Algorithms will drive Africa’s digital business

Posted on June 9, 2016 12:04 am

Are you a human resource expert in Africa looking for a job? If the answer is yes, then I have bad news for you. Human resources and recruitment will face the greatest digital disruption with plenty of companies popping up specifically to host resumes, job ads, conduct online psychometric testing, and ultimately match candidates with roles.The disruption happening thanks to algorithms is happening all around Africa. The largest taxi company in the world, Uber, owns no taxis, but uses smart algorithms to connect drivers and passengers.Last week, Uber entered the Uganda market and just like in neighbouring Kenya, South Africa and Egypt, it will cause serious disruption in the transport sector in East Africa’s third largest economy.In South Africa, the largest telephone company in the world, WhatsApp, has no telecom infrastructure, but sends over 5 message per day in the country alone. Companies like Uber, WhatsApp presence in Africa clearly show that smart algorithms can disrupt an entire industry. But we are just at the start of this disruption and the coming decade will likely see all industries being disrupted thanks to algorithms. Companies will be valued not just on their big data, but on the algorithms that turn that data into actions and impact customers.

With the advance of technology, companies and consumers in Africa are generating more and more data. Some organisations, such as Jumia, Kalahari online shopping site create and store dozens of terabytes a day. But collecting and storing massive amounts of data is not enough to gain competitive advantage. In order to beat the competition, such African organisations must do more than simply analyse the data. It’s now about what actions you can derive from your data in order to add value by bringing in the algorithms. Algorithms define actions and they are pieces of software that are extremely good at very specific actions, much better than humans are. As a result, the more algorithms are used within organisations; the more people will be out of a job in the future. In fact, more than 55% of current jobs in Africa are at high risk due to computerisation.A recent study show that 64% of South Africa, Kenya and Nigeria jobs could be lost due to algorithmic business within two decades. A society with nearly three quarter of the workforce without a job does sound frightening, but if African countries prepare themselves now it also offers great possibilities to drastically improve it societies.

To help you understand how to apply algorithms to gain competitive advantage and ensure your business doesn’t become redundant, I will share some of the steps that makes automation of business is possible.It is important to ensure that businesses collect high-quality data because feeding their algorithms low-quality data which will provide poor results. Determining which processes within the business can be automated.It is also important to collect and store data. Algorithms require lots of it to make validated decisions. Strive to find relevant data sources that you can use and make your business environment smart by applying the internet of things to tap into new data sources. Develop algorithms and test, iterate, train, validate, improve in a continuous cycle to create better algorithms that can add value to your business.If you need an expert in this, contact me. Bottom line, the move towards algorithms is happening fast, much faster than most people expect, let alone policymakers can keep up with. It’s therefore important for African businesses to be aware how algorithms will change how they do business, how they live and how they run their societies because before they know it, algorithms have taken over Africa.

Contador Harrison