The machines are coming for our jobs. This is a dystopian vision of the future of work popularized by the media and perpetuated in boardrooms across the globe.



South Africa is not immune from this misperception and here it has created a climate of fear and paralysis. &nbsp;Leaders, both civic and corporate, hesitate to encourage and incentivise the very digitalization needed to sustain and grow our economies out of a misguided fear of job losses and the ensuing civil backlash.



Ironically, the exact efforts to protect jobs from
technology may end up being the biggest cause of job losses in the future.
Because, without a shift to a Fourth Industrial Revolution (4IR) mindset,
businesses will progressively become less competitive against their global
peers, eroding their economic relevance and the jobs they sustain. 



Decision makers, therefore, need the courage to embrace
the paradox that while jobs might be subsumed by technology, only technology
will be able to create new ones.



Yes, automation and cognitive technologies will
eliminate jobs; mostly in search of improved efficiencies and productivity, and
to some extent to reduce reliance on expensive, rare and specialised skills. It
is futile and economically reckless to think otherwise.



The good news is that these same technologies will create demand for new skills and new jobs. The World Economic Forum (WEF) conducted an extensive study, leveraging insights from business leaders cumulatively responsible for 15 million people across a variety of sectors, skills and seniority levels globally. The study concluded that for every job that is lost to 4IR popularized technologies, 1.7 jobs will be created.



The consequent economic knock-on effects of these new
jobs, although not quantified, would undoubtedly be significant and further
contribute to net employment.



Unfortunately, the net new jobs will mostly remain in
the domain of the educated and available to those with the means to access and
afford the cost of sourcing new 4IR-related skills.



Green shoots



There are, however, green shoots of positive developments,
led by a new breed of digitally literate entrepreneurs. They have not
“invented” the technology, but instead leverage technology platforms to create
self-employment and economic sustainability. These digitally literate
entrepreneurs, many of them running micro-businesses, are creating employment
and economic activity in lower income level segments in the following key
areas:



1. Distributed value chains



Distributed value chains involve a category of people
who are generally unemployed or under-employed and are able to fulfil a
last-mile service gap by trading in their skills or available time. These
platforms link people with capacity and/or skills constraints to people with
the time and skills needed. This is done in a way that is dignified, safe,
peer-reviewed for quality of service, and enables higher wages compared to
traditional constructs. These platforms have been effective at creating jobs in
developed, low-unemployment economies. Their contribution to employment is
proven, significant and immediately tangible.



2. Collaborative consumption



It is often impossible for small organisations or
individuals to justify the ownership of an asset because of affordability, or
the ability to use the full capacity of the asset. The converse applies in
which access to the asset through a sharing mechanism enables the same benefit
as asset ownership. For example, digital platforms, such as Nigerian start-up
Hello Tractor, that provide access to key equipment on a pay-per-use basis
allow companies and individuals to reap economic benefits from utilising
technology without the associated costs of owning the equipment.



This in turn enhances efficiencies and competitiveness
of small organizations and levels the playing field for them in relation to
large ones. Collaborative consumption has many forms and different levels of
sophistication. At the extremes of technology, companies like 3D Hubs enable
the collaborative consumption of 3D printers, allowing the 3D printer to become
a shareable asset within its community.



3. Digital economic catalysts



Digital platforms increase levels of transparency,
which combined with the network effect of connecting communities and
frictionless transaction flow, is reviving sectors that have lost their appeal
due to a lack of transparency, reduced levels of trust and relevance to
specific demographic groups, and tedious or complex manual processes. These
sectors are being revived by digital platforms that economically empower
micro-entrepreneurs – or allow them to further empower other
micro-entrepreneurs. StokFella and Livestock Invest are good examples of
platforms that have shaken up entrenched concepts.



Digital technologies present both risks and potential.
The way forward is not fixed nor will it be easy, but with the right leaders,
and a mindset of urgency, curiosity and a preparedness to challenge existing
paradigms, we have a good chance of achieving an abundant future.



We also need citizens and entrepreneurs that see opportunity in this new era open to doing things that have never been done before – in ways not previously considered, leveraging technology never before available.



&#8211; Valter Adão is the Chief Digital and Innovation Officer, Deloitte Africa

Valter adao pic

Leaders Need To Embrace, Not Fear, The Digitalized Future Of Work

Most businesses are by now already at one or another stage of the
enterprise cloud transformation journey and a staggering 93 percent of business
executives who participated in Deloitte’s 2018 global outsourcing survey,
confirmed that their organisations were adopting &#8211; or at least considering
adopting &#8211; cloud.



Deloitte South Africa Finance and Enterprise Performance Management Leader
Phillip Hechter says that, “Cloud is not just here, but here to stay. With the potential
for significant cost savings and enhanced strategic value, cloud represents a
fundamental shift in how technology solutions are developed and in how they are
delivered”.



However, a migration to cloud is not without its challenges and the
bigger the organisation’s ambitions, the bigger those challenges.



Finance



In the latest iteration of its ‘Crunch time’ series, ‘<a href="https://www2.deloitte.com/za/en/pages/finance/articles/cfo-finance-guide-to-cloud.html">Crunch Time 8: The CFO Guide to Cloud</a>,’ Deloitte highlights
the need for the CFO to take an active role in navigating the challenges that
emerge during this process; as well as in making strategic decisions that leverage
the technology’s full potential.



The lowered costs on offer with cloud, are one of its biggest drawcards.
Broadly speaking, the operational costs are less expensive than those
associated with on-site technology and there exists the prospect for massive
returns on a cloud investment when what might be ‘unfamiliar’ cost categories &#8211;
like operating model optimisation, speed-to-market and innovation – are taken
into account, alongside more traditional ones.



New core finance
platforms



“Cloud solutions should be the default starting point for new core
finance platforms and some major Enterprise Resource Planning (ERP) providers only
offer cloud-native options now. The rest are at the very least, punting
cloud-optimised versions of their software. Certain components may need to
remain on-site for now and ERP providers will most probably continue to support
on-site technology for at least the next decade; but it is unlikely that this
will continue in the long run and the industry is now focusing its investments
in innovation, in cloud services”, says Hechter.



Financial treatment



The accounting for traditional computing investments is based on
established capitalisation principles, which are clearly set out in accounting
regulations. In contrast, when it comes to cloud investments the regulatory
framework is still evolving to reflect the fact that more and more
organisations &#8211; across the board &#8211; are turning to cloud-based offerings, in
order to satisfy their computing requirements.



As a result, the process of determining the appropriate financial
treatment for cloud investments is a somewhat subjective one at the moment and
each case &#8211; along with its unique facts and circumstances &#8211; needs to be
carefully considered.



In terms of tax, a move to the cloud might impact an organisation’s
current tax structures and allowable tax treatments vary in accordance with a
number of different factors.



Negotiating
contracts



Hechter adds that, “It is important that the approach taken in
negotiations is a holistic one and that all deals take into account the costs,
benefits and impacts for all parts of the business. Thus, it is crucial that
Finance works together with Legal, Procurement and IT. External advisors can
also prove valuable, especially in organisations that lack experience in cloud
contracting”.



Cloud vendors typically build their services and pricing models and –
more often than not – their contracts, around standardisation. This means that
they are likely to push back against any major changes to standard agreements.
Cloud providers are competing for market share, though, and so there exists the
opportunity to negotiate for extra benefits and service capabilities &#8211; which
could be a key source of competitive differentiation.



Cloud brings with it a range of opportunities for real innovation
including reduced time-to-market, scalability and a way to drive agility and
innovation. There are a host of examples of companies that are using cloud to
transform their service and product offerings, improve efficiency, increase
customer engagement and ultimately reap significant rewards as a result. It can
be done but at the end of the day, what you get out of it depends on what you
put in.

deloitte

A Business Case For Cloud And Why Finance Needs A Seat At The Table

Deloitte, known popularly in the United States as one of the &#8220;Big Four&#8221; accounting firms, has confirmed that it was the victim of a cyber attack. Not all of the details have been made public, but a Deloitte spokesperson noted that the attacker accessed data from an email platform.
According to the spokesperson, a review of the email platform is now complete. Their findings? While the company didn&#8217;t provide specific information, the spokesperson did say that, &#8220;Importantly, the review enabled us to understand precisely what information was at risk and what the hacker actually did and to determine that only very few clients were impacted and no disruption has occurred to client businesses, to Deloitte’s ability to continue to serve clients, or to consumers.&#8221;
<a href="http://www.forbesafrica.com/technology/2017/06/28/mayday-mayday-ive-hacked/" target="_blank" rel="noopener">Mayday! Mayday! I&#8217;ve Been Hacked</a>
Deloitte’s response to the attack has included &#8220;implementing its comprehensive security protocol and initiating an intensive and thorough review which included mobilizing a team of cyber-security and confidentiality experts inside and outside of Deloitte; contacting governmental authorities immediately after it became aware of the incident; and, contacting each of the very few clients impacted.&#8221;
The company did not release any hard numbers or indicate whether the attacks affected individual clients. Speculation within the cyber security world has theorized that the attacks were focused on corporate clients and not individual clients but that information has not been confirmed.
No one person or company has yet claimed responsibility for the hack. However, the fact that the attack appeared to target email systems to gain access to client information &#8211; possibly corporate client information &#8211; would suggest that the hackers were cyber criminals looking to steal data that could be sold.
<a href="http://www.forbesafrica.com/technology/2017/06/28/petya-notpetya-latest-ransomware-deadlier-wannacry/" target="_blank" rel="noopener">Petya Or NotPetya: Why The Latest Ransomware Is Deadlier Than WannaCry</a>
It&#8217;s the second announcement of a high-profile cyber hack this month. Earlier, Equifax <a href="https://www.forbes.com/sites/laurengensler/2017/09/07/equifax-says-143-million-americans-potentially-impacted-in-cyber-attack/?utm_source=TWITTER&amp;utm_medium=social&amp;utm_content=1064233649&amp;utm_campaign=sprinklrForbesMainTwitter#5d45a3a95097" target="_blank" rel="noopener">announced</a> that hackers had gained access to personal information for nearly 143 million Americans. The hack raised eyebrows about security at the company and eventually resulted in the <a href="https://www.forbes.com/sites/halahtouryalai/2017/09/26/equifax-ceo-out-after-massive-security-hack/#44596f3321ee" target="_blank" rel="noopener">resignation</a> of Richard Smith, the company&#8217;s Chief Executive Officer (CEO).
Deloitte offers audit &amp; assurance, consulting, risk and financial advisory, risk management, tax, and related services to clients around the world. Two weeks ago, Deloitte Global <a href="https://www2.deloitte.com/global/en/pages/about-deloitte/articles/global-revenue-announcement.html" target="_blank" rel="noopener">announced</a> revenues of $38.8 billion for the last fiscal year. Among the industries credited with driving that growth? Risk Advisory revenue.
A spokesperson for the company added that &#8220;Deloitte remains deeply committed to ensuring that its cyber-security defenses are best in class, to investing heavily in protecting confidential information and to continually reviewing and enhancing cyber security.&#8221; &#8211; <a href="https://www.forbes.com/sites/kellyphillipserb/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Kelly Phillips Erb</a>, FORBES STAFF

Big Four Accounting Firm Deloitte Confirms Cyber Attack

It’s a hot summer’s day in Sandton, Johannesburg. As we meet, the sun blazes bright like Titan’s fiery wheels. Brightness has played a big part in Johan Botes’ journey to entrepreneurship. On this day, the future is even brighter; he has just opened an office in Fourways, Johannesburg, 254 kilometers away from Mokopane, in northern Limpopo, where he took his first breath in 1962.
“I am so happy that the company is growing from strength to strength and most importantly providing jobs for young people who deserve every opportunity,” he says.
Botes employs 55 permanent staff and 12 contractors in five countries. The average age is 27. The company merges accounting and IT to make businesses quicker and reliant on fewer staff.
“The drive and energy of our team is one reason we’re growing so fast. We recruit entrepreneurial, self-motivated people at a young age and embed them into our business. They’re adaptable, quick to learn and ready to work overseas independently. We’re very strategic in our recruitment process – we’ll only take people with the right cultural fit, business acumen, and energy level to succeed in a global workplace,” he says.
Building a successful business was hard and sweaty. For three years after high school, Botes came face to face with rifles and drill in the army as a conscript.
With teachers for parents, he was inspired to save for university fees. Hard work earned him a career as a chartered accountant, working for Deloitte, before going into private practice as an auditor and then returning to Deloitte for a five-year stint. Here he learned about the enterprise resource planning (ERP) market. Botes swapped his well-paid job to start Consilia Technology Investments – a company that provides technology for business – in 2012.
“First we started the business as Consilia Consult; after a year, we realized we are not a consulting company but a technology business and we changed it to Consilia Technology. We can take all your database services; optimize it to make the business work,” he says.
According to Botes, the management information system integrates areas such as planning, purchasing, inventory, sales, marketing, finance and human resources. He started the business after realizing that clients in South Africa were finding the existing high-end ERP packages expensive and complicated. He decided to build a business around Sage ERP X3 software – a solution designed to be more flexible and affordable.
“Our view is that accountants are a dying breed. Systems are taking over. You can automate almost all the accounting systems in a business today through, for example, barcoding and scanning. It changes the fundamentals of business completely. One of our clients is a logistics company that requires daily costs per vehicle everyday per component such as tyres, fuel and maintenance. We give them a report per vehicle in different categories so they can see which vehicles are making profit, without having to capture one thing. Everything is available on a phone, iPad or computer. You can sit in front of a TV and authorize payments,” he says.
Botes says that the immediate priority for Consilia is to bed down its businesses in its new offshore territories before looking at other markets.
“We’ve been cash-generative since the start and have not had to take on debt to grow our business. We believe that if we offer a skill that is in demand worldwide, and do good work at a good price, we’ll continue to grow strongly in the years to come.”
He says there is a market for businesses like his in the continent and entrepreneurs should take note and keep employees smiling.
“As a young person, to start up a business and get funding is difficult. Since we started, 21 people have gotten shares. They haven’t paid for them yet but they pay from dividends. They have three years to pay up. We give them a discount of 80 percent. If you show someone that you trust them and you give them something, they become involved and want to see the business grow. One of the young guys said to me no one in his life has ever given him anything,” he says.
The future seems bright for Botes.

‘Accountants  Are A Dying Breed

In recent years, African countries have steadily emerged as strong consumer markets at a time when emerging economies are struggling with sluggish local demand. Fast-growing economies have greatly improved household incomes over the years as reflected by the rising household consumption expenditure.
Already international consumer businesses have taken notice of this and are planning to invest. A recent Deloitte EMEA survey: Consumer businesses priority markets for 2014-2015 ranked Africa third, behind the European Union and China, as an important market for investment this year by European consumer businesses. The survey confirmed a growing trend since the close of 2013, retail and consumer sectors are among the top three investment sectors by foreign direct investments.
No doubt, more households with discretionary spending means Africa’s consumer market is poised for even greater growth. Data from the World Bank shows that between 2000 and 2012, Africa’s household final consumption expenditure grew at an average annual rate of 10.7%, rising from $360 billion and reaching nearly $1.3 trillion. Consumer demand is now projected to add around $ 1.1 trillion to Africa’s Gross Domestic Product (GDP) by 2019, with Ethiopia, Uganda and Mozambique expected to be the fastest expanding markets. Clearly, rising prosperity is slowly becoming an important component in Africa’s future growth.
It is widely believed that much of the increasing demand is attributed to the growing middle class. Owing to their ever expanding varied tastes and preferences, this group has served as an important force behind the current consumer boom. Over the three decades ending in 2010, the middle class has grown by 3.1%, compared with the overall population growth of 2.6% effectively accounting for 34% of Africa’s population or 355 million people by the end of that year. It is forecast that by 2030, about half a billion Africans will join this class and a further half a billion by the year 2060.
Another important factor contributing to the African consumption story is the rapid urbanization. Migrations to bigger cities have created large clustered urban centers which are supporting growth in domestic demand. According to the United Nations (UN), Africa’s urban population as a percentage of the total population stood at 40% last year, up from 27% in 1980. The same research projects that urban population will grow to 47% by 2030.
Closely tied to urbanization is the young population. Younger Africans who form a large share of the rising middle class, are estimated to number at more than 200 million, or just over 20% of Africans. This dynamic demographic is expected to grow to 321 million by 2030 which translates into a 57% growth from 2010. Potentially, young African consumers are expected to account for even stronger demand for consumer goods in the future. Already demand from the 15-year-old to 24-year-old age group is driving growth of the modern retail and sales of branded goods. Interestingly, a recent Deloitte survey of this group revealed that the majority of younger consumers use mobile phones to access internet. Investors need an effective channel to engage with this group, especially across large markets.
In view of all this, it is highly probable that as wealth, which historically has been concentrated within the elite, begins to trickle down to the masses, the region will become a magnet for international capital. Evidently, for companies seeking to invest, it is clear that Africa is not suffering from a lack of demand, but perhaps from a lack of supply. With growth projected by the World Economic Outlook at around 7.7% annually to 2019 (this is twice the rate projected for advanced economies in the same period), potential investors can rest assured of a sustainable growing consumption trend.
Presently, the region is the second fastest growing economic region behind Asia. Certainly, it is undeniable that Africa is indeed an attractive consumer market that is worth tak

half a billion reasons  to be optimistic

The latest bid to become the economic hub of Southern Africa has come from KwaZulu-Natal (KZN), on the east coast of South Africa.
The Dube TradePort (DTP) in Durban is earmarked to be the catalyst of this transformation and is under consideration to be classified as a Special Economic Zone (SEZ), owned by the provincial government and managed by a corporation. The DTP aims to expand trade, encourage economic development, create jobs and increase foreign direct investment (FDI) by linking transport to connect the province to international economies. It is part of the province’s 20-year plan with R560 billion ($56 billion) worth of projects in the pipeline. It’ll employ up to 35,000 people.
The KZN MEC for economic development and tourism, Mike Mabuyakhulu, says that India and China’s large populations make them attractive destinations for South Africa’s exports. The province is looking for opportunities to increase trade with other southern African countries as well as increase tourism.
The DTP is home to the R7.8 billion ($ 780 million) King Shaka International Airport and lies between the Richards Bay and Durban ports. It is situated on the N2 development corridor that connects the Eastern Cape with Mozambique.
According to Mabuyakhulu, seaborne trade accounts for almost 80% of South Africa’s imports and exports. The port of Durban handles most of the trade in southern Africa, handling around 2.7 million TEUs.
The DTP zones are separate projects that interlink. Dube iConnect is a 24 hour telecommunications and IT service provider that will be using 36 km of fiber optics and a 10 gig pipe to service all the DTP zones.
The Dube Cargo Terminal is a three-year-old state-of-the-art terminal with the capacity to handle 1,000 tons per annum, with plans to increase it to 2 million tons by 2060. The terminal houses Customs, the departments of Agriculture as well as Health, the South African Revenue Services and South African Border Police—200 meters from the Dube TradeZone.
The TradeZone houses logistics, warehousing, light manufacturing, assembly, processing and high value cargo. It also includes the R28 million ($2.8 million) state-of-the-art flight kitchen facility. There has been a recent buzz among investors who are expected to sign contracts soon.
Dube Agrizone is 20 hectares that include a greenhouse hydroponics facility. Sixteen hectares of greenhouse produce 40 tons of fresh produce—including cucumbers and tomatoes—for large retailers, while a separate greenhouse is being developed for cut flowers and pot plants. The next question is what this will mean for the small farmers in the province?
The MEC says efforts will be made to integrate them into the new project. The idea for the zone dates back to 1994, when new ideas were sought to increase agricultural output and stimulate exports.
At the center of the R5 billion ($500 million) Dube City, three minutes from the airport, is Dube Square. The city will have accommodation, conference facilities, restaurants, retail and offices.
A memorandum of understanding (MoU) with Indian conglomerate, Action Group, has been signed for $217 million to build a mini city nearby that is expected to attract close to $2.2 billion in FDI.
The provincial government will retain ownership of the DTP and investors will be given long-term leases.
According to senior managers at Deloitte and Touché some of the challenges facing the DTP are the uncertainty around the SEZ regulations and the inaccessibility to rail. They feel that “government can play a significant role in helping the DTP realize its potential of becoming an economic hub”, through training of workers and offering greater flexibility with government incentive packages for specific projects. Deloitte and Touché warns that final SEZ legislation must meet the needs, of not only the zones for which it is being created, but also the expectations of foreign investors.
This could be a thin tightrope to walk on the way to the promise of prosperity.

Tag: Deloitte

FORBES AFRICA SOCIAL MEDIA

Leaders Need To Embrace, Not Fear, The Digitalized Future Of Work

A Business Case For Cloud And Why Finance Needs A Seat At The Table

Big Four Accounting Firm Deloitte Confirms Cyber Attack

‘Accountants Are A Dying Breed

half a billion reasons to be optimistic

Africa’s next hot spot