Quick Links :

• ICT to drive African development
• New biz expansion: Hello Africa, India's calling
• The Business of ICT in Manufacturing in Africa
• ICT in the Financial Services Sector in Africa
• World Bank to boost broadband in Africa
• Regional mobile apps labs to build skills, address social needs
• Electronics giants target African consumers

ICT to drive African development

 

Africa needs to develop and deploy ICT technologies to improve governance, service delivery, build capacity and ensure citizen empowerment, stakeholders present in Maputo, Mozambique at the 4th annual e-Governance Africa Forum organized by the Commonwealth Telecommunications Organization (CTO) have said.

 

Leaders in ICT and government representatives gathered at the e-Governance Forum to find solutions to the various challenges facing African governments.

 

Dr Henry Chasia, Executive Chairperson of the NEPAD e-Africa Commission, said that access and use of ICT is crucial for development.

 

"In NEPAD, we have placed great stock on the application of ICT to education", he commented, speaking about the NEPAD e-Schools Initiative which aims to use ICT to support teaching and learning in all primary and secondary schools on the continent.

 

Dr. Ham Mukasa Mulira, Senior Presidential Advisor on ICT, Uganda and Chairman of the occasion, urged policy makers, regulators, solution providers and various stakeholders to share experiences and strategies on how ICT can bridge the digital gap between Africa and the rest of the world.

 

Furthermore, Dr. Ekwow Spio-Garbrah, CEO of CTO, argued that e-Governance must be seen as an important match-making process between citizens and public ICT service providers.

 

He enumerated weak political leadership, low education levels, lack of coordination, poor infrastructure, resistance to change and other human impediments as some of the obstacles to successful e-government implementation.

 

The conference, which ends on the 25th of March 2010 with a workshop on "The Road to 4G" and a focus session on ICT Technologies, is attended by ministerial representatives from Mozabique, South Africa, Southern Sudan, Zambia, Kenya, Israel, Uganda, Malawi etc, as well as senior officials and major ICT companies in the region.

 

 

New biz expansion: Hello Africa, India's calling

 

NAIROBI: Millions of mobile phone subscribers in Africa saw the icon on their phone screens change from Kuwaiti company Zain to Indian company Airtel last fall. The change means little to the average customer, but for the continent, it's another sign that India is moving in.

The expansion by Bharti Airtel into 16 African countries underscores the rise of India in Africa, at a time when much of the focus on foreign investment here has been on China.

The Indian government is raising its diplomatic profile in Africa, with Prime Minister Manmohan Singh and his cabinet leading several business delegations in recent years. Indian companies are striving to keep up with China's business profile in Africa, taking advantage of historical ties with the continent.

"I think one of the things that India doesn't want to allow to happen is that it doesn't want to get behind in this kind of engagement," said Sanusha Naidu, research director at the Britain-based Fahamu Organization, an advocacy group tracking African issues.

Naidu said India's renewed interest in Africa has not received as much attention as China's because India is not seen as a threat.

"It is seen as a democratic state," Naidu, a South African, said. "It doesn't have a communist regime. All that plays in favor of India."

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The Business of ICT in Manufacturing in Africa

 

ICT is a key enabler for the manufacturing sector. It's transforming the global manufacturing arena while opening opportunities in the African market.

Africa lags behind its global counterparts in industrial and manufacturing development. Even when comparing the percentage manufacturing contributes to the gross domestic product (GDP) in African countries to other developing countries, manufacturing contributes about ten percent in African countries and 21 percent in other developing countries.

 

In Africa, but outside South Africa, there are pockets of manufacturing success stories. The Ethiopian leather industry has made a name for itself in global niche markets. Robert Parker, group VP of research for IDC Manufacturing Insights, says the one significant manufacturing segment in Africa is the remanufacturing of computer and electronics.

 

However, the picture is getting brighter. Globalisation, innovation and ICT are transforming many sectors to anywhere, anytime platforms. In the manufacturing sector, the mantra is “design anywhere, make anywhere, sell anywhere," says Parker.

One shift is product manufacturing, separated into tasks and spread across manufacturing facilities. This is seen as a huge opportunity for new, smaller manufacturing entrants in low income countries, including Africa, according to the Industrial Development Report 2009 by the United Nations Industrial Development Organization (UNIDO).

 

Parker speaks of a similar shift from mass to micro to pod manufacturing. Historically, manufacturers built one facility to serve the world. With pod manufacturing, manufacturers can download designs and methods from anywhere to localised manufacturing equipment to serve the local economy.

Pod manufacturing has reduced cost tremendously and increased flexibility. For example, there is equipment to manufacture wine, starting at $3 500.

Parker also says that local African manufacturers will be able to “bring more diversified and custom products to their local consumers". For example, Digiskin allows customers to go online to design skins to cover gadgets, including cellphones.

 

A company can purchase a production machine to provide some of these skins locally to customers.

For a long-term opportunity, Parker says that African governments need to leverage access to their abundant resources and require firms to develop manufacturing and processing facilities locally alongside extraction operations. In some instances, deposits in Africa may account for 80 to 90 percent of global deposits of certain precious minerals or metals. They need to play the leverage game like China. China recently limited the export of rare metals to boost the price. African governments can use the same principle in a different way.

 

In every aspect, ICT is embedded in the manufacturing value chain from infrastructure to intelligent manufacturing. Without sufficient broadband infrastructure, approaches like pod manufacturing might not be possible.

 

Parker also sees another opportunity with the pervasive wireless infrastructure in Africa, allowing African firms to tap into and manage the full manufacturing value chain almost anywhere with technology like remote sensing and radio-frequency identification (RFID).

While there may only be pockets of manufacturing on the continent, the global manufacturing shift opens new, even immediate, opportunities for ICT firms looking for new pastures, e.g. industrial clusters in Uganda and Tanzania, as they develop. It will be important for ICT firms to continually scan the environment to take advantage of these emerging opportunities.

 

Manufacturing convergence

Further south, leveraging information, communication, control and power is helping South African manufacturers innovate and compete.

Manufacturers have two options during the global economic downturn: cut back and try to weather the storm, or take the opportunity to be more innovative and aggressive. However, because South African factories struggle to manufacture products at the same cost as is possible elsewhere in the world, and due to a strong currency, local manufacturing concerns face these two options all the time.

 

Rockwell Automation believes that even though convergence has become a cliché over the past decade, “today the combination of technology maturity and economic necessity has made manufacturing convergence a manufacturing reality". Manufacturing convergence sees the merging of functions and systems that have been separate. The theory is that with people, processes and technology working together, manufacturers can perform better.

Convergence within manufacturing leverages information, communication, control and power.

It's no use simply having systems and machines recording data. Information must be in a manageable form: the new goal is presenting information in context.

Sources of information can be “streamlined to allow configuration, visualisation, maintenance and optimisation of manufacturing processes and plant assets," Rockwell says.

 

Immense value is created when IT and manufacturing departments are able to share information seamlessly and securely, while running multiple applications over the same network. An enterprise manufacturing approach that is particularly suited to larger distributed companies envisions the enterprise as a “virtual manufacturing network".

 

EOH, during an implementation at Coca-Cola's greenfields Bloemfontein plant, was able to capitalise on available technologies while the rest of the group used mostly manual or semi-automatic systems. In time, improvements to its other factories will mean that they can join the network across the Coca-Cola SABCO enterprise.

 

The trend nowadays sees standard, unmodified Ethernet being adopted broadly across the plant and enterprise for data collection and real-time control. Add to this newer functionality such as voice, video and mobility, which are beginning to appear in the plant environment.

However, despite these advances, manufacturing convergence is a complex environment and cannot be delivered by a single supplier. Locally, system integrators like Bytes and EOH implement solutions from companies as varied as Cisco, Microsoft, SAP, Wonderware and Dassault Systems.

Beyond this, original equipment manufacturers are embracing new so-called “smart" service business models enabled through embedded software, wireless connectivity and online services.

 

This shift has significant implications for manufacturers.

Lifecycles of products are becoming ever shorter as releases will begin to ship in “real-time" with software devices delivered to products over networks when needed. Oracle's manufacturing VP, Manish Modi, reckons it's hard to accurately predict what manufacturing operations will look like five years from now, but “factors we experience today are likely to have a residual effect on the supply chains of tomorrow."

 

Modi says that many of the top manufacturers will have leading “service-oriented architecture suites in place to enable supply chain evolution as well as needed flexibility to quickly respond to changing markets and inevitable shifts in buying patterns".

 

He also suggests that most manufacturing systems will support Web or Enterprise 2.0. “The future adoption of tools like wikis, blogs and mash-ups to create store, and collaborate on information by skilled manufacturing users should not come as a surprise. Touch screens and sophisticated wireless devices should be a common part of leading factory floors."

 

But, the biggest problem in converged manufacturing is not the availability or implementation of technology: it's changing the mindset of the people themselves.

 

 

ICT in the Financial Services Sector in Africa

It's no secret that the financial services sector is the biggest spender on ICT in the country. According to BMI-T's SA ICT Vertical Market Sizing and Forecasting Report, the financial, business and other services sector accounted for over 30 percent of total expenditure on information and communications technology in South Africa. But what trends are dominating the sector?

 

Because of security, financial institutions, especially banks, cannot feasibly outsource their IT departments, a trend seen in most other sectors. Most functions are retained in-house. However, desktop support is one area where outsourced solutions make economic sense. Gijima AST, one local company focused on the financial services sector, offers customer interface as well as electronic payment solutions. Electronic payment (largely back office) solutions are seeing tougher security as well as further automation of processes. The trend is for cheques and other documents to be scanned and archived for simple access from anywhere on the bank's network.

 

Making this kind of data available on other platforms is also seeing serious adoption in the industry. Clients can, for example, access scanned cheques/ deposit slips/documents via the traditional online banking platform. The broader push sees transaction systems leveraged onto different platforms and interfaces. In the same way that an archived image of a cheque can be accessed in-branch and over the internet banking interface, banks are taking their core transaction functionality and leveraging that over a number of platforms.

 

No longer are ATMs simply cash withdrawal points. Transactions can now be done inbranch, online through internet banking, via ATMs, through point-of-sale systems and, increasingly, on mobile phones. Gijima says the “focus is shifting towards solution concepts for new delivery channels such as electronic banking and new branch structures".

 

Mobile Banking

This leveraging requires significant integration of new systems with the banks' core legacy offerings. The biggest push in the South African market is undoubtedly into mobile banking. FNB, one of the pioneers, set up a division internally that innovated mobile banking. This now falls under the ambit of FNB Mobile and Transact Solutions, and the group has set up a similar team responsible for innovation, with some of the original mobile banking staff involved.

It's not only FNB that has realised that smaller, more autonomous units are the key to innovation. This new team is largely responsible for the ancillary FNB Connect service, where FNB is leveraging its excess bandwidth and providing connectivity and VOIP calling to its customers. The use of two-way SMS messaging in the customer relationship management realm has caught on in the South African market, and banks have here again married newer platforms with their legacy systems.

 

Internet banking systems have been further integrated with SMS gateways as a fraud prevention mechanism. Account transaction notifications are sent in real-time, allowing customers to be aware of payments immediately.

 

Aside from sector-specific adoption, the financial services industry is adopting broader ICT trends, such as virtualisation, standardisation and €" as mentioned €" the outsourcing of desktop support. Standard Bank, for example, in 2008 standardised its IT environment to create a centrally managed one.

The benefits were obvious: costs were reduced, while the bank saw increases in security, productivity, agility, and stability. It's also used the built-in virtualisation technology in Windows Server 2008 to reduce the number of physical servers required to run bank operations. This also translates into quicker development of new services.

 

Cross-Continent

Less than ten percent of Africans use banking services, however. In addition, cash is still the primary financial instrument, and market capitalisation as a percentage of gross domestic product (GDP) is well below 100 percent. These statistics illustrate that financial markets in Africa only contribute in a minor way to economic growth on the continent. However, initiatives like the M-PESA mobile payment system in Kenya show the potential opportunity for ICT in fi nancial services. It is also ICT providers across the globe that are increasingly providing these services, either instead of or in partnership with banks.

 

There is another success story in Ethiopia €" Ethiopia Commodity Exchange (ECX). Solomon Edossa, CIO of ECX, says it is designed after world-class commodities exchanges like the Chicago Mercantile Exchange. Generally, a commodities exchange would partner with financial institutions to handle settlement of trades, but there was no clearinghouse and no electronic payment system in Ethiopia. ECX established its own clearinghouse and electronic payment system, in partnership with Ethiopian banks, to handle its transactions.

 

In fact, ECX has become a financial services “orchestrator" in its ecosystem, which can extend to several hundreds of thousands of subsistence farmers in cooperatives participating as ECX members.

 

Its commodity warehouses can be considered “bank branches". Producers deposit commodities at the warehouses. ECX assures the quality, quantity and delivery of each commodity to buyers. At the same time, ECX assures sellers their commodities are secure and payments are received within 24 hours. In 2010, producers will be able to get warehouse receipting financing on commodities they deposited. ICT abounds in ECX's “financial market".

Edossa says once commodities are deposited into a warehouse, they are electronically registered and tracked. This information is electronically communicated to the ECX headquarters in Addis Ababa. In addition, prices are displayed across the country at remote stations and on mobiles. Soon, ECX will begin online trading.

 

But the ECX story is really about the potential of its ecosystem. Edossa states: “All my staff members are local. We are creating jobs and increasing local capacity."

 

In working with banks to deliver on their service delivery agreements with members, ECX is helping banks design new financial products for members. This brings more business to the banks. In addition, the process is also encouraging Ethiopian partner banks to implement core banking processes, which is creating new opportunities for ICT providers. Eventually, ECX will implement ICT-dependent services in sectors other than financial services like logistics, systems support and internet cafes.

 

But ECX still faces the typical challenges in Africa. In fact, Edossa admits: “I doubted it could be done." ECX had to address the regular power outages in Ethiopia, particularly in the rainy season, and the unreliable communications network. It met the challenges with a variety of solutions like mixing generators and uninterrupted power supplies to keep systems running, and mixing broadband and dial-up for telecommunications consistency. ECX worked the ICT challenge so well that there is not a single failed transaction in two years of operation and close to $2 billion in transactions.