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Driving Digital Business To The Core In Africa

by Peter Sondergaard  |  October 4, 2016  |  Comments Off on Driving Digital Business To The Core In Africa

A long flight from Cape Town to Tokyo provided me with plenty of time to reflect on the fascinating conversations I had with CIOs during Gartner Symposium/ITxpo in South Africa last week. The senior leaders I met left me in no doubt that Africa has its fair share of challenges, including social, economic and technology. As a result of these significant challenges, CIOs are employing immense creativity to drive digital to the core of their businesses and government institutions.

CIOs told me fascinating stories of how they are overcoming the limitations of small declining IT budgets, an expanding but budget-constrmained consumer-base, a fragile public network infrastructure and limited but increasing developer community. It became clear to me that CIOs and business leaders around the globe can learn a great deal from how African organizations deal with hyper-lean budgets, skills and infrastructure.

Across Africa there is a radical cost optimization of IT budgets underway driven by a lack of foreign currency and the declining value of natural resources. This is forcing CIOs to aggressively identify and exploit cheaper technologies, something that is benefiting Chinese, Indian and Vietnamese providers. The result is that in countries like Kenya, Ghana and Nigeria mobile app development is spreading rapidly fueled by vibrant developer communities. I was left wondering how long it will take for more CIOs outside Africa to consider these markets as the new playing field in the global competition for talent.

In organizations based in South Africa, which is a stronger economy, the struggles experienced by CIOs are no different to similar global organizations outside the region. I heard time and time again the familiar CIO lament about the competing demands of driving IT cost optimization, infrastructure simplification and optimization and the need to simultaneously create and implement an entirely new corporate digital strategy.

One particular example of this is the challenge faced by banks in South Africa. They are just like any other financial institution located in any other city in the world in that their number one initiative is to drive significant cost optimization. Nedbank, for instance, has driven a 10 percent reduction in IT costs over the last 3 years primarily through primarily through infrastructure optimization while simultaneously introducing new digital offerings for its customers. But thea South African banking sector is also seeing highly disruptive competition via innovative new born-mobile banking initiatives and even organizations entering the market from other industries. One example is Discovery, a leading insurer, which has now applied for a banking license.

And the insurance sector is likewise seeing competition from other industries. For example, South Africa’s largest mobile operator Vodacom (part of the Vodafone Group) entered the insurance marketplace a couple of years ago by catering to a low-income demographic for insurance in areas such as funeral insurances. Customers can pay their insurance premiums via top-up minutes on phone cards, which is an illustration of a digital solution leveraging the mobile platform in a unique manner.

Gartner research indicates that the Internet of Things (IoT), while still a nascent market in Africa, is gaining traction in specific sectors. In mining, a large industry in Africa, many technology providers are improving operations through the use of software solutions that leverage highly sensitive sensors that automate operations above and below ground. And Transnet, South Africa’s public transportation (trains, rail and ports throughout Africa), is now building trains with global players like GE to fully integrate IoT software as part of the train to improve efficiency and performance, which is also an example of an emerging IoT software platform.

As we are about to kick-off Gartner Symposium/ITxpo in Tokyo this week, I’ll be sharing the lessons I learned from my time with CIOs in Africa. CEOs, CIOs and business leaders all around the world can undoubtedly learn a lot from our colleagues in Africa in the art of mastering lean digital techniques to drive innovative solutions


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Peter Sondergaard
Former Executive Vice President, Research & Advisory
25 years at Gartner
29 years IT Industry

Peter Sondergaard was an executive vice president and member of Gartner’s operating committee. He led the company’s Research & Advisory organization until August 2018.

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