Although market perception of global players often suggests that technology development only takes place in more developed regions, Malan Smith, director of technology management at Siemens South Africa, says it is Siemens' worldwide investment in local technology development that has enabled it to retain its global leadership position.
"The international technology world is largely dominated by Northern American and European companies. Although many of these companies outsource portions of their development to developing countries such as China and India for reduced costs, the more strategic development is kept in-house and at one of the business' development centres," says Smith, adding that Siemens' view of innovation and development is significantly different.
"While we have a centralised development centre based in Germany, we understand that the enormity of our geographical footprint means that it would be imprudent to drive strategy from a single region," he says. "As a result, we build development capabilities in the regions in which we have a presence so our customers are able to access world-class solutions that are tailored or newly developed to the specific requirements of their business or region."
Siemens Southern Africa boasts of more than 100 local developers - all of whom are encouraged to maintain communication with Siemens developers throughout the world. The company's Sharenet provides the platform for ongoing sharing and collaboration on projects and also facilitates cross-learning across the company's development teams.
To date, the team has received many accolades from within the organisation and many local developments have grown to become global Siemens offerings. Between 1978 and 1982, the local subsidiary installed the first Siemens digital exchange together with Telkom. Later, the company developed the prepaid concept for cellular provider, Vodacom, followed by the 'Friends and Family' concept for another cellular provider, Cell C.
"Siemens Southern Africa is one of the few local companies that boast world-class research and development laboratories," says Smith. "Although the option to market internationally through our global operations is attractive, our first priority is to meet the needs of our local clients. Once this has been successfully achieved, the development is then distributed throughout our operation and if anyone is interested, it is icing on the cake."
The team's development of prepaid cellular is probably one of the biggest local successes. Initially the company's European offices felt there would be very little interest from a marketplace that had so heavily invested in contractual offerings. Nevertheless, the development was embraced by mobile providers looking to increase reach and the public at large looking for ways in which to control teenage usage.
Another long-term success, this time with fixed-line communications provider Telkom, has seen the development of the Distributed Digital Line Unit or DDLU. The solution was developed to help Telkom address the high cost of running copper cables into rural areas - regions the company was obliged to address in terms of its universal service obligations.
"Penetrating rural areas had been a significant concern for the company. Running copper lines into a population that is not particularly dense can incur significant costs, eroding profits," says Smith. "The DDLU system uses considerably cheaper optical fibre to run through to the regions and then uses copper for last mile access. Today, all South Africans within several hundred kilometres of a city can receive the same services as the built up areas. This solution has become particularly popular in China and South and Central America that had the same needs and similar population disparities to address."
The company continues to invest in local skills development and, together with long time customer Telkom, has sponsored centres of excellence at the University of Witwatersrand and the University of Cape Town. As a result of this, these two educational institutions are able to offer students masters and doctoral studies in telecommunications.
"Telecommunications is one of the major drivers of a country's economic growth and we are committed to building the requisite skills locally to provide both the drive and innovation that is required in a developing country," says Smith. "While we may never be able to compete with the likes of China and India on software coding, SA certainly has the ability to compete in the more specialised niche areas. It is up to all of us to foster this ability and deliver the results."
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