Describing the African continent as a `hub of innovation' with `considerable growth potential', ten business leaders from ten top IT businesses all believe that the continent is ripe with opportunities. They also agree that finding success in the region comes down to one key thing - planning.
In fact, Mathew Welthagen, Group CEO for Gondwana International Networks, advises that businesses eyeing out African expansion should always have a Plan B, and even a Plan C, so that they can easily change their strategy should things not play out as they'd hoped. Entering new markets requires patience, stamina and a realistic, comprehensive, executable plan, he says.
We asked these executives what their essential tips were for capitalising on African opportunities. Here's a list of the top ten:
1. Research, research and research some more
Having already mentioned the importance of planning, part of this process entails doing as much research as possible. According to Jan Roux, CIO at Integr8, the more research you do, the lower your risks. Understanding your target market means finding out if the product or service you offer actually caters to the specific business requirements and challenges of people living in that region. "It is critical for business to do their homework and to fully understand the local market conditions, culture and challenges before they decide to expand."
2. It's a continent, not a country
In doing your research, you'll soon learn that adopting a one-size-fits-all approach is a mistake, says Justin Maier, VP of HMD Global, Sub-Saharan Africa. Africa cannot ever be seen as one homogenous market. Nor can a business think that it can simply transplant its South African roadmap into other African markets. Did you know that Nigeria can be broken into four distinct `regions', each with its own unique requirements and consumer behaviour? If you expect consumers to trust you and spend their very hard-earned money, you need to make sure that you're offering them something tailored for their specific needs and preferences, Maier points out.
3. Understand the legal/regulatory environment
Make sure your home fire is burning brightly and you have a solid base in South Africa before you embark on an African expansion.
Mark Walker, IDC Middle East, Africa and Turkey
Sure, Africa is a melting pot of potential, but businesses that fail to meet the necessary legal and regulatory requirements will stumble before they even leave the starting blocks. Africa's regulatory and legal environment is in a constant state of flux. Just because you can do something in South Africa doesn't mean you can do it elsewhere, cautions Gondwana's Welthagen. Consider the timing and practicality of securing visas and work permits for specialist or ex-pat staff, licence submissions, logistics, taxes and duties - all of these `hurdles' are unique to each region and will impact your costs and time to market.
4. View challenges as opportunities
If you've done your research, you'll be well aware of the many challenges that go hand-in-hand with doing business on the African continent. These challenges should not be seen as obstacles but rather as opportunities, says Metacom founder and MD, Rean van Niekerk. A general lack of access to the latest technologies means that mobile technology plays a key role in solving the `challenges'. He recalls sitting at a coffee shop in Kenya where he saw many people using Bluetooth; he describes this experience as a perfect example of how different regions have usage preferences and, when leveraged successfully, these behaviours can be used as the building blocks to develop relevant, innovative ideas.
5. Partnering up
Previously, African cross-border connectivity was either very costly or near impossible to do unless done illegally or via 'who you know' strategies. This meant that African expansion was very risky, capex-intensive and technically not feasible, notes Michele McCann, head of Interconnection and Peering at Teraco. "In today's world, we don't need to build and own everything. Think about what can be outsourced to reduce costs and leverage existing services that are available." Having strong and reliable local partners is perhaps even more valuable than having the right people sitting in head office, she says, and this is critical to maintaining key relationships with customers and stakeholders. Think about something like distribution, for example. If you haven't collaborated with the right partners in the region to develop an effective product distribution strategy, you're going to struggle to get your product to market and then there's no point in diversifying at all.
6. Keep options open
Anton van Heerden, MD and executive VP for Africa & Middle East at Sage, recommends that businesses provide choice and flexibility. For example, being able to choose between cloud and on-premises deployments allows your customers to select a solution that makes sense for their specific region or country. We all know that cloud-based systems allow companies to get new offices up and running in a short amount of time, but this approach simply wouldn't be viable if the in-country telecoms infrastructure is not suitable, he adds. And should you be implementing something that is relatively new to the region, it's important to focus your attention on training and change management as this will show your new customers how the processes and systems you sell can help them achieve their goals.
7. Spending time on the ground
"Believing you can sit in the luxury of Sandton and conquer Africa with a strategy that worked for South Africa is a recipe for disaster," says Stephen Watson, MD of Discover Digital. As a business leader, it's important to go and spend time in each market, he continues. "Personally, I always go to each market to gain first-hand experience of the culture, business climate, infrastructure, accommodation, transport and landscape. I have never sent a member of staff to a market that I have not been to personally; it helps with comprehending and supporting future business recommendations and understanding the climate in which you expect your team to achieve results."
8. Make a difference
Expanding into Africa should not only be about tapping into new opportunities to make money, says head of Business Development for Africa at Wipro Limited, Marleze van Loggerenberg. Social responsibility must be a focus. Part of expanding into another country entails making proper investments into its growth and upliftment, she points out. When opting to use a local workforce, organisations must consider the impact of training and knowledge sharing. "Localisation is key, and organisations need to consider how they can positively impact the country into which they expand, whether by offering previously unknown services, upskilling the local workforce, or fulfilling a local need or demand," she notes.
9. The art of actually making money
Current foreign exchange limitations in Angola, Nigeria and Zimbabwe severely hamper money flows out of the country. What this means is that if you mistime your move to a new country, dealing with lengthy processes can add weeks, sometimes months, onto your expansion plan. You may have done the necessary research around the nation's foreign exchange laws, but it can still take a considerable amount of time to get your money paid and back to South Africa, says Chad Baker, GM at XON and NEC VP, noting that this makes cash flow a potential hurdle. Similarly, if you're being paid in the local currency, the costs of converting earnings back to rands can also erode profit and must be taken into account.
10. You can't pour from an empty cup
But before you even entertain the idea of taking your business beyond South Africa's borders, take some time to assess if your internal structures are robust and in place, and if you've tapped out all opportunities in the South African market, stresses Mark Walker, associate VP for Sub-Saharan Africa at IDC Middle East, Africa and Turkey. "Make sure your home fire is burning brightly and you have a solid base in South Africa before you embark on an African expansion strategy." Think of this step as a viability study to ascertain if your dreams of an African presence can actually become a reality.
Africa is set to become one of the biggest growth markets in the world. "The benefits for companies that manage to expand successfully into Africa are huge," says Roux. "It's crucial to never underestimate the complexity and risks that come with expansion and to do a proper investigation of what you're getting your business into before making the move."
This article was first published in the September 2017 edition of ITWeb Brainstorm magazine. To read more, go to the Brainstorm website.
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