ICT Automation, The digital economy and strategic implications for firms in Zimbabwe

Starter ….

As the year 2000 approached a fever gripped industry particularly in the United States with many of the worried about the internet, tech industry and the hitches of migrating systems into the new millennium. Giant corporates such as Morgan and Chase did set aside an estimated 250 million dollars as budget provision for mitigation of the transition costs. The total costs of migration were estimated to run to about 600 billion dollars and to manage this risk investment was pushed into the technology sector. Initial public offerings by tech firms took centre stage with prices of stocks of these offerings growing by an estimated 100% with each passing day. This continued surge however came to a grinding halt in 2001 when firms realised that they were really not as exposed as previously anticipated. Tech companies closed shop as their stocks fell in value with an estimated loss of 30million per year. These massive losses were unsustainable and from a remarkable 260 tech companies only 76 survived into 2002.

But there seems to be similar characteristics of the internet bubble growing again in the tech industry with insurmountable growth in technology uptake largely driven by financial oriented products known as FINTECH. The ICT industry has witnessed some ridiculous appreciation in the value of tech companies which saw the acquisition of WhatsApp for an unprecedented 19 billion dollars by Facebook in 2015. Technology has had a noticeable impact in the productive sectors of every economy. Research organisations claim that Technology has accounted for at least 85% of the 5 million jobs that the American economy has lost between 2000 and 2010 with artificial intelligence and robotics being at the prime. Such is the influence of technology that is has resulted in the budding of an undesirable offshoot in cybercrime. This technological ill is estimated to cost economies into billions of dollars annually. The key difference also lies in the fact that the present day technology is being driven by production where technology has become a medium of delivery for service which has positively impacted on profitability. One of the notable value appreciation saw the surge in value in Google which was valued at 50k a decade ago and is now worth a whopping 500 billion dollars.

This growth has been driven by the countless innovations that have come through the industry. The internet of things has been one of the most welcome developments of the 21^st century. The development has seen the integration of traditional hardware devices into intelligent systems such as life support systems capable of making real time processing and making intelligent decisions without human intervention. In addition, the concept of fintech continues to grow at an astronomical rate causing disruption even in Zimbabwe’s financial services sector where mobile money applications such as Ecocash, Telecash and GetCash have threatened the very existence of banks. Virtualisation and cloud computing continue to provide institution with ways of managing their computing resources and doing so at considerably low cost.

ICT has since moved from being a support function to be at the centre of services delivery, providing ERPs, CRMs and many other tools for business process management. The concept of DevOps has also contributed to the recognition if ICT as a vital cog in the business value delivery engine.

What does IT automation entails…

The fast paced change in the business has clearly made demands for systems that are able to cope with this kind of change. Technology has responded with rich innovations which have matched the necessary changes as required by business. This has led to a business-IT convergence which has intertwined technology and business creating an unmatched competitive advantage for any organisation looking to be the leader in its sector. In general, automation refers to a non-manual way of completing a task. When applied to ICT, it refers to the use scripts, programs, jobs, and various other means of value provision to the intended end user.

Why it matters …..

The Zimbabwean business landscape is one that is marred with a myriad of snags ranging from macro socio-economic to internal issues. Issues of cost structure and infrastructure obsolescence have been identified to be some of the causes non-performance within organisations. Automation therefore, presents an opportunity for managers to avoid the burden of cost and lack of efficiency. Adopting technology oriented products allows organisations to reach new customers and provide convenient access to provided services.

Cost Reduction Strategy

In cost reduction thrust, technology has created paperless office. Technology has fundamentally reduced the use of paper through the use of software programs that take advantage of workflows. In addition, technology has also replaced some jobs and in the process reducing the human resources costs to companies. Moreover, technology introduced the use of collaborative tools which have gone miles in bridging geographical divides and reduce travel costs.

Competitive Strategy

Information and Communication technology (ICT) is perceived to play a crucial role in transforming not only big but also small-and-medium enterprises (SMEs). Enabling policies on the part of government in order to provide incentives to SMEs for usage of ICT is quite essential. Many firms in Zimbabwe have adopted automation and electronic data processing in order to make their processes more efficient. ICT therefore are playing a key role in service delivery in the process providing competitive advantage. ICT allow for better process, supply chain and marketing of products and above all interaction between service providers and customers. Adoption of ICT therefore can never be over emphasized as it has turned out to be an important strategic option for organisations.