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(PwC’s Strategy& Global Digital Operations Study 2018)

Industry 4.0 is transforming manufacturing rapidly and digital transformation has been on many CXO’s agenda for a number of years. Despite this, only a small group of companies is in a position to gain real competitive advantage from this operations revolution. In PwC’s Strategy& Global Digital Operations Study 2018 only 10% of global manufacturing companies are dubbed as ‘Digital Champions’, while almost two-thirds have barely or not yet begun the digital journey.
 
For its report, Digital Champions: How industry leaders build integrated operations ecosystems to deliver end-to-end customer solutions, PwC’s consulting capability, Strategy&, surveyed 1,155 executives at global manufacturing companies in 26 countries including South Africa and asked them about their views on Industry 4.0 and digital operations. Based on the outcomes, PwC developed a digital maturity index to explore the role of frontrunners the so-called ‘Digital Champions” and what distinguishes them to outpace their competitors.
 
Pieter Theron, PwC partner advisory services and head of Industry 4.0 South Africa, says: “Digital Champions, are noteworthy because they view digitisation in ways that are far-reaching and aggressively innovative, well beyond automation and networking.  It is disappointing to note that none of the manufacturing companies we surveyed in South Africa are Digital Champions and most fall into the Digital Novice category (the least digitally mature companies in the report).”
 
From a regional perspective, Asia Pacific (APAC) are the most advanced with 19 percent of them from that region in the Digital Champion category. These companies are championing the digitisation and end-to-end integration of their operations, introducing digital products and services and connecting new technologies across their organisations at a much faster rate than their peers in the Americas (11%) and EMEA regions (5%). Already today, Digital Champions are deriving more than 50% of their revenue from digital or related services instead of traditional products.
 
Because of the number of Digital Champions, Asia-Pacific companies expect 17% growth in digital revenue over the next five years, compared with the 13% growth anticipated by EMEA companies. That gap is expected to continue to widen, as 32% of Asian companies plan to have established mature digital ecosystems in the next five years, compared with 15% in EMEA and 24% in the Americas. “This is not good news to South African manufacturers as it will result in a growing competitive gap that will become increasingly difficult to bridge,” Theron adds.
 
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Progress is being made to promote the protection of personal information in South Africa. President Cyril Ramaphosa has announced the commencement of parts of the Protection of Personal Information Act (POPIA). The remaining provisions of the Act will be addressed once the Information Regulator assume its powers, functions and duties in terms of the Act.

The sections that commenced on the 1st of July 2020 and include the conditions for processing personal information, procedures for dealing with complaints and provisions regulating direct marketing by means of unsolicited electronic communication.

Sections 2 – 38, 55 – 109, 111 and 114 (1), (2) and (3) commences on 1 July 2020 and Sections 110 and 114(4) will commence on 30 June 2021.

What does this mean?

According to new legislation, businesses are required to manage the complete destruction of all data when IT assets reach end-of-life. Wale Arewa, CEO of Xperia, says businesses that process personal information must ensure that it is done in a lawful way. “The POPIA Act is designed to protect personal information, especially in the case of data breaches and data theft.”

“Compliance is fast becoming a competitive advantage. Customers don’t want to be put at risk, data breaches and issues related to regulatory compliance, associated costs and loss of reputation will have dire consequences for businesses that suffer data breaches,” he explains.
 
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Read the e-newsletter here: Issue 711: South Africa falling behind with digital transformation

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