Digital Disruptors

Eight Big South African Digital Disruptors

At the recent Digital Disruptors Conference at GIBS Business School, South African industry leaders spoke about disruptive approaches to their business models.

Google

South Africa’s “mobile moment” happened in late 2014 when internet searches from mobile devices exceeded for the first time those performed on desktops. By 2020 there will be 500 million people in Sub Saharan Africa with connected smartphones, setting the digital agenda for multiple industries.

So explained Google SA Country Director Luke Mckend who also admits his daughter helped him set up his new phone. As a digital native she is one of 100 million people in Sub Saharan Africa who have smartphones and expect digitally frictionless services.

Google plans to connect this exponentially growing digitised population through Project Loon which is setting up high altitude balloons sending down LTE bandwidth to devices.

He explained that universities in Kampala became connected to the internet through their internet fibre project which transformed educational business models in the surrounding communities.

Google search is also getting even better through natural language processing. Mckend demonstrated this through by making a voice request to Google for information about recent Olympic gold medallist Wayde van Niekerk.

Google responded to his questions contextually; just like having a conversation he did not have to repeat details in each interaction.

In some countries, up to 20% of Google searches are now being conducted by voice; my impression was that Google Now will quickly eclipse Apple’s equivalent called Siri.

Google is also helping build digital skills in Africa; they are engaging with communities to teach them how to properly interpret search results. Small businesses are benefitting from content creation workshops and developers are being trained to build innovative digital platforms.

Google is an early mover in Africa and is proactively building out the supporting infrastructure to be successful.

Microsoft

Is Microsoft a great innovator?

Conference host Chris Gibbons asked Nir Tenzer, Marketing and Operations Lead for Microsoft South Africa who reminded the conference audience about the Third Industrial Revolution which started in 1960 with the advent of the computer, a worldwide transformation that Microsoft helped to pioneer.

Tenzer believes the Fourth Industrial Revolution is commencing and Microsoft has a mission to:

“empower every person and every organisation on the planet to achieve more”.

They plan to accomplish this through a “mobile-first, cloud-first” strategy of three ambitions; reinvent productivity, create more personal computing and build the intelligent cloud platform.

Tenzer credited CEO Satya Nadella for driving an improved global culture at Microsoft through digitally savvy top down leadership.

Dimension Data

Is your business able to innovate continuously at the pace of digital change?

This was the challenge to business leaders from Alison Jacobson, MD of Digital Advisory at Dimenson Data. She stressed it cannot be an “IT-only” approach with Agile methodologies confined to software development teams, it must be enterprise agility starting from the boardroom and extending across the whole organisation.

You cannot DO digital and expect to achieve profitable disruption, you have to BE digital; Dimension Data have developed the “knowing-being- doing” model which they use to advise businesses on becoming digital.

She agreed with Microsoft’s Tenzer that you cannot put digital apps on top of analogue processes and expect digitally disruptive results. It requires much more fundamental change because “connected products require a connected company”.

Cerebra

Mike Stopforth from Cerebra explained why Snapchat turned down a $3Bn offer from Facebook; code is a commodity, communities are priceless.

Technology is shifting power away from the big institutions to the users of exponential growth networks; they are the nodes which drives the true value of peer to peer networks.

SnapChat’s users are the true millennials who don’t want to be tagged or followed by their parents on Facebook (who initially thought their “Poke” offering would beat SnapChat).

Cerebra publishes free ebooks on their website that solve business problems through digital principles. Many of these actually contradict industrial age hierarchical thinking that permeates the modern large organisation.

It’s about being willing to create the business that will destroy your business; are you willing to ringfence a group of bright people that will cannabilise your profit through autonomous, disruptive thinking.

Past success is the greatest barrier to continuous successful innovation; Stopforth emphasized we keep hoping that technology will solve the problem, it’s more about how new tech is used in the context of digitally disruptive cultures.

Barclays Africa

Barclays Africa CIO Ashley Veasey acknowledged that banks have traditionally made life difficult for their customers. His digital transformation mission in the last 18 months has been to improve customers’ experience of Absa’s banking products and services.

To drive this he encouraged new thinking and new ways of working; from Agile feature teams and rapid iterative software development to letting his 5000 staff dress in jeans and t-shirts.

They also built a team of highly progressive, digital rockstars such as Brett StClair, an ex Googler who has turned his digital disruption skills to banking.

New leadership also inspired long standing IT employees to move from a cubicle mindset to more collaboration; most people were technologically hungry for change and embraced new ways of doing things.

Veasey also created a team in the Absa Cape Town offices called Aliens; it employs surfers who write “killer code” and do their best work after a day on the beach.

This creative incubator works with the global Barclays Techstars initiative that accelerates innovation through networks of start-ups; they recognise 10 entrepreneurs every six months who they believe will drive digital disruption of banking.

One of these companies is BenBen that is already disrupting the real estate business in Accra by using drones to record and draw the land boundaries and lodge them on blockchain in conjunction with the land registry of Ghana.

In a recent cohort, Absa have recently signed contracts with seven out of ten incubated start-ups and Veasey said that through these networks they have witnessed an influx of digitally innovative skills onto the Southern African continent.

Watch Barclays Africa CIO Ashley Veasey talk about supporting Africa’s start ups with technology

A number of recent achievements at Barclays Africa point to the success of this journey thus far; a new look for their mobile app took 6 months to develop and was released to the market 5 months early.

Their website has a completely new look and feel on its landing pages and they are the first bank in the world to launch a banking service on Facebook messenger and Twitter which has had about 6000 transactions so far.

The landing page of the new mobile app is designed on the principle of cards which catalogue the products that a customer has with the bank – these can be swiped left or right depending on what the user needs to do.

Since they launched these new capabilities there has been a tenfold increase in app downloads and a twenty times increase in customer activity on their digital platforms.

Veasey was asked about the threat by Discovery to build a financial service – he complimented them on their disruption in the insurance industry and acknowledged how their data driven approach to setting up a banking stack was “stunning”.

He acknowledged that Absa are happy to be a utility service behind great brands that might be looking at the South African market to launch a banking presence.

From a regulatory perspective, SARB have very open minds about the digital disruption that is being anticipated, and cited the R3 Blockchain consortium of which they are the first South African participant to join but focused on ensuring there are benefits to the whole industry.

A critical enabler in their journey of tech transformation has been a CEO, Exco and board of directors who have the faith to invest in new technology, be experimental and “live through the ups and downs of digital disruption”.

Uber

Uber is another company whose name has entered common usage as a verb for personal transport. Local head of public policy for Uber, Yolisa Mashilwane explained that globally SA is one of the fastest growing markets for Uber beating even San Francisco and other North American cities.

Weekly requests for Uber in Pretoria have grown exponentially since it launched in May 2014.

Dissatisfaction with local public transport was cited in a recent survey as one of the main reasons for the dramatic growth in Uber requests; people highlighted driver behaviour, vehicle unroadworthiness and passenger overcrowding as key reasons to opt for the digitally slick and convenient Uber option.

More than 32% of people in Gauteng use cars for transport; this is Uber’s target market – many of these are people who own luxury vehicles but Uber research shows they don’t mind riding in a lower end Uber taxi if it is safe and convenient.

Metered taxi drivers are key stakeholders in Uber’s continued growth in South Africa; various taxi associations are open to doing things differently and understand the value of digital disruption in their industry.

Mashilwane explained that Uber drivers also score passengers, if you are rated a 1 as a passenger you will never be paired with that driver again; they believe in ensuring their drivers have favourable driving experiences.

Uber have also launched an open technology platform offering partner and driver relationship models where independents can join and take advantage of their technology platform.

Since inception, Uber has created 4000 work opportunities mainly for people from sectors that are actually losing jobs; an example of how employment is being created through digital disruption.

Uber Cash and Uber Eats are new disruptive models being rolled out that continue to evolve and innovate their business model into new services. As of Feb 2015 they had moved over half a million South Africans and these new products look set to accelerate this success.

Uber are also piloting taxi sharing which will address traffic congestion and safety risks through their advanced data models for passenger verification.

Uber Rush will offer quick and seamless deliveries for small businesses who aren’t able to invest in expensive transport networks.

Discovery

Jamie Whittaker is Head of Digital at Discovery and like any large organisation their client base runs from millennial “pesky whipper snappers” to more traditional consumers in different stages of digital evolution.

A customer’s online behaviour needs to be well understood in order to develop effective digital strategies and drones are likely to be significant disruptors.

Amazon PrimeAir uses drones to make deliveries, drones can bring medical equipment to remote patients and outdoor enthusiasts can even use drones to follow and film themselves.

Discovery has sold 90% of all Apple watches through its highly disruptive health insurance services and is actively investing in setting up a banking platform. CEO Adrian Gore has re-iterated this commitment and is actively hiring bankers and investing in systems although Whittaker declined to provide more detail about Discovery’s banking offerings.

Massmart

Massmart Group e-commerce executive Colin Fleming spoke about the future of digital retail in South Africa. Amazon has set the standard and are winning on price by reducing costs of working capital through innovative supply chains.

Amazon carries 130 million product lines and Walmart only 130 000; South African retailers need to figure out how they can stay relevant and avoid red herrings to become fully digitally enabled.

Massmart are focusing on doing this by building the right competencies and fundamental capabilities; they recognise that customer expectations are now being driven by the exponential organisations, such as Alibaba “the most valuable retailer, which has no inventory” (Tom Goodwin, Havas Media 2015).

Digitising the purchasing of fresh produce is the slowest of all commodites simply because “no app can squeeze an avocado”. Walmart is piloting an innovative grocery pickup process at a number of stores; in total they own 4000 within 20 minutes of 95% of their US target market and are confident about competing with Amazon.

Whittaker also spoke about the new CEO of Walmart who is a digital native and drives innovation from the top of the organisation.

Locally the culture at Massmart is receiving a lot of focus, management understands that their ambitious, innovative agenda requires people who understand digital and have the courage to use it disruptively.

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