Tackling too much tech

The commercialisation of technology has been crucial to the success of many companies. Technology vendors have, over the past decade, risen and fallen depending on their approach to the commoditisation of their offerings.

Many vendors have created a climate of intuitive commercialisation within their companies, giving them the ability to bring increasingly sophisticated technology-based products to market faster and with increasing frequency.

However, the extremely fast pace at which technology is now advancing is cause for concern. The determination to reach markets faster has resulted in the practice of product development becoming akin to a runaway train for many vendors.

Product quality is suffering due to truncated research and development programmes, hurried designs, reduced testing and shortened development cycles. The recent problems with the Galaxy Note 7 phone may well reflect this.

Product recalls and fixes are now increasingly common, as vendors scramble to address performance shortfalls and related quality and reliability issues before they evolve into embarrassing, image-denting gaffes.

The regularity of new product releases has resulted in increasingly 'loud' marketing, advertising and sales campaigns. It's as if the tech industry is telling the market what it should buy, rather than asking what is required. The key question is, do consumers really need to be pressured in this way?

As an example, let me highlight the rocket-ship ride that the technology underpinning a simple network access point has taken: there has been a rapid move from the 802.11n WiFi standard to 802.11n Plus, 802.11ac, 802.11ac 2x2, 802.11ac 3x3, 802.11ac Wave 2, 802.11ac Wave 2 4x4 and 802.11ad - all within the last 18-months.

"Too much tech too quickly" has also confused the roles of the many services providers that are not keeping pace with the changes in marketplace dynamics. It has placed an increasing burden on overworked business processes that are not geared to deal with the new product onslaught.

In SA, which receives most of its tech products via sea, it was usual for the market to absorb a number of shipments of a particular offering over a given period of time - say 10 to 20 shipments during the product's life cycle. Now, after the first or second shipment, a new product is most likely to be introduced, rendering the first obsolete and creating forecasting and planning headaches for importers and distributors.

The tech industry, forced to adapt to this situation, is enjoying only limited success. Sales people find themselves having to 'upsell' for upselling sake - simply because there is a new model on the shelves that must be sold quickly before the next new product arrives on the seemingly never-ending - but increasingly speedy - conveyor belt.

One of the benefits of product commoditisation is greater competition, which should translate into cheaper prices for the end-user. However, the dictates of moving new products to market in ever-decreasing time cycles is negating this.

Product recalls and fixes are now increasingly common.

Let me explain: back in the day - say 10 years ago - the costs of the many business processes and procedures associated with designing, manufacturing, testing and certifying a product on its way to market were amortised over its production run.

Now, because production runs are significantly shorter, with upgrades and advances appearing regularly, these processes and procedures are being repeated many times over, adding to the average cost of new offerings.

Look at the situation from the South African distributors' perspective: the sheer number of devices that require equipment type approvals and homologation on a regular basis is staggering.

Take a simple WiFi dongle, for example. If its retail price is R399, a considerable number will have to be sold just to cover the cost of its local homologation, associated regulatory fees and attendant processes, which could easily add up to R5 000 or more. Showing a profit is becoming a tougher task.

Is there a way to ease the pressure? Is there something that can be done to streamline import logistics? Can we accelerate, and at the same time, simplify, the regulatory processes - which are certainly showing their age, not having changed since the days when there was an AS 400 in the computer room?

Special clearance and duty exemptions on electronic goods have been mooted. They might persuade importers to opt for air freight over sea freight forwarding, and so help dealers and resellers keep in step with overseas markets in terms of release dates and launch events.

South African distributors have access to some of the best technology, but when it comes to distributing it through the channel structure, their hands are tied by tardy responses from ICASA (Independent Communication Authority of SA), SABS (SA Bureau of Standards) and a number of other administrative bodies. They need to be brought up speed and their approval/regulatory processes automated if SA is to maintain the status of its world-class tech industry.