How Digital Transformation is helping African businesses survive

May 27, 2016 • Enterprise, Opinion, Top Stories

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How Digital Transformation is helping African businesses survive. (Image Source:

Standard & Poor’s predicts that the South African economy will grow by only 0.8% in 2016. Three different finance ministers in four days, a downward trend in its stock market, and plummeting currency values are all contributing to the slowdown.

Despite the grim predictions, South Africa’s enterprise software market is growing. According to Gartner, IT spending in South Africa is expected to reach $26.6 billion in 2016, an increase of 5.1 percent from 2015.  IDC also believes that in 2016, South African organizations will invest more in digital transformation initiatives to streamline their costs and improve their flexibility.

There is a good reason for the increase in IT costs. Automation saveslabour, energy and material costs that can help reduce expenses to help keep companies profitable even in a recession.

Here are examples of how African businesses are succeeding with digital transformation:

1. Reducing Errors – Manual processing is costly and slow, and can lead to inconsistent results and a high error rate.Many companies have enhanced their customer-facing, front-end operations with digital solutions. Internet banking, for example at Standard Bank, offers consumers convenience while reducing labor costs and improving data accuracy.

2. Speeding Payments – Boloro provides mobile payment solutions in South Africa, enabling quick check out and a safer alternative to carrying large quantities of cash.

3. Reducing Labor Costs – Smart meters are being used to measure household utility usage in Johannesburg, putting meter readers out of business.Similarly, robotics are replacing many of the manual tasks on South Africa’s automotive assembly lines.

4. Improving Safety – South African mining companies are using sensors to detect methane and rock movement, fuel pipelines have been fitted with sensors to monitor leaks.

5. Lowering Inventory Costs – Health care organizations are using radio-frequency identification (RFID) tags to monitor their equipment inventory, reducing over-purchasing and equipment rental costs, increasing equipment utilization, and reducing equipment loss.

6. Increasing Manufacturing Efficiency – South African bulk wine producers have ordered automation technologies, valued at the price of ZAR 18 million, from Germany to improve plant production efficiencies.

7. Increasing Agricultural Yields – Fruitlook allows farmers to build up a long-term database of growing parameters, enabling them to compare different orchards or vineyards as well as trends for different seasons. It also allows farmers to benchmark themselves against each other and identify ways to improve production efficiency.

Digital transformation is increasing efficiency and reducing costs for agriculture, banks, utilities, mining companies, manufacturers and healthcare organizations across South Africa. Automation can make companies more profitable and competitive, resulting in greater demand for their products which can translate into more jobs and contribute to an economic turnaround.

Whether it’s automation in the way of robotics on the manufacturing floor, or automation features which eliminate manual process, or automation features that provides data on mobile devices, businesses need robust and versatile application development and integration platforms. And those that can work together make the digital transformation process even easier and more cost effective. Those businesses that undertake digital transformations are most likely to thrive, especially during an economic downturn.

By Lindsay Britz, Marketing Manager | Magic Software SA

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