In South Africa, there is a tendency to believe that all IT activity can only be confined to three hubs, with over 70 percent of action taking place in the Gauteng area.
The problem with this viewpoint is that it has become self-fulfilling. Because there is little or no infrastructure in the regions, big business doesn`t move in to sell services. Without the presence of regional offices to support these sales, no infrastructure gets developed, and the cycle perpetuates.
Brainstorm hosted a roundtable to discuss what the issues are around doing business in the whole of South Africa, and how these problems can be addressed.
“To a large extent the IT industry has let down the country,” says Bruce Krebs, Business Connexion`s senior marketing manager. “A lot of the suppliers have withdrawn their local offices out of the regions. They put the responsibility on their solution providers to fill the gap and then come back as and when they start being lucrative. I personally think that`s a very irresponsible attitude.”
Stafford Masie, as MD of Novell, points out that the pressures of heading up a multinational, and reporting back into a global head office that has little or no understanding of local context, is one of the reasons that his company focuses predominantly on the hubs.
“It seems like people up in Gauteng are willing to take the risk, to put the big project in to see what it can do, whereas it`s more of a conservative notion in the Northern Cape and the Eastern Cape,” he explains. “Our sales models don`t really fit that. I have a quarterly model. Every three months, I have a number to achieve. So where am I going to go to close that number? I`m going to go to Gauteng, Western Cape and KwaZulu-Natal. In the other provinces, OK, I`m going to let it happen, but those are going to be my bread and butter.”
The ongoing process of urbanisation compounds the problem, as rural people only see opportunities in the big cities. Added to the pot is South Africa`s much lauded diversity, which, while providing magnificent cultural variety, means that an infrastructure solution carefully worked out for one region cannot be easily replicated in another.
Big companies have a number of reasons for shying away from doing business in the regions.
“Our country so diverse – multiple cultures, multiple mindsets,” says Stafford Masie, MD of Novell SA. “The challenges and cultures of the North West province are completely different from the Cape or Durban. As for buying cycles in the Western Cape and KZN, the sales cycle for a deal in Gauteng would take three months, the same deal [elsewhere] would take nine months.”
However, while this might be Masie`s viewpoint, Krebs, at least, feels that this is not the case. “I think it`s an absolute myth that the sales process takes longer in the regions,” he says. “Business moves faster in Gauteng because it`s given more attention. We`re our own worst enemies because we have these pre-conceived ideas about business being different. I don`t believe it`s different. I believe that if you`ve got sales guys who are going to spend time in front of customers talking about solutions, they will succeed anywhere.”
Stephen Bosman, GijimaAst strategic marketing managing executive, agrees that there are differences, but believes that a solid sales process can overcome them. “The decision making process varies from company to company and area to area,” he says. “For instance in the North West, the local guys are typically more advanced in their ways of thinking about business, because they`ve had AngloPlatinum for many years. In terms of the sales process, there is a process that any good sales person should follow, and this should be effective in every region. It is a way in which you actually take cognisance of local conditions. There`s no substitute for good practices and good processes.”
Another problem, which Krebs raises, is that South African IT companies don`t try to really address their clients` problems with technology. “One of the biggest problems that we have in this country is that we sell technology and not solutions,” he says. “As a result, we put a technological solution together for the North West and we say ‘well, why can`t I replicate that in KZN?` And the simple reason is that the business requirements are different.”
He illustrates his point by explaining that in KZN the biggest problem is one of ghost employees, while in the North West they`re dealing with fraud in the sector.
“Whilst we continue to focus on the technological component of the IT industry, we`ll never replicate anything,” says Krebs. “Whilst we continue to have technology battles, we`ll never get to the heart of what it is that the customer`s looking for.”
Broadening the scope
“The success for the industry is dependent on the success of the industry across all of the sectors and all the regions,” says Krebs. “The more vibrant the regions become, the less the demand is. Because it`s very expensive to support a client out of Joburg, the first prize is to make the regions as self-sufficient as possible.”
All three company representatives agree that a wider presence is needed in all the regions of South Africa, and that this is partially the responsibility of the private sector, but that the buck does not stop there.
“I think that if there was an incentive model for doing regional business, from a public sector perspective, then that could be something that spurs on this challenge we have in the industry,” says Masie. “Because overall the current situation has an effect on circumstances; customers are suffering. You know if I have a national department doing business within Gauteng, rollout is easy there, but as soon as it hits the Northern or Eastern Cape, there are challenges. There should be a two-way incentive scheme that says if I put resources in the Eastern Cape, there will be a benefit to doing that.”
Krebs agrees that government should be engaging in mutual assistance, because while companies can be expected to contribute to the development of the countries in which they operate, their ultimate goal is profit.
“It`s a function of economics,” he says. “You turn around and say to Stafford, ‘you`ve got to invest`, and how long will he be able to keep his European parent company off his back? The ultimate aim of any organisation is to show a profit. You show a profit, you give back into the region where you made your money.”
And rather than promoting a nebulous ‘you scratch my back; I`ll scratch yours` scenario between business and government, Masie has very clear ideas about exactly how regional activity could be promoted.
“Broadband Internet access could have a massive social economic effect if it saturated every element of our society,” he says. “I think you`ll see less urbanisation because people will be empowered wherever they are. In the United States, you see people doing software development sitting in deserts in Arizona or the ski slopes of Utah.”
Krebs agrees that this would change the way that not only business, but also public services could be delivered in this country.
“One of the best academic hospitals in the country is the Albert Luthuli, because it`s completely paperless,” he points out. “You have your X-ray sent across the Internet with all your documentation to any doctor. Now, imagine if you had good satellite and you had a doctor sitting in Amatikulu facing an old lady with a problem. He could diagnose her, get onto a PC and get access to the best medical information available, the same as we have when we go to the Sandton Clinic.”
And that, he says, is what`s not happening in this country. “We`re not saying how we can provide a broad spectrum of social upliftment services using technology.”
While Bosman agrees that this would benefit the country, he cautions that it`s not an easy task. “If you take the need to be in a certain geography to work away, people can work anywhere, office`s premises or at home in the Limpopo,” he says. “If the other provinces really want to get ahead, that`s what they need to do. But if you and I decide to put broadband access into a particular area, it`s not as simple as that. There are all sorts of complications and regulations and companies that you need to speak to.”
Man in the middle
Stafford believes he has the solution to addressing the problem. “Liquidate Telkom, shelve Icasa, allow us to go crazy,” he says. “I think the world`s changing. Look at what`s happening internationally with technology. We can see what has happened in the open source world – it`s the fruit of connectivity. Wikipedia is far better than any encyclopaedia, and bloggers are attacking the traditional journalist. I think these evolutions speak to what technology is capable of doing for humankind. It says that someone who is connected, who truly has broadband access pervasively, can become something bigger than an institute.”
While we do seem to be making painstaking progress towards telecommunications liberalisation, chances of free broadband for all are highly unlikely in the foreseeable future. Bosman outlines a number of ways in which he believes big business can make a contribution here and now.
“SMME development is very important,” he says. “I think we`re not seeing the same kind of fronting that was in place in the past. There is a definite development of skills, definite growth of organisations and while some of them fall away over time, some of them make it and become sustainable.”
Because of this, he says, there`s a key role that big business can play. “We can work with partners, help skills development and help keep money in that region. If you work with government, there`s the opportunity to achieve a whole lot of objectives over time.”
Krebs agrees with Bosman`s assessment of the way forward. “IT can play a major role in the upliftment of the people in the country, and if we put something like broad-based internet from tomorrow, you have to have strong regions because while 70 percent of the IT spend sits in the Gauteng province, 70 percent of the population sits outside of Gauteng. We have a responsibility to build strong regions to deliver this vision we have of an interconnected society.”