African companies are increasingly focusing on data management to create value but they still lag far behind the rest of the world in putting them into effective use. What can be done to close the gap?
Corporate-level challenges: focusing on core activities
For a company to succeed in today’s world, and all the more so in tomorrow’s, turning data into a competitive advantage is already recognised as a key driver. Findings from a survey conducted across Africa by Boston Consulting Group showed that although a high percentage of their corporate clients were running new ideas, software and algorithms, these were dispersed across their organisations. Focus was fragmented and the impact was ultimately draining. Core activities, which have potential for digital innovation and bring significant value to a company, were not being addressed with appropriate focus.
“For every ten ideas that come up, maybe one will take hold […] We choose the unicorns and focus on the ones that will have the most impact and create for us as much influence as possible within the communities that we operate”. Bola Adesola, Senior Vice-Chairman at Standard Chartered Bank Group.
Standard Chartered Bank, for example, has concentrated its efforts into different companies within the bank with an aim to ensure that new data-inspired ideas are viable, profitable and commercially sound. They include SC Ventures, an investment business that addresses business problems with a digital mind-set, drawing on an accelerator hub based in Nairobi (Kenya) and investing in validated Fintech ideas. The bank has also set up an API-based banking as a service, Nexus, that partners with third parties to provide white label banking services.
“Third parties generate data, we generate data and collaboratively at the end of the day the customer and the community are better off”. Bola Adesola, Senior Vice-Chairman at Standard Chartered Bank Group.
As Ravi Chhatpar, Co-Founder and Partner of Dalberg Design pointed out: “Increasingly, meaningful and sustainable innovation requires collaboration across ecosystems, means working with new types of partners, trusting and sharing with organisations you may not know well, all the while protecting the data of your customers and citizens”.
Developing access and data literacy
Among the identified stumbling blocks for businesses is their access to data. Corporate data may be on paper or in legacy systems and therefore not directly exploitable. However, once extracted and cleaned, businesses are often surprised by the volumes of data they actually have.
On a far larger scale, Huawei, a global provider of information and communications technology, has already implemented infrastructure in Cape Verde that facilitates access to public data. “In order to gain access to data governments need to put in place convergent resource pools […] which are available to the government and enterprises in all sectors,” says Chakib Achour, Director of Marketing Business Strategy at Huawei in Morocco.
Another challenge facing African companies is a deficit in data literacy. Despite many businesses, particularly those with industrial operations, having invested in predictive maintenance solutions, the information generated by these solutions is largely ignored by maintenance teams.
James Gabriel Claude, CEO of Global Voice Group, a data-driven solutions provider for regulators and authorities, points to the need for all stakeholders in Africa to work together to invest more in data literacy by setting up university programmes for students to learn how to exploit both big data and data in general.
“Of course we need trained human capital [but] if we don’t have the infrastructure in place, there is nowhere to hold the data, we don’t even have the data to develop the human capital. Everything comes back to the fact that we need an underpinning infrastructure”. Ayotunde Coker, General Secretary of the Africa Data Centers Association
Continent-level challenges: building data centres
“[Without] the underlying infrastructure, everything else is a pipe dream”, says Ayotunde Coker. He argues that co-location of data and services in commercially available data centres underpin corporate transformation and kick-start new businesses. Furthermore, ramping up data centre capacity across the continent will not only reduce network latency and improve speed but essentially drive digital ecosystem growth.
Citing an analysis that indicates a 1.5% uptick in GDP for every 10% of broadband penetration (translating into 2.5% in emerging economies), Ayotunde Coker argues that once Nigeria reaches 40%, “data volumes and outreach to individuals, using the data and hosting the data will significantly increase. That’s when you reap the benefits [from data] and impact human capital, and so on”. As data continues to grow significantly, companies like Amazon web services, Google and Microsoft are investing in data centres on the continent in the knowledge that they must host their data closer to the point of use. “There are more data centres being built to house these international players for lots of different types of functionality”, says Ayotunde Coker.
Chakib Achour also sees ICT infrastructure as the foundation of the smart world. Huawei is involved in infrastructure building projects in several African countries, but Chakib Achour is quick to point out that infrastructure must be completed with an ecosystem. “Huawei knows the importance of the ecosystem […] Our focus is to provide ICT infrastructure and ecosystems to enable our customers realise their use cases” says Chakib Achour. Huawei has developed three operating systems with this in mind: FusionSphere cloud OS, HarmonyOS, for mobile services and lastly the Kunpeng ARM-based CPU.
In many African countries, regulators continue to apply regulatory concepts that are obsolete for fast-moving technology. “Regulators come in and they slam everybody”, says Bola Adesola. To illustrate this point, James Gabriel Claude referred to the explosion of mobile money in East Africa where central banks acted as an enabler, as opposed to Nigeria where the government’s reaction hampered mobile money development. “What we need” says James Gabriel Claude, is “dynamic regulation that can evolve”. Using regulatory technology platforms that collect big data from sector providers, his company has assisted telecom regulators and central banks in particular to make data-driven policy decisions that are adapted to the different sectors involved.
This example of public and private sectors working towards appropriate regulation is echoed in several countries through initiatives undertaken by trade associations and ecosystems for sector players. The Fintech Association of Nigeria, for example, whose members include telecom companies and other stakeholders across the ecosystem, facilitates a regulatory forum where innovators and regulators come together.
“We can actually get regulators thinking about what is round the corner, so that they are not lagging behind and creating policies that are reactive, because sometimes policies are created around one incident rather than looking at the ecosystem […] If you are liaising, if you are providing thought leadership then the likelihood of tension is removed.” Bola Adesola, Senior Vice-Chairman at Standard Chartered Bank Group
That at least 35 countries have membership or are affiliated to the Africa Fintech Forum is seen by Bola Adesola as “tremendous progress”.