Whitepaper: Accelerating the African Digital Sunrise
In the new Enterprise Africa whitepaper, we explore the key factors that are accelerating Africa’s enterprise applications and digital evolution. Read the introduction below, and download the full whitepaper here.
Africa’s Digital Sun is Rising
A confluence of cultural evolution, increasing user maturity around information technology and communications, a rising pervasiveness of personal devices, and the revelation of a massive marketing greenfield all point to a near-certain wave of new enterprise applications adoptions over the next five years and beyond.
How Africa’s Market Lag Has Sheltered an Emerging Greenfield
A greenfield market is one that is not over-run by prior cultivation. The term is derived from construction to reference unused land.
Precise figures are difficult to pin down, but most sources estimate that as few as 19 percent of African organizations have implemented enterprise applications. That leaves a lot of ‘unused land’ across the continent. A variety of reasons explain the gap between Africa and developed markets, but the predominant one is that most American and European multinational software and related services companies have historically been slow to enter the African market due to poor or partial recognition of the continent’s growth potential.
Their reticence now seems misplaced as there are two emerging silver linings to Africa’s lag in market penetration: The continent remains a relative greenfield for new enterprise software adopters; and unlike a large portion of the developed market installed base, Africans are not expressing disappointment or anger regarding what can fairly be termed their ‘complex legacy technology’. One key accelerator of the African digital sunrise is that new implementations of enterprise applications will skip the on-premises phase and move directly and seamlessly to the cloud. The lack of such impediments leaves African firms positioned with better agility for adoption of new business-centric technologies. Accelerated by the rise of cloud technology and maturing Software-as-a-Service (SaaS) ERP offerings, it is now estimated that upwards of 55 percent of African enterprises are endeavoring to adopt enterprise applications.
While technologies included in the group category of ‘digital transformation’ can be implemented in a standalone fashion, enterprise applications are the prerequisite for most. Thus, a healthy rise in the enterprise applications installed base should also lead to a rise in digital transformation projects such as mobility, big data, machine learning, Internet-of-Things, analytics, et al.
How the ERP Hangover is Hampering Matured Markets’ Enterprise Applications and Digital Transformation Progress
For some time, the North American and European markets for integrated enterprise applications supplied by vendors such as Oracle, SAP, Sage, Microsoft Dynamics and others have become saturated. The evolutionary wave to ERP and its inevitable expansions (customer relationship management, supply chain, human capital management and more) began in the mid 1990s and it is now estimated that more than 80 percent of large-scale enterprises already have some form of these applications in place. But there is a shadow hovering over that success in that an alarmingly high percentage of clients are less than satisfied with the results of their investments.
In October 2017 a survey of 890 CIOs and IT directors across 23 countries by Logicalis Group reported that 44 percent of respondents felt complex legacy technology is “a significant barrier to digital transformation”, second only to a more ambiguous “organizational culture” at 56 percent.
‘Complex legacy technology’ refers to enterprise applications. While myriad studies have been made concerning implementation difficulties or outright failures as well as post-implementation struggles, the most common sources of client disappointment in their complex legacy technology are:
- Client disappointment, however misdirected, of the nature of enterprise applications. “We thought it was an IT project and learned too late that it is a business process project.”
- Clients’ persistent underestimation of implementation complexity coupled with faulty business cases that hindered project progress rather than guiding it. “We know that we’ll be better off with this software, so why use measures?”
- A chronic failure to treat migration to integrated enterprise applications as a very long-term affair. “ We prepared for a wedding but not the marriage”
A report issued in January 2018 by Forrester Research and IBM cautions that “…rather than treat core enterprise applications as “old world” technology, they [executives] must invest in modernizing these systems to create an agile and flexible foundation on which ever-evolving digital capabilities can be erected.”
While a shift from on-premises enterprise applications to the cloud will help ease some of the legacy complexity, the majority of firms in the matured market are now struggling to move their applications off-premises to the cloud. Cloud deployment, in brief, is only approaching the full-scale, ubiquitous adoption touted by many vendors. Fully 70 percent of CIOs report that security concerns are the chief barrier to cloud adoption while in Europe, 56 percent are hampered by General Data Protection Regulation (GDPR) policies.
Due to previous delays in adapting ERP solutions, Africa does not suffer from complex legacy technology, nor is there a huge and somewhat intractable on-premise installed base hindering applications operations’ move to the cloud. The lack of such hindrances in the African market only add luster to the greenfield effect.
Until the 1980s, Africa showed little deployment or evolution around enterprise applications. Since then, evolution has been evident and, in recent years, has visibly accelerated.
Conditions Contributing to the Acceleration of the African Digital Sunrise
Though progress has varied considerably from country to country, the African continent has seen a digital sunrise since at least 2010. Our belief is that this sunrise is beginning to accelerate due to a variety of factors that are favorable to evolution in the realm of information technology assets both in enterprise applications and the emerging digital assets. Among these are:
- Overall economic health
- A culture focused upon labor force evolution through both job numbers and levels of employment
- Sociological drivers for technology to improve the human condition
- An evolution of personal digital skill sets for devices, instruments, and software utilization
- Emerging government support, both financial and educational
What follows is an inventory and exploration of Africa’s current accelerators to the digital sunrise.
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