It might come as a surprise, but South Africa’s ICT sector already has more clout than the agriculture industry—and the sector is ripe for further growth and development, provided that executives get behind the programme. But be sure to look before you leap onto the digital wave rolling through Africa.

According to a report by Stats SA, in 2014, the combined yield of the South African agriculture industry (from livestock production to horticulture), contributes just over 2,4% to GDP, whereas ICT added 2,7% (R93 billion): “For every R100 that the economy produced in 2014, R2,70 was due to activities related to ICT,” states the report, adding that “just over two-thirds of the R93 billion was a result of activities related to telecommunications services that include, among other things, private broadcasting and cellphone services. The remaining third consisted of computer services (e.g. data processing and software development), manufacturing of ICT equipment (such as electronic components and devices), and activities related to the development of content and media.” Since the report was published, the playing field has altered in favour of ICT.

“The South Africa ICT Outlook”, a 2017 study from Frost & Sullivan's IT Services & Applications Growth Partnership Service programme, finds that “an increase in affordability of Internet and telephony services, as well as a growing adoption of the latest technology business models by companies, is attracting significant investment into the South African ICT industry. Aggressive service diversification, along with strategic partnerships and acquisitions, are altering the industry landscape, compelling market participants to gauge market trends and growth opportunities before designing their services.”“ICT companies are creating new revenue streams through the offer of software-defined data centres, flash storage, cloud-based mobile apps, non-core outsourcing and business intelligence," said Frost & Sullivan Digital Transformation Senior Research Analyst, Deepti Dhinakaran. "This culture of innovation is impelling start-ups to establish themselves in the ICT industry, while the enthusiastic adoption of end-to-end IoT solutions has encouraged telecommunications providers to introduce mobile app-based services. Successful mobile apps, such as ride-hailing and m-commerce, are accelerating the overall revenue growth of the industry."

The report cites several additional factors that are accelerating change in the South African ICT industry, including “maturing 3G technology and ubiquity of 4G networks; increasing demand for video-on-demand (VOD) services; availability of affordable digital terrestrial television (DTT) services; demand for platform as a service (PaaS); and higher relevance of cloud, big data, analytics and Internet of Things (IoT).”As noted by Dhinakaran, "The convergence across telecommunications and entertainment markets, combined with the growing uptake of managed services, software-defined wide-area network technology, and consultation-driven BPM service delivery models will propel market growth. In the managed services segment, there will be greater demand for network and application security services due to the need to improve compliance and security efficiencies."

Digital transformation

The software-defined data centre (SDDC) holds the key to the IT infrastructure of tomorrow. This is according to Lutz Blaeser, Managing Director of Intact Software Distribution, who explains that the SDDC enables total infrastructure virtualisation. In contrast to traditional data centres, which manage infrastructure through devices and hardware, management is totally automated, and hardware configurations are maintained by intelligent systems.“For really innovative businesses, it’s already here, bringing compelling benefits such as lower costs, and increased productivity and agility, as it has been designed to offer faster speeds and flexibility by enabling IT services to be provisioned more quickly to users,” says Blaeser. This points to the need for a software-defined approach to security.“As businesses across every industry are looking to transform their data centres through software-defined technology,” comments Blaeser, “they need to relook at how they are securing this software-defined world, as traditional security measures won’t necessarily do the job. Security is an essential enabler of this change. It needs to be embedded in the very fabric of the SDDC.

“The main aim is to ensure that correct controls and measures stay in place, irrespective of whether the application resides on- or off-premise. Traditional information security infrastructure is too fixed to support the fast changing and rapidly evolving threat landscape we see today. Businesses need to adapt their security postures to include and support the more dynamic and agile SDDCs we see today.” When moving towards an SDDC, businesses are advised to implement a software-defined network (SDN), which is integrated with security services and can communicate with the network controller.“Businesses should also implement a security architecture that takes advantage of both the virtualisation and orchestration features of the SDDC to simplify and automate the provisioning of security policies and protections, as well as any compliance requirements.“At the end of the day, security needs to evolve in order to support increasingly dynamic and adaptive SDDCs. In the long term, what will drive adaptive security infrastructure will be models that are ‘software-defined’, that will have the ability to mitigate and defend against the continually evolving and highly targeted threats we are seeing today,” explains Blaeser.

Technology of choice

Hard drives are being pushed out of the market by flash memory-based solid state storage devices (SSD), which are faster, quieter and more reliable, with better performance. Information is stored in an array of memory cells made from floating-gate transistors. Two types of flash memory (NAND and NOR) allow information either to be written to and read from in blocks or independently.According to Robert Fan, President of NAND controller developer Silicon Motion, “SSDs are taking over the whole category now and we’re seeing with Seagate and Western Digital that their hard disk market is declining”.Fan cites four benefits of using NAND, notably improved performance (flash moves the data quicker), higher reliability (flash is better able to withstand shocks, high pressures and temperatures) less noise and lower power consumption. The flash controller acts as an interface between the processor and flash memory device.“The controller interprets the host microprocessor’s instructions; for example, ‘accept these 10kbit of information for storage in 10k locations’, and it decides where in the flash memory to store the information. It then retrieves the information when requested.”Client SSDs, built for the consumer market, are a key growth area. Further applications include automotive, medical, factory automation and Point of Sale systems.

Industrie 4.0

A new wave of digitised and connected automation technologies is revolutionising the industry, promising to improve practically any process, with significant economic growth and job creation potential. Coined in Germany, Industrie 4.0 is the catch-phrase for this trend. According to Frikkie Streicher, Business Development Manager at VEGA Controls SA, and a participant at the upcoming Africa Automation Fair and Connected Industries, automation has applications far beyond manufacturing. Homes, farms, petrochemical plants, or “wherever there is a process, automation can improve it,” he says. “Our instruments are used in a wide variety of applications—from car service stations through to Sasol plants. We even have farmers using our technology to measure and help control their irrigation systems and water supplies; and we have collaborated with North West University on research around water saving technologies for drought-stricken areas of the Northern Cape.” According to another participant, Marc Van Pelt (Managing Director of Pepperl+Fuchs Africa and a member of the board of the European Chamber of Commerce, SAIMC and IIG), not all automation is the same: “Older cars, for example, are partially automated: they have a few dashboard controls making limited data available. But a fully connected car with advanced automation technologies does so much more—it tells you proactively when to go for a service, replace brake pads and so on. Not only is the availability of the car significantly improved, but also cost controls and efficiencies are improved. Germany’s Industrie 4.0 trend is about making automation systems more efficient and achieving faster and smarter responses. If you apply these principles to automation processes in manufacturing plants, the benefits are significant.”To ride this wave, however, South Africa has some catching up to do.

“The majority of US manufacturers believe that Internet of Things (IoT) will have a significant impact on their businesses over the next five years, but fully one-third has no plans to develop a strategy to apply these technologies,” notes Barry Elliott, Managing Director Sub-Sahara at Rockwell Automation. “Add to that roughly another third that is planning to develop a strategy, this leaves you with less than one-third of manufacturers that have a strategy in place and are some way through the implementation thereof. “Putting this into a South African context, and assuming similar numbers, then progress is pretty slow. If one assumes a slower progression than the US, the numbers naturally look even worse. That being said, South Africa has a myriad of multinational manufacturing organisations that have operations in South Africa. As these companies typically compete on a global stage, their progress in deriving value from IoT technologies can be quite high. This is heavily dependent on the industry sector they fall in, though,” says Elliott.“The implementation of an IoT strategy and the technologies that may be required to do so is very much an executive decision because organisations will often have to implement significant change management strategies to derive significant benefits. And these aspects are all about people and organisational processes, and have little to nothing to do with technology.

Leadership and Digital IQ

When it comes to digital investment, executives need to do more to drive change. The 10th edition of PwC’s Global Digital IQ survey reveals that “C -suite engagement in digital investment has grown in the past decade, but a large portion of chief executives are still behind when it comes to being the change agents. In 2007, one-third of companies said their CEO was a champion for digital, but that number remains surprisingly low when CEOs are responsible for staving off disruptors and driving transformation—even in 2017, only 68% of respondents (Africa: 65%; South Africa: 50%) stated their CEO championed digital. On top of that, many respondents said other senior executives remain disengaged from digital transformations.” Commenting on this phenomenon, Tielman Botha, Digital Lead for PwC South Africa, says, “Today, the scope and scale of digital-driven change has grown significantly, and organisations have invested a lot of time and money to keep up. CEO and CIO support is critical to developing successful digital initiatives, along with attention to human factors.”

Today, tech talk centres on the “essential eight” emerging technologies, namely “the Internet of Things (IOT) and artificial intelligence (AI), the foundational elements for the next generation of digital; robotics, drones and 3D printing, machines that extend the realm of computing power into the material world; augmented reality (AR) and virtual reality (VR), which merge physical and digital realms; and blockchain, a new approach to the basic bookkeeping behind commercial transactions.” Unfortunately, “most companies are not better prepared in 2017 to adopt emerging technologies than they were a decade ago. African executives are focused on digital innovation, but may not have the processes in place to execute on strategy: 87% say identifying opportunities to digitise their enterprise is a critical part of their innovation process (vs. 79% of others), but only 63% take a systematic approach to evaluating emerging technology (vs. 76% of others).” Clearly, leaders need to enhance their Digital IQ if their companies are not to fall behind.“It is vital that companies invest in digital solutions if they want to be successful,” comments Botha.It is even more important that they think through how their investment in digital can drive new business models and financial results.“Having a high Digital IQ is about integration, and requires fitting together the pieces of the puzzle—the business, the customer and employee experience and the technology—to build one cohesive and transformative solution. This is what will give a company the competitive edge,” adds Botha.


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