The majority of South African manufacturers are falling behind the curve in the adoption of high-speed, reliable Internet connectivity, hampering their ability to implement advanced technologies such as artificial intelligence (AI), machine learning and Internet of things (IOT).
This is the key finding of a new study titled: “The Mobile Corporation in SA 2019”, conducted by enterprise resource planning software solutions firm SYSPRO, in partnership with business technology research firm World Wide Worx.
The study, based on telephonic interviews with IT decision-makers at 400 large local companies, reveals that manufacturing enterprises typically use slower forms of connectivity than other enterprises in general – resulting in the need to use stopgaps to cross the corporate digital divide.
The report notes 63% of manufacturing enterprises regarded fibre-to-the-office as a key technology, but this figure leaped to 74% for other industries.
It also shows rapid uptake of fibre connections by cross-sector enterprises – but the manufacturing sector is significantly lagging behind.
While ICT spend in South African companies has increased, with 68% of corporates having grown their investment in technology, the manufacturing sector also falls behind in its spending on ICT solutions, according to the report.
Speaking at the report launch in Johannesburg yesterday, Arthur Goldstuck, MD of World Wide Worx, explained the consulting and management sector (100%), communication and broadcasting (100%), health and education (100%), government services (75%), mining (73%) and other services (64%) were all ahead of the manufacturing sector in their fibre-optic connection implementation.
The fact that local manufacturers are falling behind in their adoption of fibre connectivity, he explained, is a reflection of the sector lagging behind the curve in the adoption of some innovative technologies, such as IOT, AI, machine learning, business intelligence and analytics software, among others.
“What we are seeing is that fibre communication in the manufacturing sector is not as highly prioritised as it is in other sectors. While the manufacturing sector sits somewhere in the middle as far as adopting digital transformation technologies is concerned, when compared to the specific sectors which we interviewed, manufacturing ranks significantly lower.
“But there are some aspects where the manufacturing sector shows strong use and awareness of technology. These include virtual reality and augmented reality due to training, simulation and maintenance benefits. We are also seeing a strong use of robotics, which helps them with productivity and cost-efficiency.”
The research also reveals the continued importance of WiFi – in particular with the emergence of mobile WiFi devices. Almost half of all respondents (47%) regard WiFi in the office as important, with similar levels of use across industries.
Mobile WIFi is only regarded as important by 23% of respondents, but only 12% regard it as not important, indicating it is beginning to fill the gap left by poor access to other forms of high-speed connectivity.
High costs, complexities associated with updating technology, the fragmented nature of the manufacturing industry and lack of technical skills were among the main barriers leading South African manufacturing firms to fall behind in their ICT investments.
Across all industries, voice communication remains the heart of the corporation, with landlines and basic cellphones being ranked the most important hardware devices by all respondents. However, this area also revealed a massive gap between manufacturers and the rest – with 73% of manufacturers regarding each of these as important, versus 89% for other industries.
Mark Wilson, MD of SYSPRO Africa, noted that when comparing ICT spending in other sectors to expenditure from the manufacturing industry, the research found manufacturing spending less, particularly in enterprise resource planning, hardware and machinery, and customer relationship management.
“With one of our organisation’s key vertical focus areas being that of manufacturing, it was surprising to see that manufacturers in the country prefer legacy forms of connectivity over the unprecedented opportunities that advanced forms of connectivity have proven to offer. This has the potential to have a negative impact, not only on productivity and overall output, but also on the abilities of these organisations to remain agile and competitive.”
In SA, the manufacturing industry contributes 13% of the annual GDP. KPMG reported that two out of three manufacturing CEOs are anxious about their ability to keep pace with technology.
More employees working on-the-go
The report also shows the laptop device has become as important as the desktop computer in corporate SA – both are regarded as important by exactly two-thirds of respondents. The importance level is the same across all industries, revealing the extent to which mobile productivity has become a pervasive need.
Furthermore, 42% of respondents reported employees were away from their desks, on average, around two to three times a day, probably taking their devices along with them to work on-the-go.
“The research shows that connectivity has become important across all categories of activity, at the workstation, moving about the office environment, and beyond the office. It’s no surprise that mobility continues to gain increasing prominence as a concept that the fourth industrial revolution has brought with it. As technology continues to evolve, we will almost certainly see a rise in adoption rate within crucial industries, as well as in the opportunities that will present themselves for organisations to transform,” concluded Goldstuck.
* All graphs from “The Mobile Corporation in SA 2019” report.
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