted to convert.

The Online Retail in SA 2019 report has shown over the years that, as people become more experienced in using the Internet, their propensity to shop online increases. This is part of the World Wide Worx model known as the Digital Participation Curve. The key missing factor in the Curve is that most retailers do not know how to convert that propensity into actual online shopping behaviour. Black Friday will be one of the keys to conversion.

Carry on reading to find out about the online retailers of the year.

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Reliable satellite Internet?

MzansiSat, a satellite-Internet business, aims to beam Internet connections to places in South Africa which don’t have access to cabled and mobile network infrastructure, writes BRYAN TURNER.

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Stellenbosch-based MzansiSat promises to provide cheap wholesale Internet to Internet Service Providers for as little as R25 per Gigabyte. Providers who offer more expensive Internet services could benefit greatly from partnering with MzansiSat, says the company. 

“Using MzansiSat, we hope that we can carry over cost-savings benefits to the consumer,” says Victor Stephanopoli, MzansiSat chief operating officer.

The company, which has been spun off from StellSat, has been looking to increase its investor portfolio while it waits for spectrum approval. The additional investment will allow MzansiSat’s satellite to operate in more regions across Africa.

The MzansiSat satellite is being built by Thales Alenia Space, a French company which is also acting as technical partner to MzansiSat. In addition to building the satellite, Thales Alenia Space will also be assisting MzansiSat in coordinating the launch. The company intends to launch the satellite into the 56°E orbital slot in a geostationary orbit, which enables communication almost anywhere in Africa. The launch is expected to happen in 2022. 

The satellite will have 76 transponders, 48 of which will be Ku-band and 28 C-band. Ku-band is all about high-speed performance, while C-band deals with weather-resistance. The design intention is for customers of MzansiSat to choose between very cheap, reliable data and very fast, power-efficient data. 

C-band is an older technology, which makes bandwidth cheaper and almost never affected by rain but requires bigger dishes and slower bandwidth compared to Ku-band connections. On the other hand, Ku-band is faster, experiences less microwave interference, and requires less power to run – but is less reliable with bad weather conditions.

MzansiSat’s potential military applications are significant, due to the nature of the military being mobile and possibly in remote areas without connectivity.  Connectivity everywhere would be potentially be life-saving.

Consumers in remote areas will benefit, even though satellite is higher in latency than fibre and LTE connections. While this level of latency is high (a fifth of a second in theory), satellite connections are still adequate for browsing the Internet and watching online content. 

The Internet of Things (IoT) may see the benefits of satellite Internet before consumers do. The applications of IoT in agriculture are vast, from hydration sensors to soil nutrient testers, and can be realised with an Internet connection which is available in a remote area.

Stephanopoli says that e-learning in remote areas can also benefit from MzansiSat’s presence, as many school resources are becoming readily available online. 

“Through our network, the learning experience can be beamed into classrooms across the country to substitute or complement local resources within the South African schooling system.”

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