South African companies have been extending operations north of our borders for years now. The ICT industry is no exception, although in this case the major migration only started five or six years ago.
In those years, local players have learned valuable lessons around the complexities of logistics and distribution, on a continent whose size many global corporations fail to grasp.
The importance of partnering with local companies, and committing to in-country operations, as opposed to merely dumping old technology and running, has been highlighted many times. The continued predominance of the grey market remains a serious issue that vendors need to tackle.
The complexities of working on a continent that speaks a multitude of languages, where each country has its own customs and excise requirements, where it is often easier to travel from SA to any given country via Europe, and the time-consuming nature of travel in Africa, have also been discussed endlessly.
What is becoming increasingly important for local companies expanding into neighboring states (and those further north) is sensitivity towards the diverse cultures on our continent. As UUNet Africa director, Guy Clarke, points out: ?SA is increasingly being seen as the America of the continent. South Africans? arrogance and ignorance about other countries in Africa comes across strongly. When you get past that and embrace the culture and skills in these countries, you would be amazed by what you can achieve.?
Business Connexion Group Ltd. executive: technology infrastructure and Africa, Tim Schumann, concurs: ?Local companies expecting to achieve successes need to temper their arrogance by understanding the environments in which they operate and respecting the business culture in the different countries.?
?We have also seen a definite preference from African countries to deal with their African counterparts versus other internationals, even if the technology is the same,? he adds. ?However, SA companies doing business in Africa can encounter some level of animosity, due to their insensitivity to local cultures.?
A further insensitivity on the part of local companies is that they frequently refer to Africa as if SA is not part of it, and try to divorce local operations from those in other parts of Africa. This attitude, naturally, generates resentment.
Finance
Attitudes aside, possibly the largest challenge that Africa faces, in terms of implementing ICT infrastructure, is finance. Says Accenture country MD for Nigeria, Dotun Sulaiman: ?Infrastructure does not come cheap, and African countries are, for the most part, poor. ICT is competing for limited resources against a wide variety of requirements, from health care to education and infrastructure. Finding the wherewithal to fund new investments in IT in Africa is a stretch.?
?Many things can be done in terms of projects aimed at establishing infrastructure,? says Telkom SA Ltd. executive: global capacity, Johan Meyer, ?and many countries are keen to do so -- financing is often not available, however. For example, if you establish a multilateral partnership for the purpose of a project, the institutions being asked to finance the deal will ask the creditworthy partners to sign guarantees covering the non-creditworthy partners, and the deal falls through.?
Africa?s weak managerial capacity is another issue, says Sulaiman. ?Processes, systems and strategies are not world class,? he notes. ?For a firm like Accenture, which upholds global standards, this limits our opportunities. For example, we will not pay bribes to get contracts.?
This is echoed by Pastel Africa director, Jeff Lewis: ?We are getting past the old regimes of people looking to corruption/bribes/handouts. The challenge is to get aligned with companies that believe in good corporate governance. The nice thing is that many companies are recognizing that we play in a global market, and companies wanting to do business globally are starting to put the right principles in place.?
Sulaiman further highlights long decision-making processes as a challenge. ?Things move very slowly in these markets,? he says. ?The sense of urgency that you find in the West is lacking, no-one seems in any hurry to get anything done. Processes are very drawn-out and bureaucratic.? He mentions a proposal which his company submitted late last year that was valid for 90 days -- the company concerned twice requested that it be extended for a further 90 days.
?Africa remains a predominantly cash-based society, and companies exporting into the continent need to take cognizance of this. In addition, stringent project management methodologies must be applied in order to maintain control and overcome some of the challenges encountered. As with any exports, fluctuations in currency can impact on business, and pricing is an important factor to consider. This should be determined with the African economic environment in mind. Each country and each market has its own set of variables, and any product or solution intended for export requires customization to fit these changing circumstances,? says Jeanie Erickson, executive, NamITech Mobile Solutions.
Huge opportunity
Undoubtedly, there is huge opportunity for growth; however, this has to be driven not only by technology innovation, but a strong channel model as well. ?In saying this, when dealing with African countries one needs to be aware of the pitfalls -- stability is (and probably will remain) a hampering factor, and subsequently makes some of the markets very unpredictable,? comments Nigel Taylor, GM: marketing, Canon consumer imaging SA & sub-Saharan Africa.
Finding local skills in Africa seems to have become less of a problem over the years. Says Comztek Africa sales director, Brett Stevens: ?While resellers may not have formal certification, they have had to learn their skills hands-on, and there are some superb engineers available. Africa is not far behind and is very aware of technology worldwide. Other African countries are now on a par with this country, and are buying the same types of technology. In many cases companies do not have legacy infrastructure to deal with, so they go right into buying the latest and greatest.?
Clarke concurs: ?All of our offices north of SA are run and driven by local people. The expertise is there, we merely have to train people around our processes, procedures and service requirements. The amount of Cisco skill in Kenya, as an example, is frightening. If you embrace the culture and the know-how you can build a successful business.?
And the verdict? There is business to be had in Africa, from north to south, provided that you are prepared to commit to the markets you want to play in, establish a strong channel-strategy driven by local people, and are in for the long-haul -- there is no ?quick buck? to be made. The benefits of establishing long-term relationships with players outside of SA will heavily outweigh any quick buck that could possibly be made.
Africa is where it?s at, and the global market has realized this. Companies like APC have been operating on the continent for nearly 30 years. Others, like HP, are using SA as an innovation center for the development of products like the 441 that can be sold into other emerging markets. As a member of the African community, this country has an advantage over other ?foreigners? looking to play on the continent, provided that SA companies do not go in with a know-it-all, bigger and better and ?our way or the highway? attitude. Sensitivity, in Africa, is indeed key.