Six technology trends that SMEs should watch out for in 2017
Business
Sage Chief Technology Officer Klaus-Michael Vogelberg talks about the role chatbots, collective intelligence and blockchain will play at start-up and scale up enterprises in 2017
Sage, the market leader in Cloud accounting software, has predicted that chatbots, collective intelligence and blockchain are some of the big technology trends that will change the way entrepreneurs run their businesses in 2017. Sage Chief Technology Officer, Klaus-Michael Vogelberg, said: “As every business – big or small – is transforming more or less intensively into a tech-enabled business, today’s entrepreneurs should be on the lookout for the opportunities these technological developments can bring to their business.”
Vogelberg sees six major trends in 2017 that could make a big difference to the way business builders will work in 2017 and beyond.
Trend #1: Chatbots and autonomous interfaces
Autonomous interfaces such as chatbots or digital agents will become increasingly common on different devices and user interfaces which entrepreneurs use to manage and control their businesses. These interfaces will dramatically change the way that humans and computers work and interact with each other. While, in the past, people used a keyboard or mouse to interact with their PCs, they will gradually start talking with their systems or using gesture control such as hand, head or eye gestures to interact with them.
The user experience will not only become more convenient but also more enjoyable – these systems will work autonomously and have self-learning capabilities. Eventually, software could act without user intervention, or ask a certain question only once and use this information for all further activities.
In June 2016, Sage launched the first accounting chatbot, PeggTM. Pegg acts as a smart assistant that allows users to track expenses and manage finances through messaging apps such as Facebook messenger and Slack. Pegg hides the complexities of accounting and lets entrepreneurs manage finances through conversation, making the process as simple as writing a text. By digitising information at the point of capture, it takes away the hassle of filing receipts and expenses, eliminating the need for paper and data entry.
Trend #2: Artificial & collective intelligence
According to Vogelberg, artificial and collective intelligence is another major trend to look out for, even for smaller companies. With mushrooming data volumes being generated by all sorts of sensors and devices on the one hand (see trend #6), and computer power and special analysis software and intelligent agents becoming increasingly affordable and powerful on the other, companies need to find ways to extract knowledge from today’s wealth of Big Data.
Sage’s Klaus-Michael Vogelberg therefore advises SMEs to “team up”. “If small and medium-sized enterprises join forces and – while considering their corporate data protection policies and personal rights laws – share, for example, computer power and data with other companies in a structured and systematic manner, they could profit from this collaboration by receiving a better and larger data pool and superior data intelligence. Similar to crowdsourcing mechanisms, this enriched data pool would enable companies to better understand how customers behave, what they need, what to offer them and the business areas to invest in.”
Trend #3: Blockchain – or how to create trust in the digital age
According to Sage, business builders should also carefully analyse if, and how, the new blockchain technology could impact their current business models. Particularly all those industries which work as intermediaries between two parties – such as lawyers, notaries, or real-estate or financial brokers – could be affected by this new, innovative approach.
Bookkeepers and accountants might also be affected in the way they do business in the future, as blockchain has the potential to eliminate a significant part of the workload – such as checking and booking transactions, transferring money or paying invoices – handled by these professions today.
Why could this happen? Blockchain organises transactions of digital assets between two parties in a radically new way. Instead of using middlemen or intermediaries such as banks, notaries, state authorities or trading platforms to legitimise the exchange of certain assets – such as digital properties, digital trading goods, digital contracts, or even financial transactions via digital currencies such as Bitcoins – blockchains allow individuals to transfer these assets in a direct, safe, secure, and immutable way between each other.
A decentralised, distributed ledger, essentially an asset database shared across multiple participants, combined with crypto-economic algorithms serve as the technological basis of a blockchain. All participants of a blockchain (so called nodes) have access to the distributed ledger, which contains an inventory of all the relevant digital assets.
All parties within this network have their own identical copy of the ledger. Any changes to it are applied to every copy in a matter of minutes or even seconds. Thus, the system is transparent and creates trust among all nodes without the need for legitimisation by any other third party authority.
Trend #4: Revolutionizing the movement of money
The way people use money and transfer their payments from one account to another has already changed dramatically: at the frontend, in-app payment solutions nowadays enable users to effortlessly make one-click payments and purchase goods via mobile devices or websites. This functionality is already available in many apps today. But at the backend, systems such as accounting software are less user-friendly and less integrated.
For example, companies currently have almost no possibility to make one-click invoice payments or easily manage their financial transactions between partners, suppliers and their bank with a fingertip.
In 2017, more and more new solutions will allow companies to establish an end-to-end payments value chain with their suppliers and customers. These new solutions enable ubiquitous anytime anywhere, immediate and omni-channel payments and will be fully integrated into the financial accounting systems of tomorrow’s enterprises. All parties, such as e-commerce platforms, banks, fin-techs or partners, will profit from open API standards which will be used for creating new services and enable seamless, fully-automated processing of payments and financial transactions.
At Sage Summit in July 2016 Sage announced its partnership with US Bank, a technical example for this paradigm change in payments. The HYPERLINK "https://smallbiztrends.com/2016/07/sage-partner-us-bank-cash-flow-statement.html" AP Optimizer for HYPERLINK "http://www.sage.com/us/sage-live" Sage Live that Sage built in partnership with U.S. Bank marks a first truly digital accounting and payment solution that enables start up and scale up businesses to manage their cash flow through dynamic integration with customers. AP Optimizer is integrated in Sage Live and determines for example the best time to pay bills and the best method for payment to optimise cash flow in near real-time, and then carries out the payment.
Trend #5: Platform-based infrastructure
In 2017, more and more SMEs will replace their stand-alone, on-site software systems with integrated, cloud-based software solutions that operate on global Cloud platforms such as Salesforce.com who are offering their users access to a wealth of business apps and integrated services. Moreover, companies will also benefit from mobile-app platforms such as the one operated by the Apple Mobility Partner Program.
“The big benefit of these platforms is that they give even smaller companies access to innovative business software solutions and services which these companies would not have been able to afford five years ago. To some extent, these types of cloud platforms are democratising the way in which companies gain access to state-of-the-art apps and smart and scalable technologies,” says Klaus-Michael Vogelberg.
“They allow business builders to discover new ways of working and give them the infrastructure needed to receive every kind of data from partners or the Internet of Things, analyze it, and then – in a “citizen developer” style – create something new and productive,” the Sage CTO says.
Trend #6: Internet of Things will create new services and job profiles
Small and medium-sized enterprises should be on the lookout for new possibilities that emerge with the realisation of the Internet of Things. Multiple data streams originating from all sorts of sensors built into e.g. machines, cars, mobile and immobile goods, clothes or even human beings (e.g. for medical monitoring purposes) will result in a true treasure trove of data, thus creating all sorts of new services.
SMEs should think about how to use these data streams to grow their business: Mechanics will develop new services such as predictive maintenance for all sorts of technical infrastructures. Logistic companies will optimise e.g. the navigation of their truck fleets by using traffic data from many different sources including smart city data from traffic lights, streets or other vehicles.
Concierge services will develop all sorts of surveillance services with the realisation of new smart home technology. Retail companies and shop owners might connect to smart home devices such as refrigerators or Amazon-style dash buttons to supply customers automatically and predictively with goods and services. Mobile medical care services will innovate their work with the assistance of all sorts of new devices e.g. to improve their support of elderly people living alone at home.
Early last year Sage demonstrated its partnership with TomTom telematics which enables Sage Live customers to keep track of vehicle journeys, and feed data into the accounting process in real time.
In summary, Sage Chief Technology Officer Klaus-Michael Vogelberg said: “In 2017, every business will need to start thinking of itself as a technology business. To stay competitive, they will need to grasp the opportunities that this development brings with it and change almost every aspect of today’s more or less traditional ways of working.
The good news is that this technology means that we believe that very soon, business admin could become completely invisible, as easy as messaging a friend, or even completely automated, as machines learn like humans. This will empower entrepreneurs to stay focused on building their businesses, driving growth in the economy and contributing to their communities – not basic admin.’
Business
Global recovery from COVID-19 remains unbalanced
As COVID-19 and its variants continue to cast a shadow over the world’s health systems and economies, the level of uncertainty and strength of the economic recovery will vary across countries. The real GDP in all G-20 countries is expected to grow compared to the previous year, but some countries will take longer than others to return to full capacity.
According to Mooody’s Global Macro Outlook 2021-22 report released this week, precautionary behavior and official restrictions are still hampering interpersonal interactions. The resulting toll on global economic activity has been staggering, even as the economy has also shown a remarkable degree of resilience.
Overall economic outcomes in 2020 exceeded Moody’s forecasts in most countries because of stronger-than-expected rebounds in the second half of the year. Aided by technology, many people and businesses quickly adapted so that they could carry on with daily activity with reduced in-person interactions.
However, Moody’s says the recovery remains unbalanced, with the pandemic affecting individual businesses, sectors and regions very differently. According to the group, goods demand has almost fully recovered because goods can be produced and consumed with limited in-person interactions, while the recovery in service continue to lag.
Within services, businesses that were able to effectively deliver their products at arms-length have stabilized, if not prospered. Large businesses with access to cheap funding have performed better than small and mid-sized firms. According to the report, the transportation, hospitality and leisure and arts sectors continue to languish, but the information technology, consumer goods, pharmaceuticals and financial sectors have thrived.
According to the report, many individuals around the world (including Botswana), have lost their jobs and continue to face employment uncertainty, but on the flip side, the forced decline in household consumption and the rise in asses prices have buttressed household financial balances at an aggregate level. Moody’s reported that all G-20 countries will post growth rates in 2021 and 2022, but the pace of recovery will vary significantly.
“The COVID-19 shock has exposed differences between countries in terms of political leadership, community health management, fiscal and monetary policy response, economic structures and inherent economic dynamism. Public health considerations drove the economic shock of the pandemic. In that sense, the steep declines in GDP in 2020 across advanced and emerging market countries were less a reflection of underlying weaknesses in the economy, and more a function of the combined effects of the spread of the virus and the stringency of lockdown measures,” says Moody’s.
Economic outcomes will remain closely tied to the pandemic, Moody’s said. “The quicker countries can curb the spread of the virus, the faster their economic activity will recover. Otherwise the costs of keeping parts of the economy shut, in terms of lost income and revenue, will keep adding up. The longer the crisis lasts, the more difficult it will be for governments to compensate the private sector for its continuing losses.”
Without adequate government support, Moody’s predict that large-scale deterioration in asset quality will ensue. Such detrimental effects, it says, could eventually transmit the shock through financial channels to other parts of the economy.
“We have cut or estimate of the 2020 contraction for the G-20 countries. We now expect a collective contraction of 3.3%, compared with our previous estimate of 3.8%, because of a better-than-expected recovery across a wide range of advanced and emerging market economies in the second half of the year. We expect the G-20 countries to grow by 5.3% in 2021 and 4.5% in 2022, up from our prior forecasts of 4.9% and 3.8% respectively.”
US ECONOMY TO LEAD THE GLOBAL SERVICES DEMAND RECOVERY
The US economy advanced at a 4.0% annualized rate in the fourth quarter 2020, but the headline figure masks the fact that the economy has lost momentum since November, when COVID-19 cases began to rise. Moody’s says it expects this current moderation in economic growth to be temporary. Economic momentum will likely puck up pace over the course of 2021 and 2022, supported by: enhanced pandemic control, significant additional fiscal support to the economy and a more predictable policy environment.
With infection rates now starting to fall, economic momentum should naturally pick up in the second quarter and into the summer as individual states progressively ease up social distancing restrictions, Moody’s reports. “We believe that a stronger pandemic management response from the Biden administration, will increase public confidence and allow for a relation of restrictions over this year and next.”
COVID-19 SHOCK EXACERBATES EXISTING STRUCTURAL CHALLENGES IN SOUH AFRICA
South Africa’s economy is expected to growth by 4.5% in 2021 and by 11% in the following year, following an estimated 7.0% contraction last year. According to Moody’s, this will make South Africa’s recovery one of the weakest among emerging market countries. The economy has struggled to build momentum for many years, and as a result suffers from chronically high unemployment. The COVID-19 shock has made the economic situation all the more challenging, says Moody’s.
Business
BOL, MDC advised to take interest in Kavango oil tale
Reconnaissance Africa, a Canadian exploration company has started piercing the natural resource-rich lands of Kavango basin in Namibia, the company in searching for oil and gas.
The prospective area stretches into North West district of Botswana, the company through its local subsidiary Recon Africa Botswana has been given the nod by Ministry of Mineral Resources, Green Technology & Energy Security to explore petroleum mineral for four (4) years.
Amid all the negative reports around the company’s drilling activities in the Kavango basin, which covers ecosystem components feeding into the mighty Okavango Delta, the bottom line is that there are prospects of billions of dollars beneath the area in form of oil and gas-and Recon Africa is out to unearth the treasures.
Member of Parliament for Selibe Phikwe Dithapelo Keorapetse says Botswana should strive to participate in the exploration and development of these potential oil and gas deposits in the North West district. Contributing to the 2021/22 budget speech on Monday Keorapetse cautioned government against watching from afar while a potential multi-billion pula industry unfolds in the Okavango area.
He implored Botswana Oil Limited(BOL) and Mineral Development Corporation Botswana (MDCB) both state owned enterprises, to take up equity stakes in the exploration activities as early as now to “ rather than being spectators and waking up late when the foreigners are enjoying the billions”.
ReconAfrica through its subsidiary Recon Botswana was issued an exploration license under the Petroleum Act to explore for petroleum minerals in the North West District of Botswana, on 1 June 2020, for a period of four years.
“Botswana Oil as the country ‘s petroleum investment company together with MDC-a state owned mineral interest holding company must come together and acquire a stake in the ongoing exploration activities ,not to wait until Recon is making money and you say you want shares”. Keorapetse made reference to Karowe mine which Botswana’s diamond mining partner De Beers Group sold to Lucara over a decade ago while still at exploration stage.
Lucara bid on the site, and its internal partner Lundin provided a bank guarantee to De Beers for fifty million dollars, capturing some seventy per cent of the stake.Soon afterward, Lucara bought the remaining stake by acquiring De Beers’s London-based junior venture partner, African Diamonds. Lucara now owns AK6 (now Karowe Mine), having spent a little more than seventy million dollars.
The mine has since developed into a prolific rare gem producer celebrated worldwide, having unearthed some the world’s largest diamond ever in history , such as the over 1000 carats Lesedi La Rona, Sewelo and the magnificent 813 carats Constellation.
“We are now mulling acquisition of shares in Lucara but when transactions were happening in 2009 we were just spectators, we could have acquired shares back then when they were affordable now it is expensive to buy into Karowe mine, we must not make the same mistake with this oil and gas projects” said Keorapetse urging Government to be pro-active and move quickly to approach Recon Africa for a stake in Recon Africa Botswana.
ReconAfrica is a junior oil and gas company engaged in the exploration and development of oil and gas in North East of Namibia and North West of Botswana—the Kavango Basin. The company officially launched the oil and gas exploration project in Namibia in early January 2021. The exploration activities are taking place in the Kawe area, Kavango East Region, Namibia.
ReconAfrica holds a 90% interest in a petroleum exploration license in Namibia which covers the entire Kavango sedimentary basin in Namibia, the remaining 10% is owned by Government of Namibia. The exploration licence covers an area of 25,341.33 km2 (6.3 million acres), and based on commercial success, it entitles ReconAfrica to obtain a 25-year production license.
Further, ReconAfrica holds a 100% interest in petroleum exploration rights in Botswana over the entire Kavango sedimentary basin in the country. This covers an area of 8,990 km2 (2.2 million acres) and entitles ReconAfrica to a 25-year production license over any commercial discovery. The company acquired a high-resolution geomagnetic survey of the license area and conducted a detailed analysis of the resulting data and other available data, including reprocessing and reinterpretation of all existing geological and geophysical data.
The survey and analysis confirm that the Kavango Basin reaches depths of up to 9,000 m (30,000 feet) under optimal conditions to preserve a thick interval of organic rich marine source rock, and is anticipated to hold an active petroleum system.
“We believe that the Kavango Basin is another world class Permian basin, analogous to the Permian basin in Texas It is estimated that the oil generated in the basin could be billions of barrels. Recon Africa’s initial goal is to establish the presence of an active petroleum system with its fully funded 3-well drilling program starting early January 2021.
Business
Lucara suffers P287 million loss in 2020
Canadian mining company, Lucara Diamond Corporation, well known globally for producing rare gems of unprecedented quality, has not been spared by the 2020 global market downturn caused by the COVID-19 pandemic.
In their financial results for the year ended 31st December 2020, released from Vancouver Canada late Monday, the junior minor reported a significant net loss of $26.3 million for the year (approximately P287 in Botswana currency).
This according to the financials is a loss of $0.07 loss per share, which is a significant decline when compared to net income of $12.7 million ($0.03 per share) in 2019. The company which wholly owns and runs Botswana’s Karowe mine registered total revenues of $125.3 million (over P1.3 billion), a 34 percent drop compared to $192.5 million (almost P2 billion) recorded in 2019 or $335 per carat from $468 per carat in 2019.
The decrease in revenue resulted in adjusted EBITDA of $18.4 million, a decline when compared to adjusted EBITDA for the same period in 2019 of $73.1 million. Lucara executives explained that total revenue decline was a result of challenging market conditions, a longer ramp-up for production and polished sales in the latter half of 2020 under the HB supply agreement.
“As a result, revenue from certain polished diamonds from Lucara’s highest value stones that would otherwise have been recorded as revenue in 2020, is now expected to be realized in 2021.” reads a commentary alongside the figures.
During the year ended December 31, 2020, Lucara sold 373,748 carats at an average price of $335 carat. Diamond sales for the fourth quarter of 2020 were held through a combination of regular tenders, Clara, for diamonds less than 10.8 carats, and through HB under the supply agreement for those diamonds greater than 10.8 carats.
The Company recognized revenue of $42.4 million or $402 per carat from the sale of 105,648 carats. Price recovery was observed in most size and quality classes. Of note, prices achieved for goods sold on Clara (under 10.8 carats in size) in January 2021 have now recovered to the level of pricing achieved early in 2020.
For the year ended December 31, 2020, Lucara registered revenue totaling $55.2 million from the two agreements with HB, including an accrual for variable consideration of $7.2 million related to “top-up” payments arising from polished diamond sales in excess of the initial purchase price paid to Lucara.
With global restrictions impeding travel for many diamantaires, Lucara says interest in Clara grew significantly in 2020 and the number of buyers on the platform increased from 27 to 75.
During 2020, Clara began selling stones on behalf of third party sellers, which was a significant objective for the year.
“As Clara becomes the online marketplace of choice for rough buyers, discussions are underway with several producers to begin trials for the sale of their diamonds on Clara” the company said
Amidst challenging circumstances for the diamond industry in 2020 Lucara forged ahead with the Karowe mine underground project.
During the year period under review $18.7 million (over P190 million ) was spent on project execution activities including the following: Site earthworks (consisting of laydown preparation and clearing of shaft and surface infrastructure locations), geotechnical test pitting and drilling, and completion of two pilot holes at the shaft locations, a 746 metre hole for the ventilation shaft and a 768 metre hole for the production shaft.
The Company was able to complete on-site earth works and geotechnical studies by using local contractors while a State of Emergency remained in effect in Botswana. Long lead time item orders were also placed for shaft muckers, and hoist and winder refurbishment was initiated. In addition, power line engineering and detailed shaft design and engineering (consistent with original targets for 2020) progressed.
In Q4 2020, the Government of Botswana approved the proposed powerline route and granted a 25-year extension to the Karowe Mine License to 2046, sufficient to cover the remaining open-pit life (to 2026) and the expected life of the proposed underground expansion, currently planned to 2040.
Lucara says it’s currently actively exploring opportunities to arrange debt financing for the underground expansion for those amounts which are expected to exceed the Company’s cash flow from operations during the construction period. The underground expansion program has an estimated capital cost of $514 million (over P5 billion) and a five year period of development.
President & Chief Executive Officer of Lucara Diamond Corporation, Eira Thomas said the measures that Lucara took early in the pandemic, including the decision not to sell rough diamonds in excess of +10.8 carats after Q1, helped protect and support prices for large, high value diamonds that account for more than 70% of the company’s revenues.
“These efforts in conjunction with our transformational supply agreement with HB Antwerp executed in July, resulted in strong price recoveries by Q4, a trend which has continued into 2021.”
Thomas said the recent recovery of two, high value +300 carat stones “continue to highlight the extraordinary nature of the Karowe resource and underpin the rationale for underground expansion, extending our mine life out to at least 2040”.