With 2016 in full swing, its now more important than ever for the IT industry to evolve, but says SEBASTIAN ISAAC, Business Development Manager at Rectron, we still need to address the skills and awareness needed for us to excel.
With 2016 in full swing, it’s never been more important for the IT industry to evolve in order to remain relevant. From an increasing shift to the cloud and third platform technologies, to the development of the Internet of Things (IoT), the International Data Corporation’s (IDC) Worldwide IT Industry 2016 Predictions centre on digital transformation. In South Africa, while we are certainly seeing similar trends, we still need to address the skills and awareness necessary for us to excel.
Digital transformation at the heart of corporate strategy
According to the IDC, by the end of 2017, the majority of CEOs will have digital transformation at the centre of their corporate strategy, as they apply digital technology to all aspects of business. Linked to this an increased spend on third platform technologies and cloud-based infrastructure. Locally, digital transformation is becoming increasingly important as businesses are considering social and mobile analytics and the cloud to a greater extent, and we are beginning to see a transition.
That said, it is still a work in progress in South Africa. This is especially so when it comes to working in the cloud. We’re still seeing a large number of businesses focused on internal solutions. It is often the smaller businesses that have the capacity to move to the cloud more easily, with the larger enterprises having to follow a process when it comes to transitioning. However, the businesses that can make the shift or partner with industry cloud platforms are in prime position to offer their customers a more complete, packaged solution to meet their needs.
Changing the way we think about software, data and customers
As we continue down the digital transformation road, it stands to reason that businesses will ramp up their software development capabilities as they shift their focus to the creation of digital apps and services. A lot of software development is starting to focus more on extracting specific information and understanding who the customer is to have a more targeted approach. In addition, the embedding of cognitive services into apps is also beginning to gain ground, although there is still a lot of room to fine tune these according to the information that is actually needed.
In the spirit of extracting information, the IDC also predicts that businesses will expand their external data sources significantly. Businesses certainly need to be drawing from multiple data sources to consolidate and verify their information. We’ve seen this trend growing as several of our customers that work with multiple service providers are making use of the information from each of those sources to better analyse what is going on in their industries.
Of course, as we better understand our customers through these various means, it also stands to reason that businesses need to overhaul their digital front door to support the volume of customers coming from a variety of touch points. There is a growing trend for businesses to find inventive ways of getting in touch with their customers by making use of the data they extract to understand how to be relevant in their communications.
The Internet of Things continues to grow
When thinking about how to connect with customers to gain real-time insights into their behaviours and needs, IoT provides the answer. It has the potential to cut out the middle man and allows businesses to connect directly with their customers. In the IT space, it’s possible to embed IoT technology into a printer, for example, so that the manufacturer has control over the sales of consumables and repairs, as well as the opportunity to improve the product based on direct customer feedback. This changes the role of IT vendors as we know them.
However, there are still challenges in the IoT space, especially when it comes to the infrastructure being put in place. IoT is not entirely open platform yet, and for proper drive into this space we need more collaboration between different entities. As long as everyone continues to have their own protocols and standards, we are still a few years away from having a proper working solution to focus on IoT devices.
Innovation and relevance key in 2016
While we still have a way to go, South Africa is keeping up with global IT trends. As a country, we have a lot of innovation to offer and we have the potential to take giant leaps especially in the IoT space. Our challenge in the coming years is to ensure that we upskill and encourage people to be part of the IoT ecosystem and the IT sector in general. We also need to educate other sectors about the value that working in the cloud and using remote monitoring and management of data can add to business.
From Rectron’s perspective, we see the necessity of remaining relevant for our customers. We believe the way to achieve this is to look beyond products themselves and offer a total solution that adds real value to business and acts as a central point across warranty, servicing, and support. It’s an evolving model, but with digital transformation it is inevitable that those succeeding in the IT sector will make the shift.
VoD cuts the cord in SA
Some 20% of South Africans who sign up for a subscription video on demand (SVOD) service such as Netflix or Showmax do so with the intention of cancelling their pay television subscription.
That’s according to GfK’s international ViewScape survey*, which this year covers Africa (South Africa, Kenya and Nigeria) for the first time.
The study—which surveyed 1,250 people representative of urban South African adults with Internet access—shows that 90% of the country’s online adults today use at least one online video service and that just over half are paying to view digital online content. The average user spends around 7 hours and two minutes a day consuming video content, with broadcast television accounting for just 42% of the time South Africans spend in front of a screen.
Consumers in South Africa spend nearly as much of their daily viewing time – 39% of the total – watching free digital video sources such as YouTube and Facebook as they do on linear television. People aged 18 to 24 years spend more than eight hours a day watching video content as they tend to spend more time with free digital video than people above their age.
Says Benjamin Ballensiefen, managing director for Sub Sahara Africa at GfK: “The media industry is experiencing a revolution as digital platforms transform viewers’ video consumption behaviour. The GfK ViewScape study is one of the first to not only examine broadcast television consumption in Kenya, Nigeria and South Africa, but also to quantify how linear and online forms of content distribution fit together in the dynamic world of video consumption.”
The study finds that just over a third of South African adults are using streaming video on demand (SVOD) services, with only 16% of SVOD users subscribing to multiple services. Around 23% use per-pay-view platforms such as DSTV Box Office, while about 10% download pirated content from the Internet. Around 82% still sometimes watch content on disc-based media.
“Linear and non-linear television both play significant roles in South Africa’s video landscape, though disruption from digital players poses a growing threat to the incumbents,” says Molemo Moahloli, general manager for media research & regional business development at GfK Sub Sahara Africa. “Among most demographics, usage of paid online content is incremental to consumption of linear television, but there are signs that younger consumers are beginning to substitute SVOD for pay-television subscriptions.”
New data rules raise business trust challenges
When the General Data Protection Regulation comes into effect on May 25th, financial services firms will face a new potential threat to their on-going challenges with building strong customer relationships, writes DARREL ORSMOND, Financial Services Industry Head at SAP Africa.
The regulation – dubbed GDPR for short – is aimed at giving European citizens control back over their personal data. Any firm that creates, stores, manages or transfers personal information of an EU citizen can be held liable under the new regulation. Non-compliance is not an option: the fines are steep, with a maximum penalty of €20-million – or nearly R300-million – for transgressors.
GDPR marks a step toward improved individual rights over large corporates and states that prevents the latter from using and abusing personal information at their discretion. Considering the prevailing trust deficit – one global EY survey found that 60% of global consumers worry about hacking of bank accounts or bank cards, and 58% worry about the amount of personal and private data organisations have about them – the new regulation comes at an opportune time. But it is almost certain to cause disruption to normal business practices when implemented, and therein lies both a threat and an opportunity.
The fundamentals of trust
GDPR is set to tamper with two fundamental factors that can have a detrimental effect on the implicit trust between financial services providers and their customers: firstly, customers will suddenly be challenged to validate that what they thought companies were already doing – storing and managing their personal data in a manner that is respectful of their privacy – is actually happening. Secondly, the outbreak of stories relating to companies mistreating customer data or exposing customers due to security breaches will increase the chances that customers now seek tangible reassurance from their providers that their data is stored correctly.
The recent news of Facebook’s indiscriminate sharing of 50 million of its members’ personal data to an outside firm has not only led to public outcry but could cost the company $2-trillion in fines should the Federal Trade Commission choose to pursue the matter to its fullest extent. The matter of trust also extends beyond personal data: in EY’s 2016 Global Consumer Banking Survey, less than a third of respondents had complete trust that their banks were being transparent about fees and charges.
This is forcing companies to reconsider their role in building and maintaining trust with its customers. In any customer relationship, much is done based on implicit trust. A personal banking customer will enjoy a measure of familiarity that often provides them with some latitude – for example when applying for access to a new service or an overdraft facility – that can save them a lot of time and energy. Under GDPR and South Africa’s POPI act, this process is drastically complicated: banks may now be obliged to obtain permission to share customer data between different business units (for example because they are part of different legal entities and have not expressly received permission). A customer may now allow banks to use their personal data in risk scoring models, but prevent them from determining whether they qualify for private banking services.
What used to happen naturally within standard banking processes may be suddenly constrained by regulation, directly affecting the bank’s relationship with its customers, as well as its ability to upsell to existing customers.
The risk of compliance
Are we moving to an overly bureaucratic world where even the simplest action is subject to a string of onerous processes? Compliance officers are already embedded within every function in a typical financial services institution, as well as at management level. Often the reporting of risk processes sits outside formal line functions and end up going straight to the board. This can have a stifling effect on innovation, with potentially negative consequences for customer service.
A typical banking environment is already creaking under the weight of close to 100 acts, which makes it difficult to take the calculated risks needed to develop and launch innovative new banking products. Entire new industries could now emerge, focusing purely on the matter of compliance and associated litigation. GDPR already requires the services of Data Protection Officers, but the growing complexity of regulatory compliance could add a swathe of new job functions and disciplines. None of this points to the type of innovation that the modern titans of business are renowned for.
A three-step plan of action
So how must banks and other financial services firms respond? I would argue there are three main elements to successfully navigating the immediate impact of the new regulations:
Firstly, ensuring that the technologies you use to secure, manage and store personal data is sufficiently robust. Modern financial services providers have a wealth of customer data at their disposal, including unstructured data from non-traditional sources such as social media. The tools they use to process and safeguard this data needs to be able to withstand the threats posed by potential data breaches and malicious attacks.
Secondly, rethinking the core organisational processes governing their interactions with customers. This includes the internal measures for setting terms and conditions, how customers are informed of their intention to use their data, and how risk is assessed. A customer applying for medical insurance will disclose deeply personal information about themselves to the insurance provider: it is imperative the insurer provides reassurance that the customer’s data will be treated respectfully and with discretion and with their express permission.
Thirdly, financial services firms need to define a core set of principles for how they treat customers and what constitutes fair treatment. This should be an extension of a broader organisational focus on treating customers fairly, and can go some way to repairing the trust deficit between the financial services industry and the customers they serve.