South African businesses are taking the process of digitisation seriously, with companies surveyed by PricewaterhouseCoopers (PwC) saying they will invest up to R6 billion per annum over the next five years.
The firm says the current level of digitisation and integration in South African companies is expected to rise from 27% to 64% by 2020.
These stats come from a PwC report, "Industry 4.0: Building the Digital Enterprise". Over 2 000 companies from 26 countries were surveyed on how they are digitising business. In SA, 61 companies were surveyed from 10 different production sectors.
PwC defines Industry 4.0 as the fourth industrial revolution, where digital solutions for business is needed. Solutions include Internet of things, cloud computing and mobile devices.
The reports shows companies worldwide want to invest about 5% of their revenue annually in digitisation. This will result in investments of over $900 billion per year until 2020.
A major focus of these investments will be on digital technologies like sensors or connectivity devices, and on software and applications such as manufacturing execution systems.
In addition to systems and equipment, companies are already investing in training employees and driving organisational change. More than half of these companies worldwide and over 70% in SA assume they will amortise this expenditure within the next two years.
Pieter Theron, PwC partner for advisory services and head of Industry 4.0, SA, says: "All companies surveyed are expecting to significantly increase their overall level of digitisation. While just 33% rate their company as advanced today, that number jumps to over 70% looking ahead to 2020.
"At the end of this transformation process, successful industrial companies will become true digital enterprises, with physical products at the core, augmented by digital interfaces and data-based, innovative services. These digital enterprises will work together with customers and suppliers in industrial digital ecosystems."
PwC says data analytics will be a driving factor for Industry 4.0. Over 80% of South African respondents expect data analytics will have a significant influence on their decision-making processes in five years' time.
Tielman Botha, PwC associate director of advisory services, says: "To reach excellence in data analytics, industrial companies will need access to a wide variety of skills, including those of data scientists and algorithm architects."
One of the challenges facing companies with digitisation is lack of talent. However, PwC says although there may be a shortage of specialised skills, most companies have talent they need already ? it is just misplaced. For example, someone working in the marketing department may want to be more involved in the digitisation process than they are already, says PwC.
Lack of internal digital culture and training (58%), and insufficient talent (40%), top the list of the challenges identified by South African respondents.
"Many industrial companies will need to develop digital skills sets around creative digital strategy design, technology, architecture and design, and user experience design," says Theron. "Without the right digital culture, the best talent will not want to stay."
Cyber security is one of the main concerns when businesses go through the process of digitisation. Local survey respondents raised concerns around cyber security breaches (53%), damage to company reputation and loss of trust due to data loss (47%), and liability risks through data loss (40%).
Share