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African businesses can go global using procurement ecosystem

June 5, 2013 • Opinion

Businesses across Africa, much like their European and American counterparts, have to be more resourceful and agile in order to strengthen operations and seize market share – particularly when it comes to procurement. Executive leadership at SAP Global suggest the evolution of networks and refinement of cloud adoption strategies will be fundamental to all businesses going forward.

 

Sven Denecken, Vice President, Strategy Cloud/ On-Demand Solutions at SAP AG. (Image source; SAP AG)

Speaking from the Ariba LIVE 2013 Conference in Berlin, Sven Denecken, Vice President, Strategy Cloud/ On-Demand Solutions at SAP AG, said reflecting on developments within emerging markets, the intention by companies is to run commerce on a global basis. This involves tapping into the evolution of networks and the cloud.

“We are going to see an evolution of networks, which, today, are mostly known as procurement or sourcing networks, to other networks like financial. There will be other networks coming up. From our perspective, the network is fundamental to the business we support. More than 65% of the worldwide transactions – but those transactions need to be connected to suppliers, with customers and other networks,” says Denecken.

He refers to South Africa’s mining sector as an example of an area in which companies with installations across the world are active globally and understand the need to utilise this infrastructure to gain efficiency and growth.

The point that Denecken raises is that in terms of service provision and infrastructure, it does not really matter all that much what drives the business from at the back-end.

“If you connect once to a network and the network has the scale required, you get the benefit very quickly,” he adds. “If you establish a new business in a fast-growing environment, like Africa, you don’t think about those processes first. You consider product, market and then you suddenly realise there is a lot of back-office stuff, connectivity and one-off negotiation. A network helps me to surpass the hidden risk… there will be risk some where, and if I can tap into the network, that process gets easier.”

One of the key underlying points raised by experts within the SAP/Ariba combined offering is that in fast growing countries, local businesses that tap into a global supply chain and procurement chain and truly ‘go international’.

This is a step that would otherwise be out of reach for most businesses that do not have this level of connectivity and knowledge available they say.

Growing in scale

The other key factor for decision makers in Africa is the opportunity to leverage off scale says Denecken.

“Suddenly I have a lot more activity, more people to talk to and more people to compete with, irrespective of what industry I am operating in. There are many industries coming out of Africa, going down the same path,” he continues.

SAP and Ariba have acknowledged the growth rates in Africa and the maturity of companies, and Denecken is optimistic about prospects on the continent going forward.

“We also see a lot of international companies building up trade relations with Africa, particularly in terms of people… engineering, manpower. It is velocity that is driving businesses and (they) don’t want to be constrained by technology and availability,” he continues.

Cloud is the major game changer and enabler according to SAP. The technical ability to deliver a combination of on-premise, cloud, mobile and other converged services will transform the business landscape.

“Just look at the banking for the un-banked market. Mobile connectivity is the stepping stone to tapping into businesses that will grow overtime. These businesses need to be connected to a network.. and we want to leverage off that. The barriers will be removed,” Denecken.

Chris Tredger, Online Editor

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