The opportunities for businesses, including small-to-medium sized operations, are vast in Africa and it is widely acknowledged to be an untapped market. However, there are perils to engaging Africa if a business goes in unprepared, not having done sufficient research and/ or not being aware of the dynamics involved.
Implementing technology, managing projects and liaising with individuals based in Africa are all skills that must be learned and implemented correctly if technology is to make any positive impact on Africa and its people.
TBIS, a subsidiary of Prescient Ltd, a sister company of PBT Group, has put a strategy in place to offer IBM Business Intelligence (BI) solutions in Africa.
CEO of TBIS, Nigel Freddy, speaks frankly about doing business in Africa, what works and what does not.
What does it take to be successful in Africa?
It must be noted by those looking to invest in Africa that the business landscape is very different to the rest of the world, and therefore when doing business on the Continent it is important for business decision makers to understand the complexities of engaging with African businesses. Some of these complexities, for example, include:
· Many African countries have not yet been exposed to the same technological infrastructure capabilities when it comes to sufficient Internet delivery – this means that businesses cannot merely just take their technology into Africa, as the necessary Internet infrastructure may not be available to allow for that technology to work effectively.
· Furthermore, African countries today still do not have other basic infrastructure such as telephone lines, and other resources including computers, printers and proper offices – this makes doing business in Africa a task that must be fully understood if businesses are to be successful, as how business is done in South Africa is not necessarily how it can be done in other African countries, based on the fact that some basic infrastructure and resources are lacking.
· The business culture in Africa is very different. The quick meeting, proposal, contract, sign-off process just does not work here. You have to establish trust, build relationships and create partnerships. In some cases the business benefit, the technology or the financials are far secondary to these aspects.
Success may mean different things to different companies – what is the general consensus of the word ‘success’ in this context?
In this context, success refers to the ability of a business to not only understand the complexities of the African market and the way businesses operate within the various countries, but to also be able to effectively provide/deliver a solution that meets the needs of the African business. To ensure that technology adds value to the business and that the investor is not seen as a company just looking to enter the African market based on the fact that this market is seen as the next ‘big investment’ hub.
What are companies doing right and what are they doing wrong in terms of engaging the Africa market?
Some are entering the African continent with the intention of doing business there, but are going about it the wrong way. As mentioned above, the business landscape in Africa is completely different compared to what many locally based companies know – there are complexities and challenges that need to be understood.
A combination of factors play a role when different companies work with people from diverse cultures and backgrounds and all have an impact on the overall outcome of the project to a more or lesser degree. Some of these factors and challenges include cultural issues or differences; language barriers; basic communication skills; attitude of individuals; the extent of experience; training; gender and the ability to handle pressure. Getting the right mix of characteristics is often one of the biggest challenges that businesses entering the African business landscape face. The reality of this is that without the right people, the chance of success decreases.
What are the main requirements, generally, in Africa as far as technology, service/s and support is concerned?
As a provider of software solutions and services in Business Intelligence, we gleaned from our experience that the country would need to have the infrastructure to support the requisite technology requirements of our solution. Technology vendors, both hardware and software, have minimum criteria that a country needs to fulfil in order for their products to be certified for that region. For example, a certain data warehouse appliance technology may demand certain power specifications, parts distribution and support networks that may not be available in certain countries.
Service and support usually require a core team in-country to run with the day to day production and business as usual tasks. Second line support and product/solution development requirements can be done remotely depending on the quality of the network infrastructure. It would be preferable to invest locally for the support requirements by empowering a local business partner with skills transfer and mentoring initiatives.
As companies compete to meet these requirements and leverage off user volume, adoption rates etc. in regions across Africa, is there genuine service or are consumers often left unsatisfied, forgotten or neglected?
There are most certainly examples of unsatisfied and neglected consumers in certain regions which, when we hear of these, sadden us.
Because of the area’s remoteness, complexities of travel and communication and cultural differences, consumer requirements are often misunderstood, or just plainly neglected because it is too difficult, time-consuming and costly. However, one must realise that this is an area with an enormous growth profile, and an even larger growth potential. However, like elsewhere in the world, consumer service, especially in the case of IT, is critically important.
In a culture built on relationships and trust, where word-of-mouth reputation is more important than financial statements, consumer support is even more important for longer term success. One of our core values is that we strive to maintain excellent customer relationships where their needs are forefront in our implementation of their solutions. Genuine service and customer satisfaction is a realisation with the achievement of this key measurement.
It has been said that partnerships are critical/a pre-requisite to have in place before any strategy to engage markets in Africa is even considered. Do you agree and how do partnerships actually add value?
Partnerships most certainly help a ‘new entrant’, to get a ‘foot in the door’ of an Africa-based business. It can be said that this is due to the fact that African business owners often tend to base their decisions on trust. If they trust a particular party that an investor has partnered with, that investor can stand more of a change to ‘get in’ to the business. In fact, many organisations will only deal with vendors and service providers that engage through local partners. Working through a local partner also makes it much easier to deal with regulations, taxes, as well as cultural aspects.
As mentioned earlier, our business model involves empowering local partners by transferring the necessary skills and continually supporting the partner to ensure the on-going success of our implemented solutions.
Is there a risk of poorly-formed/rushed or ill-equipped partnerships being forged and how much damage can this type of alliance do to the broader ICT market in Africa?
Most certainly – if a partnership is not thoroughly thought out and planned correctly, the results could be that the technology implemented is not effective and therefore does not represent a return on investment to the business. The reality of this is that the business owner may take a view that they have wasted their time and money on an IT investment that is not returning results, which can give IT a ‘bad’ name or reputation.
As occurs in any part of the world, but with the added necessity to be opportunistic in Africa, the possibility of being ripped off through a rushed partnership also exists. There are scammers all over the world, and if you rush into dealings with someone on a remote continent, in a culture you do not know or take the time to understand, you can easily be swindled. Certain technology vendors demand that companies providing derivative solutions are properly certified in the operating country for the requisite technology skills and support. These constraints are designed to protect their brand in that region and we find this encouraging and fully support this operating model.
Are there formal ICT supply channels in place across Africa – are there areas that do not have this type of structure in place?
It is a requirement in providing our solutions that we use regional distributors for the software and hardware components of our solution. However, there are times where a regional distributor may not be able to provide this supply owing to the fact that they may be totally inexperienced with the technology and the solution.
Furthermore, there are also some of the smaller countries, or even clients in remote areas (such as oil exploration) where there aren’t local supply channels available.
Skills is a constant challenge as far as doing business in Africa is concerned, particularly when it comes to technology and the rollout of projects etc. What is the solution to this dilemma and what are the roles of stakeholders like government and industry regulatory bodies?
Skills development should remain a key area for all local technology businesses to invest time and effort in, especially as technology develops today at such a fast rate and therefore, the skills required continue to change. As such, we believe that it is important for local business to not only train and develop the ‘doing business in Africa’ skills as outlined above with their employees, but to also train and ensure their technology skills are being developed with the African landscape and its various challenges in mind – this will ensure that individuals are developing the skills required for the successful implementation of technology across Africa.
Having worked across 14 African countries, we have not encountered any involvement form Government or regulatory bodies, apart from standard aspects such as company registrations, visa and travel, taxes, and requirements to deal through local partners. Of course employment and training of local resources are encouraged, but we have not seen it governed anywhere.
South Africa is said to have a flourishing ICT market, but so too does East Africa and countries like Kenya and Nigeria (especially from a mobile point of view). What is the prediction in terms of ICT sector growth for these markets in the next five-to-ten years?
Considering the enormous uptake of mobile technology, together with the broadband investment that has already occurred across the African continent, ICT development is certainly looking positive here, and this, along with other various reasons is why Africa is being seen more as an investment hub. In fact, following the launch of the ‘National Broadband Strategy (NBS) for Kenya, that is aimed to streamline the ICT sector and transform Kenya into a knowledge-based society which will be driven by a reliable high-capacity nationwide broadband network’, I believe that in the next five to ten years, we will see massive growth in the ICT sector across the country as well as continent.
There is often mention made of Africa’s opportunity to leapfrog technology trends and actually take a leadership position (LTE rollout is one example). What is your view on this?
To a degree, I agree with this sentiment, as African countries have the opportunity to look at South Africa as an example, see and understand the challenges and obstacles South Africa encountered in terms of ICT development, and take away the key learning’s from these. These learning’s can be implemented by the various African countries to speed up ICT development in their particular region and of course leapfrog ahead.
Any other key messages that the team believes the market ought to consider and bear in mind in terms of doing business within Africa?
One needs to speak to the right people and establish the necessary relationships when pursuing a business opportunity, so the networking and trust-building aspects are very important. Treat everyone you deal with, with respect. Utilise and employ people that can speak the local language and understands the culture of the region. Take time to invest culturally. Also, you need to have patience with the communication channels and have a sense of humour.
Chris Tredger – Online Editor