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Platform Economy Of The Future, Pathway To Drive Growth, Jobs Across Africa

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William Mzimba, Chief Executive of Accenture South Africa and Chairman of Accenture Africa

By William Mzimba

Many companies, whether they realize it or not, have already taken steps to embed themselves into the digital ecosystems that will drive their growth in future.

However, the pace of adopting new digital platforms for doing business needs to increase – especially in Africa. These platforms are business models that create value by facilitating exchanges between two or more interdependent groups, usually consumers and producers.

According to the Wall Street Journal platform companies are major drivers of innovation as the top companies set the standards for the digital transformation taking place around the world. Traditional companies are challenged to keep up or risk being left behind. As platforms become the new normal for how business is done, African companies must seize this opportunity to begin to build a new digital value chain.

Already, more than a quarter (27%) of the executives Accenture recently surveyed report that digital ecosystems are transforming the way their organizations deliver value. And we found that 81% of executives say platform-based business models will be core to their growth strategy within three years.

The mandate for leaders is to capitalize on new relationships, building a network of digital partners that will not only enhance their existing business, but also allow them to forge their way into newly emerging digital ecosystems.

What we are seeing is that entire ecosystems of customers are aggregating around several new digital platforms, and businesses are more motivated than ever before to take advantage of these entry points.

Communication platforms like WeChat and WhatsApp, and Artificial Intelligence intermediaries like the Google Assistant, Alexa, and Siri represent distinct ecosystems delivering unprecedented access to customers – and businesses are flocking to them.

A couple of examples include Hyatt Hotels, which uses Facebook Messenger to let guests do everything from booking and checking existing reservations to ordering room service during a stay, while Capital One bank developed a ‘skill’ for Amazon Echo’s Alexa, allowing people to check their accounts and pay credit card bills via the Echo device.

It is little surprise that the trend two of our Tech Vision 2017 study highlights that in the State of the Cloud survey 95% of respondents reported using public, private, or hybrid cloud technology, while the CIO Strategic Partner Index run by the IDC reports that 29% of IT leaders are spending more than half their IT budget on external providers. Each platform commitment means easier future engagement with other companies on the platform using the same infrastructure.

However, of the 176 platform companies included in a recent report, The Rise of the Platform Enterprise: A Global Survey led by Peter Evans and Annabelle Gawer and sponsored by the Center for Global Enterprise, Asia has the largest number with 82, 64 of which are in China. North America has 64, with 63 in the US.

Europe is a major consumer of platform services, but it’s home to relatively few platform companies –27 spread across 10 countries, 9 of which are in the UK.

It is concerning Africa and Latin America have a number of small platform companies, only 3 of which have met the $1 billion valuation threshold for inclusion in the survey.

More African companies need to decide which ecosystems to join and which roles to play as the technology changes are only the beginning.

How do African companies begin to close the gaps? An important way to get moving on this journey is to conduct an audit identifying how many internal and external platforms you are using and the goals for their use. Identify and address unnecessary overlaps.

Determine the platforms your organization most relies on, as well as those that most depend on you. These are the ecosystems where your organization should hold its strategic and market strengths.

Over the next 100 days, look to essentially develop a comprehensive strategy to establish the foundation for your platform business model and ecosystem.

During this phase you should appoint a C-suite sponsor to oversee a team that is responsible for championing your new ecosystem and digital partnership strategies.

Then ever the next year, leadership should have achieved comprehensive understanding of the new rules of business, developed a platform business model strategy, and started to test it with the launch of a small pilot program.

Companies should keep expanding the conversation: for instance, in the first 100 days have a strategy summit with your closest partners to understand their goals for the future. Uncover shared goals and commit to developing a strategic plan for achieving them together.

Consider your organization’s future through the lens of the biggest disruptions shaping your market, from inside and outside your industry.

Craft the ideal role of your company in this future, and develop a shortlist of partners who can help make it a reality. And remember to develop metrics to quantify the results of ecosystem participation.

Many global brands are already taking the bold steps needed. The digital ecosystem is, for instance, totally redefining what automakers do. Rather than just building cars, they’re engaging with customers throughout the vehicle lifecycle, directly managing software upgrades, diagnostics, and safety.

In the insurance industry, pulling down driving data from connected car platforms has enabled new services such as pay-per-mile insurance with newcomers like Google and Metromile to challenge the industry status quo. The opportunities are endless, no matter what industry you are in.

General Motors kicked off 2016 with a $500 million investment into ride-share platform Lyft. The move gave GM the inroads to launch their Express Drive service, an exclusive offering for successful, but car-less, Lyft driver applicants to rent a car directly from GM and get to work right away.

The program was remarkably successful in the short term, opening a new line of business for GM: by July, 30% of new Lyft drivers were requesting an Express Drive vehicle in their sign-up.

In addition to partnering with Lyft, GM also made a $1 billion-plus acquisition of the autonomous vehicle software company Cruise Automation, and another billion-dollar investment in building an autonomous vehicle testing facility in Detroit.

This shows how platforms are rapidly becoming the central hubs for the rich and complex digital ecosystems that companies want to access. Consider the fact that 70% of ’unicorn’ startups (over $1 billion!) are platform companies.

Other companies such as personal car-rental app Turo and group dining experience Feastly have introduced their own offerings, as have dozens of start-ups, each with their own angle and offering. LiquidSpace, which lists offerings in more than 500 cities across the US, Australia and Canada, offers a platform for renting workspaces and meeting rooms by the day or hour.

In South Africa, a good example of a company embracing the platform economy and reaping rewards is Discovery Vitality, while Discovery’s proposed bank is another example of the evolution of this concept into other exciting sectors.

The retail market for consumer goods in SA received a shot in the arm in 2015 when Kalahari was merged with Takealot, with the technology platform cleverly harnessed to drive growth since then.

Remember the sharing economy brings people together through technology to exchange or rent access to goods and services, so entrepreneurs are building this economy by leveraging emerging digital technologies to meet customer needs in new and disruptive ways.

Digital and mobile technologies have combined with public support to create a host of opportunities to transform the way government manages the infrastructure it has already acquired. For instance, through MuniRent, six local governments in Michigan are already renting equipment to and from each other.

How African companies and governments react to this change brought about the platform economy will define their prospects going forward.

The platforms they use will serve as the pathways to the new digital economies that will drive growth and jobs across the continent. They will form the pillars of entire value chains in the future and so African companies need to ensure they make these decisions wisely – and fast because there is no doubt that the digital partnerships African companies make today will determine how successful they will be tomorrow.

Platform economy is one of the topics to be discussed at the Accenture Innovation Conference taking place on 17 October in Johannesburg.

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E-Business

Go Rentals Targets Nigeria in African Operations Expansion Plan

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At its annual partner results event this week, Go Rentals CEO Evan Berger announced its 2018/19 expansion plans into Africa for its Technology Rental services.

“Our pilot expansion began in 2016/2017, fuelled by a multinational client’s need to train thousands of staff on SAP throughout Africa and Southern Africa, and was missing a cost-effective hardware solution.

The key driver for selecting Go Rentals for this project was reliability and our ability to handle complex logistics for moving IT hardware,” says Berger. “Working on the continent presents many challenges in import/export, technical skills, asset tracking, contingency planning, just to name a few challenges our innovations addressed.”

2017 saw the roll-out of projects in Namibia, Zambia, Angola and Lesotho in 2017, with infrastructure projects already completed in Botswana, Swaziland, Nigeria, Botswana, Mauritius, Madagascar, DRC, Ghana and Uganda.

“Through the partnerships established in these regions, we are now expanding broader operations,” says Managing Director Clayton Heldsinger.” The expansion at this stage focuses on providing IT infrastructure for large-scale training projects, elections, and other temporary infrastructure requirements.”

Temporary infrastructure projects are largely considered infeasible in many regions due to the lack of availability of stock, challenging logistics, high costs and availability of skills.

“Unlike service delivery to an office environment, where project delays are common, the number one factor to consider in a special infrastructure project like training or an election is that the event must happen on the given day,” says Heldsinger.

“The IT costs pale in comparison to the investment the client has made in venues, human resources, travel and accommodation costs and more. Our IT has to be ready, and we know how. ”

“Using our expertise, systems and blueprint developed in South Africa, we began doing the same in other countries throughout Africa, with remarkable success,” explains Berger.

Go Rentals has a winning formula for delivering temporary projects that require challenging logistics. These include mass training infrastructure, national elections, World Cup, temporary offices, rural installations and other projects.

If your corporation has a requirement for reliable infrastructure supply, delivery and support in Africa, contact Heldsinger or Ron Keschner, Sales Director at Go Rentals.

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IBM Study Unveils Hidden Costs of Data Breach

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IBM Security has released a global study examining the full financial impact of a data breach on a company’s bottom line.

The study found that hidden costs in data breaches — e.g., lost business, negative impact on reputation and employee time spent on recovery — can be a huge factor. In a “mega breach” of 1 million or more records, one-third of the cost derived from lost business.

And the cost is on the rise; since the 2017 report, the average cost of a data breach globally has increased 6.4 percent, to $3.86 million, according to IBM. The number of mega breaches is also up — from nine in 2013 to 16 in 2017.

The study, sponsored by IBM and conducted by Ponemon Institute, also reveals that:

– Average cost of a data breach involving 1 million records is nearly $40 million.

– Estimated cost of a breach involving 50 million records is $350 million.

– Average time to detect and contain a mega breach (365 days) is 99 days longer than for a smaller-scale breach.

– In a mega breach, the greatest cost is from lost business, estimated at nearly $118 million for a breach of 50 million records.

A major factor in lost business cost is customer turnover — a recent IBM/Harris poll found that 75 percent of consumers in the U.S. say that they will not do business with companies that they do not trust to protect their data.

“The truth is there are many hidden expenses which must be taken into account, such as reputational damage, customer turnover, and operational costs,” said Wendi Whitmore, global lead for IBM X-Force incident response and intelligence services. “Knowing where the costs lie and how to reduce them can help companies invest their resources more strategically and lower the huge financial risks at stake.”

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Global Accelerex Trains Nigerian Security Agencies on Cyber Crime

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Global Accelerex Limited, a Central Bank of Nigeria-licenced Payment Terminal Service Provider and Payment Solution Service Provider, as part of its Corporate Social Responsibility Program, is set to train members of Nigeria’s Security Agencies on Cybercrime.

The event, which will hold on July 25, 2018 at Ladi Kwali Conference Center, Sheraton Hotel, Abuja, will enrich participants’ knowledge of the cyberspace and increase their versatility in dealing with on-line crime.

This collaboration, first of its kind in the e-payment industry, is borne out of the company’s desire to rid the nation of cyber criminals who continue to bring the country’s name into disrepute.

In addition to learning about cyber vulnerability, attendees will also learn about insider threats and sophisticated cyber adversaries.

The forum will host more than 30 participants including officials of the Nigerian Police, Nigerian Armed Forces, Economic and Financial Crimes Commission, Independent Corrupt Practices Commission, State Security Service, National Intelligence Agency and National Drug Law Enforcement Agency.

Others are Nigerian Security and Civil Defence Corps, Defence Intelligence Agency and Nigerian Custom Service.

“We applaud the effort of the Nigerian government in combating cybercrime and securing lives and property in the country. Global Accelerex is driven to compliment this effort to ensure that Nigeria is rid of these miscreants so that citizens can enjoy the cyberspace with the peace of mind they deserve.

It is absolutely critical that we support security operations so that Nigerians can use the internet freely, which is why this training is vital”, stated Stanley Peters, Chief Technology Officer of the company.

The National Security Adviser commends the initiative by Global Accelerex, saying that the move will definitely impact positively on the officers and the nation in general.

He added that continuous training is critical to stay ahead of criminals even as he revealed that attendees have shown a high level of enthusiasm at this unique opportunity.

Keynote speakers that will bring their experience to bear are Mr. Tahmeed Rab, Co-Founder and Managing Partner of Kaizen Solutions Group, Baltimore, USA and Mr. Peter Obadare, Co-Founder and Chief Operating Officer of Digital Encode.

Both experts are acclaimed for their ground-breaking achievements in cyber security, risk and compliance, mobile forensics, network and system consulting.

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