by Heath Muchena

Rethinking IT investment and innovation for post-coronavirus Africa

May 31, 2020
BudgetingIT LeadershipIT Strategy

Africa-based tech leaders explore the way forward for doing business in the post-COVID-19 era as companies prepare for the reopening of economies.

Innovation often emerges where there’s the greatest need.  Organisations in African markets, which typically face challenging economic conditions, tend to prioritise solving the most pressing societal problems – and this is why opportunities for tech leaders may arise as sub-Saharan Africa emerges from the coronavirus pandemic into an uncertain economic environment.

In addition to investments needed for improving infrastructure resilience – a longtime issue in the region – the pandemic has highlighted the need, and increasing demand, for cloud-based services and platforms, secure remote access, and online-enabled operations.

“Due to the lockdown, we had a spike in customer support requests so we decided to put the FAQs together and we’re currently training a chatbot using IBM Watson assistant to respond swiftly to such questions and complaints,” said Okeke Ebere, IT support engineer at Lagos-based Nowtech Enterprises, a PC and service supplier. “The Watson assistant will be integrated into WhatsApp, our Facebook page and website.”

This will allow the business to automate customer services. “IBM Watson assistant hosted on IBM cloud will be used for the backend. WhatsApp, Facebook bot, and the chat section on the website will be used for front end. The WhatsApp chat integration is done with botkit integration. We are also looking at integrating with other chat platforms using botkit,” Ebere said.

Here’s what investing in a post-crisis looks like

 As lockdowns ease, the immediate priority for tech leaders in times of economic turbulence is helping their businesses stay afloat.

“CIOs have moved into emergency cost optimization which means that investments will be minimized and prioritized on operations that keep the business running, which will be the top priority for most organizations through 2020,” said John-David Lovelock, distinguished research vice president at Gartner in a press release accompanying the market research firm’s latest IT spending forecast.

The forecast calls for an  8 percent global decline in IT spending. The study did note however,  that  remote working will grow, and public cloud services will be a bright spot, growing 19 percent in this year. Cloud-based telephony and messaging, and cloud-based conferencing will also see high levels of spending, growing 8.9 percent and 24.3 percent, respectively.

Other researchers agree that cloud spending will rise. According to research by IDC, public cloud spending in the META region (Middle East, Turkey and Africa) will increase to $2.8 billion this year, as demand rises following the spread of COVID-19. This figure is expected to rise to approximately $6.5 billion by 2024, a compound annual growth rate (CAGR) of 24 percent, up from the 22 percent rate that was projected prior to the coronavirus outbreak.

“While the COVID-19 pandemic has brought unprecedented levels of disruption to the region, it has also shone a light on the critical role that digital transformation (DX) plays in ensuring business continuity,” said IDC’s Jyoti Lalchandani, group vice president and regional managing director for the Middle East, Turkey, and Africa, in a statement accompanying the spending report.

IT leaders go beyond cost-cutting

This means that in the long term, tech leaders need to play a role that goes beyond achieving cost cuts.

“It’s now a basic requirement for a CIO to be able to talk business, read financials, be familiar with risks, governance, compliance and laws and regulations that govern the industry that the company operates in,” said Nkosenhle Ngongoma, CIO at South Africa-based Ascendis Health. “We are expected to contribute meaningfully to the business discussion on strategy and provide business solutions that are supported by technology; not technology solutions that business needs to conform to.”

 IT leaders will need to adapt their strategies and roadmaps to accelerate digital transformation, taking into consideration their business industry requirements and specifications. “Technologies and solutions are changing quickly, so the main considerations should be to promote new ways of thinking, increasing security controls and solutions, deploying collaborative tools and moving to the cloud,” said cybersecurity expert Tarik El Khamlichi, former IT director of Accenture based in Casablanca.

“The risk of cutting IT budgets, freezing critical IT spending, could lead to revenue loss, so there’s a need to boost IT spend,” El Khamlichi said.

According to a recent report by the G7 group of indisutrialised nations, digital technology will drive innovation, economic growth and job creation in many key sectors of African economies. “This will allow greater interconnection of African markets with one another and with the rest of the world,” the G7 report states, adding that the task of governments and major institutions is to improve the “enabling environment,” encouraging private sector investment and funds.

“Technology enables far more than just operational efficiency,” agreed Yoav Tchelet, chief technology officer at Johannesburg-based Amrod, a provider of corporate-branded clothing and gifts.

Maintaining trust with customers is essential

Most African companies also acknowledge that aspects of their businesses that will be disrupted by technology represent opportunities for them to gain or lose trust among clients and customers. This is why trust is becoming a 360-degree challenge across the many dimensions of an organization’s technology, processes, and people, according to Deloitte’s Tech Trends 2020 report. As a result, new processes that promote innovation and bring about a flexible approach to funding technology investments have to be developed in the areas of budgeting, contracting, and capital planning.

Tech vendors on the continent are taking note, taking into account a broad range of factors when approaching a market.

“When it comes to determining which African markets are fit for SaaS products, we take into consideration factors like internet penetration, social media usage, and mobile adoption,” said Julia Nill, enterprise solutions director at Meltwater, a SaaS company that develops media monitoring and business intelligence software. “With over 10 years of experience in Africa, we appreciate that business here is done based on trust. Unlike in developed markets where things lean more towards self-serve, African markets more often than not prefer conversations to happen in person. This is why we have local consultants that travel to meet clients in countries across Africa”

According to the African Innovation report from the Harambeans Africa entrepreneurs alliance,  there will be opportunities for multinational scaling of solutions since local use cases are typically relevant in other markets across the continent.

On their part, tech vendors will have to balance broad trends with local needs and conditions.

“Sub-Saharan Africa is a strategic, high-growth region so supporting customers in migrating from on-premise business software solutions to smarter cloud-based solutions is essential,” said Michelle Bisset, vice president, Customer Success, for  Sage Africa & Middle East. “It’s important to be on-the-ground as much as possible as this helps companies directly understand local pain points while allowing them to deliver local and relevant consultation and products or services.”