East African businesses will need to tap more into third platform technologies — cloud, big data, social business and mobility— in order to thrive in the new digital economy evolving across the region.

These technologies are broadly classified under machine-to-machine (M2M) communication which enables networked devices to exchange information and perform actions without the help of humans. It is used in remote monitoring in areas such as telemedicine, fleet management and logistic services.

According to a new report by the International Data Corporation (IDC) called FutureScape 2016 Predictions, manufacturers across the region are expected to use the Internet of Things (IoT) and big data analytics to generate new revenues.

M2M forms the basis of IoT— an environment in which objects (such as vehicles and buildings), animals or people are enabled to transfer data over a network without requiring human-to-human or human-to-computer interaction.

“As we enter this new digitally driven hyper-connected era, organisations that can rapidly scale their digital transformation efforts by leveraging the technologies of the third platform will thrive in the new digital economy,” notes the report.

As such, cloud, big data, social business, and mobility will be the top trends shaping businesses in 2016, the report notes.

Big data analytics automatically detects trends such as who prefers what, at what time, how much and gender. It helps in analysing large data sets whose volumes are rapidly increasing across the globe.

“Retail, hospitality and other service industries will use these technologies to boost customer experiences and revenues,” said James Mutua, senior research analyst at IDC East Africa.

Already, healthcare providers are using cognitive systems for quicker and more accurate diagnoses to prescribe the most effective treatments.

Financial services providers on the other hand will continue using massive data feeds and cognitive analytics to reduce fraud, waste and abuse, securing billions of dollars.

But while businesses in the region adopt these technologies, security will remain a key concern, the report notes.

“Cost-optimisation efforts and the lack of necessary skills in the region will drive demand for security services,” said Mark Walker, associate vice-president at IDC sub-Saharan Africa. “Increasingly, targeted and sophisticated cyber-attacks will lead to greater demand for cyber insurance while organisations in both the public and private sectors will also shift to tighter, more digitised supply chains in 2016.”

But how well can the region adopt these technologies? A combination of trade agreements, African unity pacts, and reduced reliance on commoditised trade are expected to facilitate this shift over the year.

The lower cost of technologies such as cloud and the reduced reliance on outdated communication standards will speed up adoption.

While technology connectivity including monitoring of the interconnected systems is needed, cyber fraud including SIM box fraud will require sophisticated solutions, the report notes. Other key challenges will be intra-and inter-African political will, skills shortage and the relationship between big and small enterprises.