Digital initiatives could present an R5 trillion opportunity for South Africa

04 February 2019 Consultancy.co.za

A new report by global management consultancy Accenture – prepared in collaboration with the World Economic Forum (WEF) – has revealed that nearly a hundred targeted digital initiatives spanning a number of public and private sectors could generate value of as high as R5 trillion in the next ten years.

South Africa is a country that stands to simultaneously lose and gain substantially with respect to the rapid rise in digitalisation. The country suffers from a high rate of unemployment – nearly 30% – and is at risk of losing nearly 6 million jobs to automation and artificial intelligence (AI).

On the other hand, the country is home to a number of budding enterprises that are not only looking to embrace an innovative approach to growth, but are also increasingly coming to terms with the costs of implementing industry 4.0 applications within their business operations.

Total value-at-stake for public sector

In this regard digitalisation offers a substantial opportunity for the South African market in the near future. Accenture has been particularly active in promoting an innovative spirit in South Africa, and has now come up with analysis of just how much the country stands to gain if digitalisation is done right.

The firm has developed what it terms as the ‘value-at-stake’ model in collaboration with the WEF. The model examines the potential of digitalisation across the government and business sector and offers ten-year predictions of possible benefits therein, offering a framework for strategising for a digital future.

Digital initiatives considered under this model include transport initiatives such as autonomous vehicles, predictive data analysis, “remote healthcare” and even drone technology. Uses for these initiatives span the industrial sector, consumers and overall society.

Total value-at-stake in the private sector

The model is also comprehensive in terms of its consideration of various levels of the supply chain, and incorporates nearly 80% of all revenue generation systems. “The framework also quantifi es Digital Value to Society (DVS) by aggregating the key performance indicators that measure the impact of digitalisation on health and safety, employment, the environment, labour and consumers,” explains the report.

The areas of potential investment identified by the value-at-stake and DVS frameworks create room for collaboration among various industries and businesses. If such collaboration is conducted in a focused manner, the report predicts that South Africa could add as much as R5 trillion to its economy over the next decade.

Specifically, the report puts forth 96 initiatives that could accelerate growth across all sectors in the country, public and private. In the government domain, the consulting firm identifies five areas in particular that could be lucrative digital markets in years to come.

Three areas of digital advancement

These include public infrastructure, where the total value at stake is as high as R727 billion, R574 billion of which comprises the value added for society. Other lucrative government areas include public administration, public healthcare, safety & security and social services, all of which combine to contribute just over R1 trillion.

In the private domain, the financial services sector is the most promising area for digital investment, with a value-at-stake of nearly R1.3 trillion. Other sectors that follow at some distance include agriculture, manufacturing, consumer industries, metals & mining, utilities, oil & gas, telecoms and media. 

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Digital transformation is more than just a question of adopting new technology

10 April 2019 Consultancy.co.za

While branding is an important aspect of creating a digital profile, true digital transformation entails the integration of technology into each and every aspect of business operations, according to CEO of Hoorah Digital Shaune Jordaan. The latter strategy is crucial to remain competitive in today’s markets.

Jordaan presents the example of Naspers as the epitome of a contemporary digital organisation. According to Jordaan, Naspers has remained ahead of the curve at every step when it has come to digital disruption, primarily by ensuring that every aspect of its operations are digitally enhanced.

The strategy to achieve such a degree of digital transformation includes a combination of innovative practices and inorganic growth. Jordaan’s claims are consistent with those being made by a number of experts regarding the South African market, all of whom agree for the need for innovation.

Even the skills and talent within an organisation must be aligned with the digital orientation of the firm, if an epidemic of unemployment is to be avoided. Nevertheless, the current scenario in South Africa still reflects a cautious approach to digital transformation, with integration being managed one step at a time.Digital transformation is more than just a question of adopting new technology

Although embracing digital integration despite the high costs associated is a big step for some small enterprises in the first place, Jordaan argues that this approach is not enough to remain competitive in the contemporary scenario, particularly as new firms are emerging that are entirely reliant on digital mechanisms.

“For far too many South African companies, the solution to this threat is to tackle one aspect of digital at a time. They might, for instance, engage a digital agency to ensure that they have a good online presence. Alternatively, they might update their IT systems and digitize some of their processes, or throw up an ecommerce store,” says Jordaan.

“What companies should instead be looking for are digital consultancies, staffed with people who are up to date with the latest digital technologies in a variety of fields and can spot opportunities as they emerge. These consultancies will also act more like a partner than a service provider, ensuring that your business’ needs are best served,” he added.

Since its establishment in 2018, Hoorah Digital has been aspiring to become a consultancy of this precise nature. The firm has expanded in scope both in terms of service offerings and in terms of geographical reach, and has won a number of lucrative contracts to become a digital partner to major firms.