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Digital can deal with Africa’s legacy problems

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Many businesses are grappling with the challenges posed by digitalisation as fears mount on the impact on jobs and growth. However, this view overlooks the real economic value that a digital industry will bring, writes WILLIAM MZIMBA of Accenture.

However, this myopic view of the future comes with a significant risk as it overlooks the real economic value that digitally driven industry initiatives will bring to growth, development, jobs and society at large. While research has generally been scarce on exactly what this means in rands and cents, the World Economic Forum launched the Digital Transformation Initiative (DTI) in 2015, in collaboration with Accenture, to maximize opportunities for businesses and society stemming from digital technologies.

Since then the DTI has assessed how digitalization in 13 major industries is transforming business and wider society. This work has brought us into direct contact with more than 1,000 executives, policy makers and experts, who have helped uncover some key themes for ensuring the value of digitalization is captured by both business and society.

Thanks to this initiative it is now possible to more adequately determine how these initiatives can make an extremely positive contribution over the next decade if harnessed early enough.

While embracing something new is always hard to do and a desire to stick to your knitting is only natural, key role players in Africa must realise they are on the cusp of a real game changer and by embracing digital change in a strategic fashion they can leapfrog many legacy problems they face.

It certainly won’t happen overnight but the first step is for business, labour and government to understand the potential and to work together on making changes that matter.

Many are too quick to focus on the negatives as a reason for not taking action – for instance, estimates of global job losses due to digitalization range from 2 million to as high as 2 billion by 2030.

Could it be they have never actually been able to quantify the benefits in their sector? If that is so, a white paper by the World Economic Forum in collaboration with Accenture, throws considerable light on the potential value for industry due to digital transformation. To date, the research has confirmed that digitalization has immense potential: we estimate it could deliver around $100 trillion in value to business and society over the next decade.

There is therefore little doubt DTI represents an immense opportunity for new value creation and lead in the new, often against a backdrop of a stagnating market, regulatory pressures, or changing consumer preferences.

What is urgently needed, however, is a new framework for public-private dialogue, as we are still at the early stages of discovery about the true benefits of DTI. It is no use paying lip service to these realities and far more discussion and input is required from all stakeholders as this journey unfolds.

Breaking down traditional barriers to entry and expansion will be key and our DTI research across the automotive, consumer, electricity and logistics sectors estimates the value of DTI in the region of $8.4 trillion; and value for society of approximately $12.7 trillion, between 2016 and 2025.

Zoning in on a specific industry of critical importance to Africa – electricity – optimizing the grid to manage real-time supply and demand is worth $191 billion for electricity companies, while the value this could deliver to society is three times as much ($623 billion). This is derived from cost savings for customers (offering an incentive to postpone consumption during peak hours), lower fuel emissions and jobs created.

Nothing could be more important in Africa today than making a difference to broader society. The dialogue I mentioned above needs to take numerous realities into account if the benefits are to be realised. For instance, in many instances, digital initiatives are projected to deliver high value to business and society. This means that no intervention is likely needed to realize those benefits – industry has a clear incentive to act of its own accord. For example, omni-channel retail is likely to deliver such huge benefits to industry (estimated at $1.4 trillion) and to society (from a $5 trillion reduction in costs and productivity improvement, amounting to 300 billion hours saved), that there would appear to be little need for policy/regulatory intervention.

However, in logistics the value to society of shared warehousing is equivalent to approximately 500 times the value to industry. In the automotive industry, the value to society of automotive partners agreeing on usage-based insurance to help reduce road deaths, insurance premiums and crash costs is worth approximately 200 times the value to industry. This is where multi-stakeholder collaboration is needed and, potentially, new incentives required to change the direction of the market.

The bottom line is DTI needs to be used to augment and fast track growth, development and education in Africa, but this will require significant buy-in from all stakeholders. That journey needs to start today.

* William Mzimba, Chief Executive of Accenture South Africa and Chairman of Accenture sub-Saharan Africa

Africa News

Smart grids needed for Africa’s utilities

Power utilities across Africa should rethink their business models and how they manage and monetise their assets to keep pace with the changing energy ecosystem, says COLIN BEANEY, Global Industry Director for Asset-intensive and Energy and Utilities at IFS.

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Africa’s abundant natural resources and urgent need for power mean that it is one of the most exciting and innovative energy markets in a world that is moving rapidly towards clean, renewable energy sources. The continent’s energy industry is taking new approaches to providing unserved and underserved communities with access to power, with an emphasis on smart technologies and greener energy sources.

Power systems are evolving from centralised, top-down systems as interest in off-grid technology grows among African businesses and consumers. And according to PwC, we will see installed power capacity rise from 2012’s 90GW to 380GW in 2040 in sub-Saharan Africa. Power utilities are needing to rethink their business models and how they manage and monetise their assets to keep pace with the changing energy ecosystem.

Energy and utilities providers are transforming from centralised supply companies to more distributed, bi-directional service providers. They can only achieve this through the evolution of “smart grids” where sensors and smart meters will be able to provide the consumer with a more granular level of detail of power usage. This shift from an energy supplier to “lifestyle provider” will require a much more dynamic and optimised approach to maintenance and field service.

African companies must thus embrace digital transformation as an imperative. This transformation begins by embracing enterprise asset management to improve asset utilisation. The subsequent steps are enhancing upstream and downstream supply chain management; resource optimisation; introducing enterprise operational intelligence; embracing new technologies such as the Internet of Things, machine learning, and predictive maintenance; and becoming a smart utility.

Embracing mobility to drive ROI

Getting it right is about putting in place an enterprise backbone that accommodates asset and project management, multinational languages and currencies, new energies and markets, visualisation of the entire value chain, and mobility apps. Mobile technologies that support the field workforce have a vital role to play in driving better ROI from utilities’ investments in enterprise asset management and enterprise resource planning solutions.

Today’s leading enterprise asset management solutions feature powerful functionality for mobile management of the complete workflow of work orders – from logging status changes and updates, from receiving and creating new orders to concluding the job and reporting time, material and expenses. Such solutions are easy to deploy and intuitive for end users to learn and use.

Importantly for organisations operating in parts of the continent with poor telecoms infrastructure, connectivity is not an issue. The solutions work offline and synchronises when network connectivity is available. Users can work on any device—laptops, tablets, and smartphones—commercial or ruggedised.

By ensuring that field technicians have easy access to information and processes, the mobile solution enables technicians and maintenance engineers to easily do the following tasks:

·         Create a new work order on the fly and log new opportunities

·         Access both historical and planned work information when requested

·         Permit customers to sign when the job is completed

·         Capture measurements and inspection notes on route work orders

·         Create new fault reports on routing

·         Facilitate documentation through photo capturing

·         Provide easy access to technical data and preventive actions.

The power of mobility allows the engineer to be the origin of all data capture on a service event. They can easily inquire on asset history, record parts used or parts needed for repair, record labour hours, and expenses as they occur, and any notes of repairs performed. When coupled with workforce management tools, such solutions unlock significant productivity gains for utilities who are trying to get the most from their workforce and assets.

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Brands fall for app vanity

The experience of a mobile screen full of icons, representing independent apps that your need to open to experience them, is making less sense. Instead, businesses should serve customers with an ‘app-like’ experience inside the digital platform they already use, says PIETER DE VILLIERS, Group CEO at Clickatell.

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Many brands remain obsessed with creating mobile apps. This not only defies trends that point to increasing consumer app apathy, but can exclude a sizeable portion  of your customers in emerging economies. Companies need to engage with their users where they are rather than forcing them onto an app, in what can only be described as brand vanity. 

In 2017 there were around 2.2 million apps available in the iOS app store and over 3 million on Google Play. And, while the number of apps being downloaded continues to rise, analysis shows that consumers are only using 30 apps per month and accessing just 9 on a day-to-day basis. 

While these numbers still seem attractively high, in reality the majority of the apps we use are for messaging (like Facebook Messenger, WhatsApp, and WeChat) and our social networking, gaming, leisure, dating or utility activities. 

Despite the facts, the application strategy as the holy grail for digital transformation is still being pushed even within large progressive brands. What’s more, some advertising agencies and digital consultants are still pushing apps as the best means for companies to connect with their customers. This has resulted in some organisations stubbornly doubling down on app strategies which are simply not showing return on investment (ROI). 

It’s not immediately clear to us whether the fascination with apps is a roll-over from long overdue projects or whether brand owners equate a mobile-first strategy with a mobile app. Mobile-first in 2018 means customer first, and therefore embracing chat commerce in order to deliver services with convenience and simplicity in mind. 

Why apps won’t win the internet

The problem with apps goes beyond user fatigue. In the first instance, many apps are poorly designed, assuming technical sophistication which may not match reality for the average customer. Poor user interfaces and attempts to provide complex engagement can result in even the best ideas missing their targets due to lack of engagement. 

Secondly, we all know that economic realities drive consumer behaviour. In Africa, new mobile phone users typically opt for feature phones over smartphones. With a longer battery life and a much more accessible price point, feature phones still allow for a basic internet connection, chat platforms like WhatsApp, and call and message functionality. In these regions, the cost of an app – even if it’s free – goes far beyond installing it. Constant updates require reliable and cheap access to the internet. For the average phone owner in an emerging market, this can be a serious challenge. 

Thirdly, and most importantly, apps must be relevant to their intended market. Frequency of usage is a key measure of relevance. 

Apps which are used on a daily basis, like health and fitness trackers, enjoy constant engagement. New features which are added are eagerly awaited by users who are happy to update their apps. 

However, users may well question the relevance of the app if they are required to conduct updates on a monthly or even weekly basis when they are only making use of the app once or twice a year. 

On average, I download one app per quarter. Some I use more frequently than others, but all of these apps need to be regularly updated to maintain security, update features, and fix bugs. Many apps are pushing out updates much more frequently. I noticed over the past year that I could go from having all apps updated, to 32 apps requiring an update in five days.

When it comes to a customer-first digital strategy, companies should be asking themselves if an app is really the best way to reach their target audience. 

In fact, at the end of 2016, Gartner predicted that by 2019, 20 percent of brands would ditch their mobile app. What’s more, in its 2018 predictions, the company forecast that by 2021, more than 50 percent of corporations would spend more per annum on bots and chatbots than on mobile app development. 

So, we need to ask, what is the alternative for CIOs, CDOs, CMOs, and digital leaders who are looking for ways to reach, retain and grow their customer base? 

The logical app alternative 

The old battle advice goes: fight your enemy where they are not. Military strategists agreed that having your enemy come to you and fight you on your own terms was preferable. In a world where customers have access to thousands of offerings and millions of deals online, we need to flip that idea to Meet Your Customers Where They Are. 

Any marketeer will tell you just a how difficult it is to drive app downloads. Development, cross platform testing and user interface aside, the marketing campaign required to get customers to download the app can swallow entire annual budgets and still come up short. 

Looking at the facts, it makes infinitely more sense to work within the digital platforms already being used by your target audience. 

Clickatell is already enabling chat commerce for some of the leading global brands with its Touch solution. This allows organisations to serve their customers with an ‘app-like’ experience inside the chat or browser platform of their customer’s choice (Twitter, Facebook Messenger, etc.) 

Brands can now send an actionable Touch link such as ‘find the nearest ATM’ or ‘reset my password’ within a chat stream that will open an intuitive touch card without the user having to download an app to perform the action. Services can also be linked to the in-app experience for brands not looking to abandon their app efforts. 

Working with our clients, many of whom are global innovators and thought leaders, we’ve found that having the courage to design with an ‘end user first’ approach and dealing with the back-end complexity behind the scenes results in cost efficient customer delight and ROI. 

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