SYSPRO listened to different perspectives at two events in Kenya: one the CIO view and the other the CFO view on digital transformation.
Chief information officer (CIO)
Mombasa, Kenya: CIO 100. The hot sun is directly overhead, there is high humidity, white sands and a coral reef 1km offshore. It is the ideal location to let ideas flow.
IT and infrastructure security came out strong. Whether cloud or on-premises, security of access, data and supplier integrity are paramount to digital transformation. Interestingly, they are also required to create customers’ confidence in the deployment of any business IT.
With 27 percent of security/access errors listed as user errors, where 9 percent are mistakes, but 18 percent are malicious, users are twice as likely to intentionally harm data than make genuine errors – beware!
SYSPRO believes that when going down the ‘yellow tech road’, you should relook at business processes and opportunities. Yes, pick low-hanging fruit, but this must be a priority for your company and bring significant improvement/returns. Too many organisations reach too close, seeing little return. Remember, you can’t learn to swim by paddling in the shallow water!
Transformation brings people-pain you have to go through, so make sure the change is relevant, important and returns value.
Training is a digital transformation must. In software use, there is software system admin, but just as important is to expose implementing suppliers to your business. They must understand the generic traits of your industry, but salespeople/executives/ implementation teams must get into the trench together with customer teams – to succeed, you are interdependent. Have customers lead suppliers around their operations to see/hear/touch/smell/taste what matters. And customers, you must pay as it fuels a performing team.
Chief financial officer (CFO)
In Nairobi, with the Institute of Certified Public Accountants of Kenya (ICPAK) – Kenya CFOs and accountants, we presented our Industry 4.0 regional research into manufacturing/distribution companies during the COVID-19 period – findings which may apply globally.
• 7 percent of companies say they’re fully recovered.
• 51 percent said full recovery by end 2022.
• 36 percent said recovery will only be 2023 and beyond.
• 50 percent believe conditions are fair – meaning doing ok, not thriving.
• 1 percent said they are thriving.
Although 50 percent seem ok, all companies had to weather economic slowdown, some due to measures instigated to curb COVID-19 spread like lockdowns, restricted movement, etc. But management time is available in slack times, so moving up the digital curve is a real opportunity – was this competitive move to come out of COVID-19 running missed?
Funding assistance – at hand, or is it?
Europe/USA-linked companies received assistance from their principals. Government assisted by reducing tax and structural reforms, but the research showed:
• 51 percent received no direct funding.
• 38 percent benefited from tax deductions only.
• 13 percent benefited from stimulus packages.
Spending and innovation
• 31 percent of businesses wish to diversify – investing in new technology.
• 70 percent committed to starting or optimising application of enterprise resource planning (ERP) and business intelligence (BI).
• 58 percent are earmarking the importance of business IT for future recovery.
• 65 percent fund investments out of their own pocket.
• 65 percent prefer traditional cost cutting to fund efficiencies.
Whilst Kenyan CFOs hunger for diversification/investment in digital transformation, having to use their own funds they stick to cost cutting, downsizing, etc.
So, funding fueled survival, not economic revival as the government hoped. Value-add reduced 0.1 percent in 2020/21compared to 2.5 percent growth in 2019
• 77 percent suffered delays in global and local supply.
This impacted Kenya’s dominant food and beverage industry, as well as sectors like fabricated metals, automotive supply and other manufacturers.
The ‘Covid business disease’ appears to be companies sticking to continuous improvement (renovation) of existing processes, rather than step change (innovation) where more sophisticated technologies are introduced to reengineer supply chains, add e-commerce and predictive functions like AI/ML or to simply optimise planning and execution. This is strange for Kenya, which is renowned for trading entrepreneurialism and application of technology and is always trying to lead.
If Kenya, the brightest star in Africa, has CIOs/CFOs keen to innovate with technology like ERP, but not able to execute adequately due to funding and COVID-19 mitigation constraints, other African economies, including South Africa, may come out of COVID-19 in truly bad shape.
We’re all part of the same world, but just like COVID-19 vaccination inequity, funding inequity may be slowing Africa – let’s change that.