The Sunday Mail
Dr Dennis Magaya
IT seems Zimbabwe is refusing to move with the times in terms of ICT because in quite a number of companies, the IT department is still being managed as a cost centre under the finance department.
In other companies there is a separate IT department or division, however, it’s regarded as a support function rather than a source of competitive advantage.
The tragedy of such approaches is that some companies that have not taken ICT seriously have closed shop. The main reason is that ICT introduces business models through enabling the offering of radically new service to the same clients or significantly reduces the cost of offering the same service.
Let me illustrate my point here. At the moment the biggest taxi company in the world, UBER owns no car yet it’s able to offer services at a lower cost than the traditional taxi companies. Another example is AirBnB which is now one of the best hotel company in the world yet it owns no hotel building. Alibaba is the most valuable retailer in the world yet it owns no inventory. Facebook is one of the best media companies yet it owns no content.
The Reserve Bank of Zimbabwe said that the total amount of monetary transactions in 2015 was US$57Billion of which 87,9 percent which is equivalent to US$50 billion was handled by mobile money platforms.
A mobile telecommunications provider in Tanzania, TIGO has paid out US$16.1 million to its mobile money users as profit share for the interest accrued on the money in the mobile wallets.
The majority of the population in Africa is unbanked and in Zimbabwe only about 30 percent have bank accounts. As a result we have a situation where companies that are not banks becoming the biggest banks using technology.
The key message is that these companies are mastering the art of using technology to change the way services are managed and offered to clients. The same services can be offered on a massive scale and much lower cost by using technology. The capital investment required and barriers to entry are much lower as well.
There are also companies that closed down because they failed to take advantage of ICT.
A good example is Kodak which at some stage had 85 percent market share of the print photography business in the whole world.
They were forced to close down due to the emergence of digital photography yet they had the highest number of digital photography patents.
The main reason is that they didn’t change to digital because they were protecting the print photography business.
In telecommunications, there are what are referred to as Over-the-Top players (OTT) that offer communication services at a much cheaper rate without owning a network. A good example is WhatsApp.
In Zimbabwe, a WhatsApp call is about 8 times cheaper than a normal voice call. Currently 34 percent of Zimbabwe internet traffic is contributed by WhatsApp. Globally, there are now 1 billion WhatsApp users compared to just over 4 billion mobile users. The signs are on the wall that the way telecommunications services have been offered and the cost structure is changing.
However, some telecommunications service providers are sticking their heads in the sand. Some are advocating to block WhatsApp calling. Fixed line telecommunications operators think it’s a problem for their cousins, the mobile operators.
The second massive change in telecommunications is the emergence of WiFi which now enables both internet and voice calls to be offered sometimes for free.
The majority of phones and computers are now WiFi enabled. The investment required to offer WiFi services is marginally smaller than mobile telecommunications.
So, its possible to offer internet and voice communications without owning a network. However, the telecommunications operators are half-hearted in migrating to WiFi or WhatsApp because they are trying to protect their traditional cash cows. If they continue with that thinking, they will end up being another Kodak in the next 5 years.
Corporates in Zimbabwe and Africa in general are also very conservative in adopting technologies. In fact, some people even believe that corporates are scared of technology.
If you buy insurance in Africa, be prepared to complete volumes of paper that can make a couple nights bed time reading. The way insurance products are packed, sold and consumed has very limited technology beyond the main insurance system that would have been installed many years back.
As a result, its very costly to offer services. This is an industry where within the next 5 years, the biggest insurance services provider could be a mobile telecoms company.
The majority of corporates in Zimbabwe have made limited strides in adopting new technologies to reduce costs and increase customer experience beyond adopting social media such as twitter and WhatsApp. Even with that, some company executives don’t quite feel at home.
The Government has made massive strides in pushing the use of ICTs to reduce costs. Good examples are the announcement by the Ministry of ICT Postal and Courier Services that US$25 million will be set aside to fund Apps development.
This is a ground breaking and practical policy which will leverage digital inclusivity to enable the whole country to participate in creating technology solutions that are usable and relevant in their communities.
The e-Government roll out program is commendable. In particular, the Home Affairs Ministry has made the application for passports the most enjoyable experience of all Government services. If all Government departments could emulate the passport office, the country would go far in service delivery.
The ICTs are introducing disruptive business models that fundamentally change the cost and approach to offer services. New companies that have mastered the art of using technologies are emerging at a rapid speed and on a massive scale. At the same time, companies that have huge corporate immunity and therefore fail to embrace technology risk being wiped out of business over night.
