The fourth industrial revolution or the technology revolution has the potential to change just about every part of our lives. NIR TENZER of Microsoft says that embracing this change will present opportunities for business of now and those of the future.
Technology has become ubiquitous and central to growth and innovation in today’s business. It is embedded in a vast array of services and devices, and accessible to businesses to do what was previously impossible.
When we talk about this fourth industrial revolution, just like the first three with steam, electricity and information technology, it had a pretty broad impact in the way we live, the way we work, the way we entertain ourselves, the way we communicate.
And now, when we talk about this fourth industrial revolution with digital technology, we’re talking about it having perhaps even a broader, deeper impact on all those aspects of our lives. The way we engage is changing, the way we work is changing and the way we solve, address problems and innovate is changing – the pace of the change is also getting faster and faster. The world of the future is going to be different to the world we live today – there will be businesses and jobs that we cannot even conceptualise today. The change and the disruption will come from many directions, including Industry disruption and Technology disruption. Cloud, mobility, social and insight coming from data will contribute to this massive wave of disruption.
The tumultuous period of change for us in our businesses and how we navigate that presents much opportunity for the businesses of today and those of tomorrow.
Opportunity in transformation
As we embark into the depths of this fourth industrial revolution, we come to learn that every business is a technology company. Every company has the potential to transform itself into a digital business.
What is a digital business? It’s more than presenting a website or online service to customers, or simply using technology to run your business. According to leading technology analyst firm Gartner, “Digital business is the creation of new business designs by blurring the digital and physical worlds.”
Contextualising this, here are some examples of what companies are doing today to digitise:
· Innovating with crowdsourcing and data—organisations are changing how they deliver new products and services by integrating customer, employee and general ecosystem feedback into their innovation process. In some cases, they are directly incorporating customers into the process. In others, they are collecting detailed data from the products they have in market in order to better understand usage and enable improvements. During the development process of Windows 10 for instance, Microsoft received millions of pieces of feedback from more than seven million fans who joined the insider programme, tested the software, and helped shape the finalised version of the operating system.
· Working smarter with smart machines—increasingly, smart machines such as digital assistants (like Cortana) are empowering employees and consumers be more informed and productive in how they work and live.
· Adapting the business through intelligent operations—enterprises today are connecting their operations and making them more agile and responsive to changing market conditions and customer needs. For example, a vehicle manufacturer can employ machine learning (quick data analysis) to identify and distinguish between model features that buyers actually need and nice-to-have features that they want based on customer demand, within various demographics across the globe. This will enable the car maker to cater to the needs of customers better with the right standard features everyone needs, while providing most of the cool features many people want as options.
· Staying ahead by anticipating what’s next—machine learning and advanced analytics are enabling organisations to anticipate and predict customer needs and market changes better and faster, helping them be more competitive in the market and wow their customers.
· Delighting customers with richer experiences—in order to deliver engaging customer experiences, businesses today are leveraging digital technology like interactive digital displays, second screen strategies, and mobile/local offers to enrich physical experiences with digital ones to help drive customer engagement and loyalty.
In order to successfully navigate the transformational wave, organisations need to form partnerships that will enable them to utilise systems of intelligence that will help them gain insight and take action from big data, optimise their operations and change the very nature of the business models around their industrial products.
Leaving a legacy of innovation, rather than a depending on legacy systems
Common stumbling blocks that prevent companies from effectively supporting business priorities through digital transformation include the burden of legacy systems. Enterprises and large corporations within sectors such as financial services and retail often find themselves being disrupted by smaller, more agile competitors such as SMEs and start-ups that are not burdened by legacy system that is very complex to manage.
As Microsoft, we are similarly impacted and disrupted and are experiencing our own digital transformation. We have adopted interconnected ambitions that represent more than our ambitions – they are our response to this imperative to transform and designed to help our customers deliver transformation within their organisation.
By adopting the mind-set of a digital company, any business can transform through the four pillars of digital transformation. The first of these is empowering your customers through tools like a customer management system and approaches such as driving viral find, try and buy opportunities that help cross-sell and up-sell, and build these capabilities into offerings. Next up, companies have to empower employees through knowledge and insight tools, enabling staff to access data and collaborate from anywhere, anytime, using any device or platform.
The penultimate pillar is optimising your operations, which is achieved by migrating services to the cloud and focussing automation. Last but not least is transforming your products, which is done by creating connected services and generating insights to see what can be monetised to unlock new business models. Previously businesses designed, built, produced and shipped a product, then customers bought it. That was the end of the cycle. Now organisations are building in continuous feedback loops – sensors in product, after-market services, and customer feedback from a variety of channels. Transformation requires these rich systems of intelligence. And it isn’t simply about technology…systems of intelligence represent the combination of technology, people and process that enable these feedback loops, and define an organisation’s competitiveness and ability to change the entire landscape of the industries in which it participates.
Moreover, organisations, will require a cultural change within the company that sees staff being more open to learning, using and integrating new systems, tools and solutions into their daily routines and processes.
* Nir Tenzer, Microsoft South Africa’s Marketing and Operations Director.
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.
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.
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.
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.”