Business Chief Africa — January 2019

AFRICA EDITION JANUARY 2019 africa.businesschief.com

MASSMART

Digital disruption in procurement

Digital transformation in finance

TOP 10

Most valuable brands in South Africa

Dayalan Govender discusses educating customers and revolutionising the payments space

City Focus

OMNISTREAM

A CUSTOMER JOURNEY DRIVEN BY DATA

Ayanda Saki

CAPE TOWN

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WELCOME

W

elcome to the first Africa edition of Business Chief of 2019!

For this month’s cover feature we spoke to Nedbank, a South African financial services firm. With a presence in six African markets, the company is targeting further expansion through the adoption of new technologies.

With digitisation taking over the banking industry, Nedbank hopes to overhaul its processes and update its operations to ensure that it takes advantage of new developments.

Business Chief also discussed digital transformation journeys with Ayanda Saki, the Chief Information Officer at a leading African automotive parts company. The magazine also features Nicky Hanson, a Senior Procurement Manager in South Africa, who talks about radical transformations within the industry.

how it has incorporated its services into everyday life on the continent.

The business is responsible for sending money from more than 50 nations to over 145 locations across the world. Africa’s mobile users are set to hit 500mn by 2020, so the company is preparing to disrupt a vastly expanding market.

This month’s city focus looks at the South African city of Cape Town.

With around 50,000 employees working in entrepreneurial technology companies, Cape Town works as a continent-wide digitisation hub.

The issue will also explore the top 10 brands in South Africa, which features television service operators, banks, and retail companies.

Enjoy the issue!

Sophie Chapman sophie.chapman@bizclikmedia.com

Elsewhere, we speak to online money transfer firm, WorldRemit, to learn a fri c a .busi ne ssc hief. com

03

CONTENTS

10 Nedbank

Digital transformation to educate customers

44 32 WorldRemit: EMBRACING TECHNOLOGY

DISRUPTION IN AFRICA’S CASH REMITTANCE INDUSTRY

OMNISTREAM A customer journey driven by data

54 City Focus

78 Top 10 Most valuable brands in South Africa

CONTENTS

78 Resolving digital transformation challenges with CIO Ayanda Saki

92 MASSMART

Leveraging data analytics in procurement transformation

108 TRANSFORMING PROCUREMENT IN A DIGITAL WORLD

Digital transformat to educate customers

WRIT TEN BY

CATHERINE S TURM AN PRODUCED BY

JUS TIN BR AND

10

JANUARY 2019

TECHNOLOGY

tion 11

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NEDBANK

Nedbank has sought to educate customers in the application of new digital solutions, revolutionising the payment and transactional industry across South Africa

P

resent in six countries in the Southern African Development Community (SADC)

and East Africa, Nedbank’s vast portfolio has seen the business acquire subsidiaries and banks in Namibia, Swaziland, Malawi, Mozambique, Leso12

tho and Zimbabwe, as well as representative offices in Angola and Kenya.

Throughout its ongoing expansion, technology has continued to challenge traditional banking services, leading Nedbank to break down barriers, overhaul its processes and take a closer look at the way customers engage with its services.

A chartered accountant by back-

in an organisation that houses a strong

ground, having audited a large number

passion for clients and embraces new

of automotive groups –such as BMW

ways of thinking. Appointed as Manag-

and Daimler – Dayalan Govender,

ing Executive in 2017, he has taken this

Managing Executive of Nedbank Card,

objective further by seeking to reform

Payments and Transactional, entered

the card and payments space and the

the fast-evolving world of financial ser-

transactional industry in South Africa,

vices with the aim to make a difference

leveraging technologies and capabili-

JANUARY 2019

TECHNOLOGY

and transactional solutions to clients that fast, safe, reliable, convenient and cost effective all focused on enabling clients to achieve their goals and outcomes?’ That’s the first departure point that’s really important to us,” he explains.

“We have two key challenges. One is around transforming the culture from ties in a fundamentally different way.

“The first thing in our approach is,

an incremental mindset to an exponential disruptive mindset. The second is

‘Delivering delightful client experiences

around digital adoption and education:

and how do we transform not just our

once we get clients to start adopting

Nedbank Card, Payments and Trans-

these solutions, how do we ensure

actional business but also the indus-

sustainability in digital adoption? What

try? How do we reshape the industry

is accelerating digital adoption, not just

so that we are able to provide payment

in South Africa but globally, is that all a fri c a .busi ne ssc hief. com

13

TECHNOLOGY

“ Behavioural biometrics is also something that we are exploring and believe it’s going to enhance customer experience” — Dayalan Govender, Managing Executive of Nedbank Card, Payments and Transactional

tication methods to bolster security across various digital applications to build trust and transparency. Investing in new fraud prevention mechanisms, Nedbank has gained increased awareof us live in an increasingly digitised

ness into fraudulent activity – some-

world and we are being influenced by

thing which has become a significant

digital solutions in our everyday lives.

threat across South Africa and globally.

The proliferation of applications that

“We are investing in tokenisation,

exist satisfy many of our needs that

enabling secure in store and online

we didn’t think possible. People are

transactions. Behavioural biometrics

being influenced by digital in many

is also something that we are exploring

aspects of their lives and we are at

and believe it’s going to give clients

a point where clients expect this from

a superior customer experience,”

financial services.”

says Govender.

Trust is going to be a key requirement

Accelerating digital adoption will go

underpinning digital adoption. Within

hand in hand with building trust, which

its Card, Payments and Transactional

will no doubt feed into Nedbank’s abil-

operations, Nedbank has therefore

ity to scale. However, despite such ef-

sought to invest in the latest authen-

forts, customers will only utilise smart a fri c a .busi ne ssc h ief. com

15

NEDBANK

payment solutions if they are somewhat intuitive, in order to remove the fear of the unknown and fully engage with new digital services. “Far too often, there’s a perception that digital is complex. Not everyone understands these digital solutions and they get paralysed when they experience a digital solution for the first time, so we have invested significantly in how we design these solutions with the client at the very heart of this,” he says, Since the bank launched the Nedbank 16

Money app in 2018, the new digital platform has been met with acclaim by clients. Gaining significant traction with more than a million downloads, the app provides customers with financial access and services at the click of a button, fully empowering users and putting them in control of their finances. Harnessing a sophisticated design with ‘next level authentication’, the app enables customers to do a myriad of activities including viewing balances and statements, buy prepaid data and other value-added services, send money to a recipient or make payments to friends, family or providers.

“Nedbank also launched scan to pay JANUARY 2019

TECHNOLOGY

17

a fri c a .busi ne ssc hief. com

Tipping the scale on mobile payments

By Mark Elliott, Division President, Mastercard Southern Africa The app economy has changed the way we live. We depend on our smartphone apps for everything from entertainment to photography, to messaging, personal productivity and ordering transport or accommodation. In South Africa, we’re increasingly using our smartphones for in-app, in-store and online payments.

“The promise of mobile payment services lies in creating safer, richer experiences for consumers and merchants.”

We’re also seeing merchants use apps that turn their smartphones into point of sale devices or use QR codes to accept mobile payments from their customers. The mobile device brings the convenience, safety and customer choice associated with cashless transactions to spaza shops, flea market stalls, trades people like plumbers and electricians, and other sectors where traditional card terminals are not a practical or affordable solution.

Mobile innovations need to improve the consumer experience As we think about the rapid adoption of mobile payments, the promise of mobile payment services lies in creating safer, richer experiences for consumers and merchants. The key is not to simply recreate what you could do before, but to make paying for things simpler, safer and faster. That’s why connecting with consumers wherever they are and whenever they want is critical.

Imagine, for example, a world where people don’t need to queue for hours to send money to their families in the rural areas or where no one needs to withdraw cash from an ATM and then stand in a long queue at a retailer on a Saturday to pay a rates bill. They don’t even need to log in to online banking and input a lot of payment information. Instead, they’ll be able to scan a QR code on the statement and pay from an app. This is a world where merchants don’t need to keep large amounts of cash on their premises. It’s one where consumers demand convenience and control, and

FIND OUT MORE: VISIT WWW.MASTERCARD.CO.ZA

expect payment experiences to make their lives better.

We are not talking about a distant future, either. In South Africa, more than 900,000 ratepayers in the City of Ekurhuleni can pay their municipal bills online with their smartphones, using Masterpass, our global digital payment service. Masterpass is also accepted online by a growing list of merchants of all sizes as well as in-app for convenient air and data mobile top-up.

Partnerships key to drive mass digital payment adoption The consumer experience is simple, but there is a lot of complexity in the background. Without collaboration across industries to ensure that digital payments systems are secure and interoperable, it will be impossible to deliver the experiences consumers demand or to scale mobile payments.

That’s why we are collaborating with key players to develop and deliver new consumer propositions that span multiple industries across multiple channels – in-store, in-app and online.

One example is the partnership between Mastercard and Entersekt to enable Nedbank’s customers to make QR payments to Masterpass, Pay@, SnapScan, and Zapper merchants and billers through the Nedbank Money app, whether they are paying online or at a physical point of presence.

This market-first development means that Nedbank Money users need just one smartphone app for all major domestic scan-to-pay services, rather than needing to store card data in multiple apps, and they will be able to use biometrics as an authentication method.

TECHNOLOGY

19

within the Nedbank Money App which

“Being able to give clients control over

is the first banking app in the South Af-

their debit orders, where they could

rica that allows clients to scan a Mas-

go through their accounts, recognise

terpass, Snapscan or Zapper QR code

a debit order to be fraudulent or inac-

for making retail and utility payments.

curate and be able to reverse that

This is convenience at your fingertips

– this has been an extremely powerful

that no longer requires clients to carry

service. Also, simple things like freez-

cards or cash.

ing and unfreezing cards are being

“A number of other services in the app are extremely popular, which debit order reversals are a prime example.

used by customers all over the world, especially when travelling.”

However, with such a diverse

In South Africa, we have an issue from

demographic, it has been imperative

a customer perspective around debit

for Nedbank to ensure financial

order abuse,” explains Govender.

inclusion throughout the development a fri c a .busi ne ssc h ief. com

NEDBANK

20

“ Nedbank also launched Scan To Pay within the Nedbank Money App which is the first banking app in the South Africa that allows clients to scan a Masterpass, Snapscan or Zapper QR code for making retail and utility payments. This is convenience at your fingertips that no longer requires clients to carry cards or cash” — Dayalan Govender, Managing Executive of Nedbank Card, Payments and Transactional

JANUARY 2019

TECHNOLOGY

of its banking applications. Based on USSD (unstructured supplementary service data) technology, Nedbank’s transactional product MobiMoney has also seen customers gain access to financial services via smartphone and feature phone, where they can deposit money into the account for free as well as send money to recipients for free.

Other value-added services include purchasing prepaid electricity and more. “There have been examples of people wanting to buy prepaid electricity, they had to take transportation to get to a mall or vendor and it would cost them R60-80 to buy R100 worth of prepaid electricity. Now, it is at their fingertips and will cost next to nothing,” Govender adds.

“We are solving problems that really matter to clients and address some of these key pain points. Through this particular platform we will build a lot more services that resonate with clients. It is also a free banking account that does not attract a monthly service fee.”

Remaining aggressive in developing new digital tools and solutions for those in all walks of life, Nedbank is a fri c a .busi ne ssc h ief. com

21

Banking and Payment services in Africa are experiencing a digital transformation, putting the customer experience at the core of innovations. New technologies such as ID verification and behavioral risk management will enrich banks customer engagement strategy.

Behavioral Risk Management: Gemalto Assurance Hub employs AI to assess user behavior patterns and determine the potential for fraud. Anything out of the ordinary can be identified and additional authentication will be requested, to ensure maximum security.

ID verification: Gemalto’s ID verification solution enables financial institutions to deploy a fast and compliant identity verification. Customers can self-enroll to online banking services by simply submitting a scan of their ID along with a selfie to facilitate secure, real-time enrolment.

TO LEARN MORE VISIT GEMALTO.COM

IN AN INCREASINGLY CONNECTED SOCIETY GEMALTO IS THE LEADER IN MAKING DIGITAL INTERACTIONS SECURE AND EASY. LEARN MORE AT GEMALTO.COM

Š Gemalto 2018. All rights reserved. Gemalto, the Gemalto logo, are trademarks and service marks of Gemalto and are registered in certain countries. November 2018 - CC

Banking and Payment (r)evolution

TECHNOLOGY

CLICK TO WATCH : ‘OPPORTUNITIES BEYOND THE OBVIOUS’ 23 also set to launch a solution that is

“From travel to household require-

tailored to the student customer that

ments, the app will find you a service

will be truly disruptive and be the first of

provider that meets your needs and is

its kind in South Africa, as well as offer

testament to the focus on client experi-

entrepreneurs with the tools and skills

ence and enabling client outcomes,”

that they need to succeed.

notes Govender.

Fully supporting customers beyond

However, with the rise of hyperper-

traditional banking services, Nedbank’s

sonalised services, data will become

partnership with Hey Jude has even

a key differentiator in delivering relevant

seen the bank integrate a new lifestyle

services to clients including merchants.

solution into the Nedbank Money app

Nedbank’s end-to-end business man-

for ease and simplicity. The solution

agement solution, POSplus, provides

works to enable customers to book

advanced data analytics and enhances

travel services, obtain support for find-

a business’ presence not only in ecom-

ing various services, and much more.

merce, but to gain a significant growth a fri c a .busi ne ssc h ief. com

NEDBANK

in the physical environment. “This innovation and solution allows business and business owners; especially small business services and entrepreneurs to focus more on growing and running their business, as opposed to managing multiple vendors and other distractions within their environment.”

Successfully reaching R125bn (US$8.8bn) market capitalisation throughout its operations is no easy feat, but building strong partnerships has remained key to Nedbank’s 24

upward trajectory in supporting 8mn clients across Africa and beyond. Recently, the bank’s alliance with pan-African banking conglomerate Ecobank Transnational Inc has seen Nedbank cater to the growing for cross border remittance solutions in Africa.

Additionally, by effectively embracing collaboration to bring solutions to life, Nedbank’s partnership with FEXCO has seen the business harness its global, dynamic currency conversion solution for customers visiting South Africa, and pay for services in their home currency. “We’ve leveraged FEXCO’s expertise and capability, which gives our merchants the ability JANUARY 2019

TECHNOLOGY

25

a fri c a .busi ne ssc hief. com

Building Borderless Business Fexco are proud to partner with Nedbank to provide Dynamic Currency Conversion (DCC) and Multi-Currency Pricing (MCP).

Read more online

For more information, contact: Gavin O’ Sullivan | Fexco Country Manager - South Africa | Tel: +27 66 478 9450 | Email: gavosullivan@fexco.com

TECHNOLOGY

CLICK TO WATCH : ‘“SEE MONEY DIFFERENTLY” WITH NEDBANK | 90” TVC’

to offer tourists coming to South Africa

which will provide jurisdiction over all

a value-add by paying in their home

financial institutions. This, he explains,

currency, where they don’t have to ex-

will enable the ongoing transformation

perience the volatility in the currency or

of financial services and the delivery of

the exchange rate,” explains Govender.

further advantages in terms of inter-

Long term, looking at the future of

acting, servicing as well as delivering

Nedbank and its position in South Africa, Govender believes a flood of new

innovative value propositions.

“Enabling regulations are going to be

opportunities are set to be unlocked

key in achieving the reserve bank’s vi-

as the country undergoes significant

sion for 2025 which is tackling some of

regulatory change. The Financial Sec-

the social issues that we have in South

tor Conduct Authority and Prudential

Africa,” he says.

Authority are set to be located in the

“The move could also unlock trade,

South African Reserve Bank (SARB),

growth and create employment. The ina fri c a .busi ne ssc h ief. com

27

5705 Wetpaint

There’s an operational resilience associated with strong partnerships. It’s the resilience that comes from sharing a vision of the future and an understanding of the past. That is why, while we innovate on the ever-shifting technological forefront, iVeri Payment Technologies has always been committed to the solidity of partnerships.

Specialising in providing cutting-edge multichannel transaction technologies in the context of developing economies, iVeri has been a preferred payment partner of banks for two decades. Built on consistency and reliability, it is a partnership that has led to mutual success and long-term growth.

Active in 12 countries and internationally certiďŹ ed, choose iVeri Payment Technologies as your payment gateway partner.

Mobile | eCommerce | PoS | API +27 11 269 4000 | www.iveri.com | sales@iveri.com

TECHNOLOGY

29

formal sector in South Africa facilitates

mindset, Nedbank has transformed

huge amounts of economic activity but

its capabilities to deliver solutions

it’s fundamentally based on cash. How

that are convenient, secure and scal-

do we, through regulation, also go and

able. With Govender certain that the

solve facilitating trade and entrepre-

finance industry in South Africa will

neurship? That’s where we’re going to

become wholly digitally led, data will

see a significant amount of transforma-

support decision making and provide

tion take place over the coming years

key insights into the way customers

in South Africa.”

engage beyond banking services, as

Housing an exponential and disruptive

well as provide essential insights which a fri c a .busi ne ssc h ief. com

NEDBANK

30

JANUARY 2019

TECHNOLOGY

“ We are solving problems that really matter to clients and helping address some of these key pain points� — Dayalan Govender, Managing Executive of Nedbank Card, Payments and Transactional

will fundamentally change the way in which financial institutions design and bring solutions to market. Fully revolutionising its corporate culture to think more innovatively and client centered, as well as adapt a commercially savvy mindset, Nedbank will continue to place significant investment in its people and new exponential technologies to take banking services in South Africa into a whole new era.

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31

LEADERSHIP

WorldRemit: EMBRACING TECHNOLOGY

DISRUPTION IN AFRICA’S CASH REMITTANCE INDUSTRY

32

Andrew Stewart, Managing Director at WorldRemit, Middle East and Africa, discusses how cash remittance can be the ‘genesis’ of financial inclusion in Africa WRITTEN BY

JANUARY 2019

DALE BENTON

33

a f r i c a . b u s i n e s s c h i e f. c o m

LEADERSHIP

I

n the modern world, seamless cashless payments and transfers are a part of

everyday life. With contactless cards, mobile and even wearables redefining

the transferring of money, how has this affected the remittance space? Traditionally, expatriates would rely on the use of agents in order to send cash back to their families in their home countries. This was often a lengthy process and one that would incur large agent fees. Recognising this, Ismail

Ahmed created World Remit in 2010, to 34

bring the entire process of cash remittance into the digital world. With an investment of around US$140mn from leading fintech companies such as Accel Partners and Technology Crossover Ventures and the backing of Facebook, Spotify and Netflix, WorldRemit has established itself as the leading cash remittance partner worldwide.

“WorldRemit is a service provider, moving money on people’s behalf,” says Andrew Stewart, Managing Director at WorldRemit, Middle East and Africa. “But the reality is we’re moving more, than money. Sometimes we’re moving people’s livelihoods. Money that’s sent back home goes towards people’s daily living, and without it, people sometimes can’t live at all.”

JANUARY 2019

— Andrew Stewart, Managing Director at WorldRemit, Middle East and Africa

35

a f r i c a . b u s i n e s s c h i e f. c o m

LEADERSHIP

CLICK TO WATCH : ‘WORLDREMIT – HOW TO SEND MONEY ABROAD’ 36

Stewart describes WorldRemit

A key market for the company

as a disruptor, breaking down the

and one that is currently experience

antiquated system of bricks and

a digital revolution, is Africa. With

mortar and agents. He goes as far

a forecasted 500mn mobile users by

as saying that WorldRemit plans to

2020, and a 20% increase of internet

become the “Whatsapp of sending

users in 2018 alone, Africa is a booming

money.” Today, WorldRemit sends

marketplace for WorldRemit. “Over

money through 50 countries and can

60% of our total global volume is sent

send money to more than 145 world-

into Africa,” says Stewart. “What we

wide. Stewart highlights that 70%

want to do is make it far more efficient,

of its transactions on a daily basis

far more effective and importantly

are made through the WorldRemit

cheaper for those to send money back

mobile application.

home, because Africa is a significant

JANUARY 2019

“ WorldRemit is CSR, and CSR is WorldRemit, in the sense of our operating mantra is that we want to bring down the cost of remittances and every dollar we can save has as significant impact to the community” — Andrew Stewart, Managing Director at WorldRemit, Middle East and Africa

to send money from a mobile account.”

To this end, WorldRemit does have a significant part to play in furthering digital inclusion. The company strives to foster and develop key strategic partnerships with mobile operators and digital financial service providers in order to further this digital conversation. Stewart feels that in actual fact, remittance is the conversation starter.

“We have found that a remittance should be the very start of financial inclusion. It can be a means of empowering SMEs to receive funds that, traditionally, they couldn’t access.

Remittance could very well be a genesis of financial inclusion.”

chunk of our business today”.

Despite this booming digital econo-

WorldRemit is currently working with more than 130mn mobile money partners

my, Africa is still a maturing continent

worldwide and as the company

and as such digital inclusion is not in

continues to expand its digital footprint,

a position to sync up to this growing

Stewart understands the importance

mobile and internet led continent.

in nurturing and working closely with

But it is getting there, believes Stewart.

these partners. “You have to onboard

“There are more mobile phones in

the partner and then drive growth and

Africa than there are bank accounts,”

innovation with these partners to

he says. “From our perspective, the

ultimately create ease of access for

greater the financial inclusion and

the customers,” says Stewart. “We also

digital financial inclusion in Africa, the

do joint marketing campaigns and we

easier we can make it for our customers

can already point to improvements in a f r i c a . b u s i n e s s c h i e f. c o m

37

LEADERSHIP

our reach across Africa because in partnering with established companies here, we’ve become more visible.”

“When potential partners now look at us, they see a company that is disrupting and driving significant volume and change to the continent.”

With an incredibly explosive digital marketplace and a huge appetite for technology and digital innovation, the only way can surely be up for WorldRemit in Africa but Stewart acknowledges that with technology and finance comes 38

inescapable challenge. The major challenge for WorldRemit is one of regulation. “It varies of course from jurisdiction to jurisdiction, but it’s really about how regulators are embracing the digital ecosystem and the changes it brings to regulation,” he says.

“Unfortunately, if you look at some of the legislation out there, it still feels quite antiquated, and then it doesn’t really apply to companies like say ourselves or other digital players. So, it requires a lot of time and investment into engaging regulators and educating them on how the business model is actually good for the economy and good for the consumer, and ultimately JANUARY 2019

FA C T

WorldRemit have over 3mn happy customers — a number that’s growing every day.

brings down the cost and improves the efficiency of the system.”

A key way in which WorldRemit goes above and beyond to show this, is through its investment into the local communities and its responsibility to be a good corporate citizen. The World Bank Group estimates that officially recorded remittances to low- and middle-income countries reached US$466bn in 2017, an increase of 8.5% over US$429bn in 2016 and WorldRemit looks to significantly reduce those costs, something Stewart feels demonstrates the company wears its CSR on its sleeve. “WorldRemit is CSR, and CSR is WorldRemit, in the sense of our operating mantra is that we want to bring down the cost of remittances and every dollar we can save has as significant impact to the community,” he says.

“We do a lot of work in recognising individuals in the community, really supporting them and enabling them to become role models. There’s a lot we’re doing in places like Rwanda and digitising the refugee camps to bring down the costs for those in the camp.”

For Stewart, the community is truly a f r i c a . b u s i n e s s c h i e f. c o m

39

LEADERSHIP

“ We have found that a remittance should be the very start of financial inclusion.

It can be a means of empowering SMEs to receive funds that, traditionally, they couldn’t access.

Remittance could very well be a genesis of financial inclusion” 40

— Andrew Stewart, Managing Director at WorldRemit, Middle East and Africa

at the heart of everything WorldRemit

because community matters, the

does and it sends a message to

customer matters”.

partners, stakeholders, regulators and

As the company marches forward

customers, that it’s not just the bottom

towards a vision of achieving 10mn

line that drives the business. “We have

customers connected worldwide,

the ability to bring down those costs,

Stewart believes that Africa is and will

we have the ability to make the state-

remain a core market for WorldRemit.

ment that it’s not just about being more

“I think what’s clear is Africans are not

efficient and moving the money, but

scared to embrace new technology if

it’s about bringing those costs down

they see value, and I think that is the

JANUARY 2019

CLICK TO WATCH : ‘WORLDREMIT – A BETTER WAY’ 41

heart of what we’re focusing on from

living abroad and there is a need to send

a customer perspective is as long as

money, WorldRemit is there to make

there’s value in what we are offering, the

that as easy as possible for them.”

technology will be embraced,” he says.

“Africa is ripe at the moment for picking. I think you’ve got an adoption cycle that’s ready and the consumer’s ready to adopt the technology, and I think the technology’s there to be adopted. As long as there is an African a f r i c a . b u s i n e s s c h i e f. c o m

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TECHNOLOGY

A CUSTOMER JOURNEY DRIVEN BY DATA 44

Business Chief sits down with Omnistream founder Wendy Chen to find out how she’s using new methods and old tricks to survive and thrive in Singapore and beyond.

WRITTEN BY

JANUARY 2019

HARRY MENEAR

45

a fri c a .busi ne ssc hief. com

TECHNOLOGY

W

endy Chen began her career in finance.

She worked as a trader for both Barclays and Jane Street Capital, largely special-

ising in ‘quant’ trading: large transactions involving

the sale and purchase of thousands of shares at once. “I was doing quant trading for a while”, Chen recalls, “and I saw this opportunity to bring that same type of thinking to enterprises in Asia”.

With her trading experience, Chen saw an opportunity to levy her skills and experience from the finance sector and apply them to a new market and a new company. Reflecting on the genesis of Omnistream, Chen confides that “what’s really interesting about 46

the quant trading business is that so much of the secret sauce is in how you operationalize the algorithms - how you think about business continuity and operational data.”

She founded Omnistream in 2013 with the goal of using a ‘quant’ trading’s algorithmic, machine learning-powered methods to provide a statistics-driven retail analysis service, capable of keeping up with “how fast things are changing” in South East Asia and other emerging markets.

“Speed and automation are quite important”, Chen explains. “Given infinite time and infinite humans, you could probably replicate a lot of analytics.

However, you’re talking about customers who want solutions in five days, not five months”.

“It’s very hard for Western enterprises to service South East Asia. A lot of it is just costs structure.

JANUARY 2019

“ GIVEN INFINITE TIME AND INFINITE HUMANS, YOU COULD PROBABLY REPLICATE A LOT OF ANALYTICS. HOWEVER, YOU’RE TALKING ABOUT CUSTOMERS WHO WANT SOLUTIONS IN FIVE DAYS, NOT FIVE MONTHS” — Wendy Chen, Omnistream founder

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TECHNOLOGY

They’re earning nice, juicy margins in the US and in the UK. It’s really hard for them to take that really high-touch, highcost structure they have for servicing customers and bring it to South East Asia.” Chen saw a gap in the market for a new style of analysis and consulting service.

Talking about the difference between Omnistream and its competitors, she explains: “it’s a very different service.

We probably don’t customise nearly as much, because we don’t spend nearly 48

as much time consulting. We also don’t do as many in-person surveys; we’re more data-driven.”

Omnistream’s more one-size-fits-all approach means it can offer its services at a rate that is significantly lower than those of traditional consulting and analytics firms. Chen laughs, “if you look at some of the income statements from these publicly traded companies, you’ll see that they cost a good soul.”

“Because we answer the same questions the same questions over and over again, we don’t need to give our customers all the bells and whistles.” She explains the service Omnistream provides as “just answering three quesJANUARY 2019

Wendy Chen, Omnistream founder

49 tions: where do you put a store? What do you put in a store? And at what price do you sell it?”

Omnistream answers these questions using three types of data which it feeds into its complex computational algorithms to create its insights. First, transactional data — “whatever it is the business generates by operating”—that can include everything from local foot traffic to loyalty program participation.

Second, “there’s open, external data”, says Chen. “What we mean by that is how far away are your closest competitors? Are they down the a fri c a .busi ne ssc hief. com

TECHNOLOGY

50

road? Are there lots of them? Are they different?”

The third element of Omnistream’s service relies upon the application

Open data also deals with the number

of proprietary and open data to the

of people within a business’ “catchment

company’s artificial intelligence (AI)

area”. “It sounds obvious”, Chen admits,

algorithms. Part of the service Omni-

“but we’re talking about very dynamically

stream provides is the ‘fine-tuning’

changing countries, so the data from

of its AI software from previously gath-

a year ago is very different to today.”

ered data. Chen explains: “for machine

“We think of a retailer’s addressable

learning to work, your algorithms

world as more than people who just

basically need to have something

walk by,” Chen says. “If there are 120,000

called fine-tuning… you need to train

people who live in your catchment

your AI with lots and lots of data…

area, how come you’re only addressing

So, you need to work with founders

10,000 of them?”

who have worked in similar markets”.

JANUARY 2019

“ BECAUSE WE ANSWER THE SAME QUESTIONS OVER AND OVER AGAIN, WE DON’T NEED TO GIVE OUR CUSTOMERS ALL THE BELLS AND WHISTLES” — Wendy Chen, Omnistream founder

51

While the majority of analysis com-

we had a retailer tell us: ‘stop showing

panies gather this data, which clients

us dashboards. Just tell me what the

then use in-house data analysts to

answer is and why… I don’t want to

decipher, and the majority of consultan-

see your data’, they just want to get

cies rely on the “high-touch, high-cost”

to the solution.”

approach that too often proves too slow

The model is proving effective. In

and too expensive for the emerging

2018, Omnistream began operations

market, Chen has designed Omnistream

in Indonesia, Vietnam and Myanmar,

to offer data-plus-consultancy as

and Chen says the company plans to

a service. Chen reflects that customers

expand into Thailand, Japan, South

just want to know: “Hey! How do I grow

Korea and Malaysia soon.

faster and make more profits?”

“Everything in the middle is just chaos and noise.” She recalls that “yesterday

“We use the beachhead strategy”.

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TECHNOLOGY

52

retailer’ - who is looking to expand into a new market and open to operationalising Omnistream’s insights.

Omnistream’s lower cost model makes no attempt to “bill large amounts of money up front. We actually want to do a revenue split with them”: Clients simply pay a portion of any increase in profits related to Omnistream’s services. Chen describes it as: “making an investment”.

While currently Omnistream’s operations are restricted to the Asia Pacific markets, its model of data-driven retail consulting is something that JANUARY 2019

Wendy Chen knows “definitely applies to more than South East Asia.” She believes that anywhere where growth and market instability is outpacing the traditional models for consultation and analysis could benefit from the Omnistream model. “The people who win in this region are the ones who can adapt and capitalise on change as it’s happening.”

“We’re definitely looking at the whole emerging world.”

The faith Wendy Chen has in her venture is undeniable. She is throwing her startup into an ecosystem where, more than anything, being nimble is key.

Omnistream’s outcomes-as-a-service structure is a testament to her confidence in its agility and ability to bring drastic cost reductions to its chosen clients. Chen laughs again: “How many big enterprise players actually say ‘Hey, only pay us if you win?’”

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CITY FOCUS

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Identified as Africa’s technology capital, Cape Town stands as a true hub for technology entrepreneurship across Africa

City Focus

WRITTEN BY

JANUARY 2019

DALE BENTON

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a f r i c a . b u s i n e s s c h i e f. c o m

CITY FOCUS | CAPE TOWN

A

report commissioned by the Cape Innovation & Technology Initiative (CiTi), Wesgro and the Allan Gray

Orbis Foundation revealed that in 2018, entrepreneurial technology companies employ around 40,000 to 50,000 people. In comparison, the technology sectors in both Lagos and Nairobi employ 9000 and 7000, highlighting just how significant Cape Town is to the continent-wide digitisation of Africa.

‘Evaluation & Network Analysis of the Cape Town-Stellenbosch Tech Sector’, was conducted by Endeavour Insight and saw more 56

than 150 local technology entrepreneurs and 450 local technology founders interviewed to create a definitive picture of the city’s technology landscape. “Cape Town is arguably the most productive and impactful tech hub in sub-Saharan Africa,” the report says.

To look at the current burgeoning technology landscape of Cape Town, one must go back to 1999 and the birth of CiTi. The initiative was created to unlock the potential of African entrepreneurs, and their ability to contribute to the digital economy, which is predicted to reach $100trn by 2025. CiTi states that it has helped create more than 2800 jobs and over (USD $141mn) R800mn in combined revenue since 1999. It empow-

JANUARY 2019

57

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CITY FOCUS | CAPE TOWN

Cape Innovation & Technology Initiative (CiTi) has two bases of operation: the Kjayelitsha Bandwidth Barn and its main technology hub, Bandwidth Barn Woodstock

58

ers Africans with the skills and the

ture that connects entrepreneurs with

opportunities to drive Africa’s digital

technology leaders and like-minded

future through programmes such as

innovators from all around Cape Town

the CapaCiTi Tech Talent Programme,

and beyond. Some of the hundred plus

VeloCiTi Entrepreneurial Dev Pro-

companies that have been incubated

gramme and the TenaCiTi People and

at the Barn include financial manage-

Potential Programme. CiTi has two

ment and consultancy CFO service

bases of operation: the Kjayelitsha

provider, Outsourced CFO, as well as

Bandwidth Barn and its main technol-

WhereIsMyTransport and WomEng.

ogy hub, Bandwidth Barn Woodstock.

But it’s not just CiTi that is driving

Launched in 2000, the Barn is

technology innovation. The Cape

a technology incubator that provides

Peninsula University of Technology,

entrepreneurs with working space,

located in the very heart of Cape Town,

meeting rooms and the core infrastruc-

is both the largest university in the

JANUARY 2019

CLICK TO WATCH : ‘XAVIER MEHL – CAPACITI ALUMNI SERIES’ 59

region and the only university of tech-

effectiveness of its research and

nology in the Western Cape province.

knowledge production.

The university enrols more than 30,000

While the Cape Peninsula University

students across six faculties. Tech-

of Technology is the leading technol-

nology is at the very heart of the

ogy university, the oldest university in

university’s vision, which is made up of

South Africa was recognised in late

four key aims to build a university that

2018 for promoting diversity in the tra-

is highly efficient, sustainable and

ditionally male dominated IT space.

environmental conscious, to be known

The University of Cape Town (UCT),

for the high quality of its teaching

through its School of Information Tech-

and learning, to create a vibrant and

nology, introduced a women only Girls’

well-resourced living and learning

Lounge designed to attracted more

environmental and students, and to

females to the IT sector. The Girls’

enhance and develop the quality and

Lounge is sponsored by technology a f r i c a . b u s i n e s s c h i e f. c o m

CITY FOCUS | CAPE TOWN

$141mn

Combined revenue CiTi has helped generate since 1999

2014

The year Cape Town was named the World Design Capital

4.4mn+

60

Approximate population of Cape Town

JANUARY 2019

leader SAP Next Gen and The Female Quotient and will host key events that are designed to support female students to find their role in the world of IT and connect them to a huge network of fellow professionals.

“Women in our department have always shown their excellence, creativity and entrepreneurship, and their many accolades are witness to that,” said Professor Ulrike Rivett, School of IT director and the first female full professor in the Department of Information Systems.

A testament to Cape Town’s position as a growing technology hub on the world stage, some of the world’s biggest technology companies have established a firm footprint within the city. Amazon Web Services (AWS) announced in last 2018 that it will open the first data centre in South Africa.

The AWS Africa (Cape Town Region) will consist of three availability zones and will be operational in the first half of 2020. This new data centre region represents the next major step in a 14-year journey for Amazon in Cape Town. “Having built the original version of Amazon EC2 in our Cape Town a f r i c a . b u s i n e s s c h i e f. c o m

61

CITY FOCUS | CAPE TOWN

development centre 14 years ago, and with thousands of Africa companies using AWS for years, we’ve been able to witness first-hand the technical talent and potential in Africa,” AWS CEO Andy Jassy said in a statement.

“Technology has the opportunity to transform lives and economies across Africa and we’re excited about AWS and the cloud being a meaningful part of that transformation.”

Not to be outdone, Microsoft Azure announced in 2017 that it was going to deliver Microsoft Cloud to the conti62

nent through two data centres in Johannesburg, South Africa North and Cape Town. In early 2018, Vodacom, a leading telecommunications service provider across South Africa, partnered with Microsoft Azure to deliver a suite of cloud services to African customers. Data warehousing, virital data centres as well as storage and virtual network solutions are but some of the service solutions that Vodacom will bring to market. “Providing our customers with essential tools and the latest offerings in market is vital if they are to survive today’s business landscape,” said Executive Head for Vodacom Products and Services, Sabelo JANUARY 2019

The University of Cape Town (UCT), through its School of Information aonly Girls’ Lounge designed to attracted more females to the IT sector

Mabena, in an official statement about the launch. “Vodacom’s Azure solution model is simple to adapt and offers a host of application building blocks and services that will allow our customers to customise the cloud according to their needs,” added Mabena.

Microsoft, Google and Amazon may be some of the biggest players that have placed great stock in Cape Town as an enabler of Africa’s digital future, but they most certainly won’t the last.

The city will continue to attract leading technology companies from all over the world, but more importantly it will continue to invest in the development of the future generation of technologists from within country as it looks to unlock the true potential of the forecasted USD$100trn African digital economy. a f r i c a . b u s i n e s s c h i e f. c o m

63

T O P 10

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JANUARY 2019

Top 10 Most valuable brands in South Africa Business Chief Africa takes a look at the 10 most valuable brands in South Africa. Let’s see which companies made the list WRITTEN BY

HARRY MENEAR

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T O P 10

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MultiChoice Headquartered in Ferndale, Johannesburg, MultiChoice is South Africa’s most valuable television service operator. The company provides satellite television and streaming services across sub-Saharan Africa.

Multichoice is a subsidiary of the Naspers media conglomerate. Business Insider valued the MultiChoice brand at US$1.02bn in 2018.

www.multichoice.co.za

JANUARY 2019

67

Nedbank With headquarters in Johannesburg, Nedbank is one of the largest banks in South Africa, with total controlled assets of $71bn, including 704 locations and 4,193 ATMs across the continent. The company employs 31,592 people across 39 African countries, through its 2014 alliance with Ecobank Transnational Incorporated. Business Insider valued the Nedbank brand at $1.06bn in 2018.

www.nedbank.co.za

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BUSINESS MATTERS with investec 68

Investec Founded in Johannesburg in 1974, specialist banking and asset management group Investec is currently headquartered in Sandton, SA and London. The company provides banking, investment, asset management, debt management, loan and fraud protection services to customers in South Africa, the UK, Europe, and Asia. In 2018, Business Insider valued the Investec South Africa brand at $1.07bn.

www.investec.com

JANUARY 2019

69

Sasol Sasol Limited engages in the provision of services regarding mining, chemical processing and distribution, and the sale of explosives, fertilizers, polymers, and mining reagents, as well as alcohols, ketones, acrylate monomers, and other oxygenated solvents for use in various applications, such as aerosols, cosmetics, fragrances, packaging, paints, adhesives, pharmaceuticals, polishes, printing and plastics, mining, pulp and paper, steel, textiles, water treatment and purification, agricultural fertilizers, and chemicals, according to Bloomberg. The Sasol brand in South Africa was valued at $1.12bn in 2018.

www.sasol.com

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Woolworths SA Founded in 1931 and headquartered in Cape Town, Woolworths SA is a multinational retail company operating over 1,400 locations throughout Africa and the Middle East. According to Harvard Business Publishing, the original concept for Woolworths in South Africa was to emulate the UK’s Marks & Spencer. Now, Woolworths’ brand includes lines of fashion, beauty, home goods stores and premium food retailing. The company reported net sales of $530mn in 2018 and its brand was valued at $1.3bn by Business Insider.

woolworths.co.za

JANUARY 2019

71

Standard Bank Headquartered in Johannesburg, Standard Bank Group is the largest banking group in South Africa by assets, with a portfolio valued at $149bn. The bank operates in 20 countries, employs over 54,000 people, and also has a strategic partnership with the largest bank in the world, Industrial and Commercial Bank of China, which has a 20% stake in the group. Business Insider valued the Standard Bank brand at $1.32bn in 2018.

www.standardbank.com

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ABSA Formerly Barclays Africa Group Ltd, ABSA Group engages in the provision of personal banking services, business banking, credit services, corporate and investment banking, Islamic banking and wealth management. The banking group has its headquarters in Johannesburg and operates in South Africa, Botswana, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria, Seychelles, Tanzania, Uganda and Zambia. In 2018, Business Insider valued the ABSA brand at $1.35bn.

www.absa.co.za

JANUARY 2019

73

First National Bank Based in Johannesburg, First National Bank (FNB) is the country’s oldest bank, originally founded in Grahamstown in 1838. FNB provides personal, private, business, commercial and corporate banking services to millions of customers in South Africa and Botswana. In 2017, FNB received the SAcsi awards for best cellphone banking, best online banking service and best banking app, and in 2016 the bank received the Bank with the Strongest Reputation Award from Rep Trak. Business Insider valued FNB’s brand at $1.39bn in 2018.

www.fnb.co.za

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Vodacom With 103mn customers worldwide, Johannesburg-based telecommunications provider Vodacom is the second-largest mobile communications company in South Africa. The company provides mobile voice, messaging, data, financial, and converged services to the consumer, business, and 74

enterprise customers, according to Bloomberg. In late 2018 the company announced that Ms. Thoko Mokgosi-Mwantembe and Mr. Ronald Schellekens have resigned as directors of the company and will step down from the board, to be replaced by Ms. Phuthi Mahanyele-Dabengwa, as an independent non-executive director and Mr. Thomas Reisten, as a non-executive director. In 2018, Business Insider valued the Vodacom brand at $1.97bn.

www.vodacom.co.za

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MTN The largest telecommunications provider in South Africa, MTN was founded in 1994 and currently holds a 37% market share in the country’s mobile, telecommunications sector.

MTN engages in the provision of voice, data and digital services to retail customers in the 22 countries. The company also offers 76

services to corporate and public-sector customers in a total of 24 countries. The group’s services currently have over 230mn subscribers worldwide and the company recently partnered with Orange to bring its Mobile Money banking services to 22.2mn customers in South Africa, Zambia, Uganda, Swaziland, Rwanda Liberia, Ivory Coast, Guinea Conakry, Cameroon and the Congo.

Business Insider valued the MTN brand at $3.16bn in 2018, almost as much as the next two leading South African brands combined.

www.mtn.com

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Resolving digital transformation challenges with CIO Ayanda Saki WRIT TEN BY

L AUR A MULL AN PRODUCED BY

M A LVERN K ANDEM WA

JANUARY 2019

TECHNOLOGY

79

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C I O — AYA N D A S A K I

CIO Ayanda Saki weighs in on some of the top challenges and opportunities facing technology executives today

A

s more CIOs take the first tentative steps on their digital transformation journeys,

many are turning to seasoned professionals for guidance. With over 20 80

years of experience in the technology sector, Ayanda Saki, now CIO at a leading African automotive parts company, is a fountain of wisdom. For Saki, her technology career began after she obtained her Computer Science degree, which allowed her to gain a true understanding of technological innovation.

Later, before cutting her teeth in the sector, Saki completed a Master’s Degree in Business Administration (MBA).

She credits this educational experience with affording her the necessary insight to distinguish between technology for technology’s sake in comparison to technology which enables true business value.

JANUARY 2019

TECHNOLOGY

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TAILORED VOICE &

DATA SOLUTIONS PABX | Data Connectivity | Voice | Hosted Solutions

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VTNC was acquired by HeroTel in 2018, whom boast over 55 000 wireless and fibre clients. Herotel offers VTNC an quality On-Net last mile connectivity solutions for our business clients, and in return VTNC Communications enables HeroTel to offer v Contact us today to find out how we can help you grow your business.

A MOTUS PREFFERED SERVICE PROVIDER

C I O — AYA N D A S A K I

“ It doesn’t make sense to have a technical understanding of technology without having the necessary business acumen” — Ayanda Saki, Chief Information Officer 84

BUSINESS PROWESS

sure I understood the businesses, how

“I realised that it didn’t make sense

it worked and what it was trying to

to have a technical understanding of

achieve, then aligned the technology

technology without having the neces-

as much as possible to that,” she says.

sary business acumen to understand

“Technology shouldn’t be implemented

how these can help businesses gen-

for the sake of it. Technology should

erate revenue or enable strategies,”

be used to improve the quality of life of

she recalls. By understanding how

people and to enable business value.

the business works as well as what it

I think this perspective has created

hopes to achieve, Saki has been able

a good foundation for where I am today.”

to align her digital strategies to meet

This business insight has put her in

these needs, whilst remaining laser

good stead in the technology sector.

focused on the people involved.

Whilst Saki may have an impressive un-

“Throughout my career, I made JANUARY 2019

derstanding of technology – spanning

TECHNOLOGY

everything from software engineering to business intelligence – she says that, more than anything, it’s vital executives recognise that the customer is king.

“In recent years, the biggest change has been that the power is now in the hands of the customer. The customer now decides how they want to buy, who they want to buy from, and when they want to buy products and services.” As the on demand economy takes off and more and more devices are at consumers’ fingertips, this challenge is only set to amplify. Mobile phone ownership is racing ahead in South Africa and across the continent. This not only

E X E C U T I V E P R OF IL E

Ayanda Saki Ayanda Saki is an entrepreneurial, seasoned business and IT strategist, who is currently Chief Information Officer at Motus Aftermarket Parts. Prior to this role, she worked at firms such as Standard Bank, the National Research Foundation, HSBC Investment Services and The Foschini Retail Group. Throughout her career, she has led and prudently managed projects and departments with budgets of up to ZAR70mn (USD$4.86mn). Her specialties include ICT and business strategy, leadership, governance, portfolio and programme management, as well as value creation.

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C I O — AYA N D A S A K I

serves as a communication device but also as a cost-effective channel to get online, which has provided companies with the opportunity to interact with customers like never before. “Africa is very mobile focused and this creates an opportunity for us to provide an economic type of architecture for our customers,” comments Saki. “It’s required us to adjust our thinking and to align ourselves with how the customer interacts with us.”

86

THE CUSTOMER IS KING Not only should CIOs pay heed to their customers’ wants and needs, but they should also be aware of their location. Digital transformation isn’t ‘one size fits all’, and therefore companies should be wary of copying and pasting their business strategies into new locations. The key, Saki highlights, is to adapt to each location.

“In Africa, many of the companies are multinational companies and when they’ve entered this market, they’ve taken the same template of their business from international markets and applied it here which doesn’t work. For an African market, the way a business JANUARY 2019

“ Technology shouldn’t be implemented for the sake of it.

Technology should be used to improve the quality of people’s lives and to enable businesses value” — Ayanda Saki, Chief Information Officer

TECHNOLOGY

sells to its customers has to be different as their buying power is different, and the way they interact with the market has to be different. Many are entrepreneurial businesses and they typically have less access to technology. It requires a shift in thinking.”

Saki cites Unilever’s entry into the rural Indian market as a relevant case study to parallel. After conducting indepth research, the firm calculated the buying power of an average woman in India and worked out how they could effectively sell to this market. “For instance, many consumers didn’t have the buying power to purchase a 100ml bottle of body lotion so following the study Unilever launched smaller sized sachets of body lotion which were more affordable and which allowed the company to penetrate the market further,” she explains. “I think the same mindset needs to be applied in Africa.”

CONVENIENCE IS CRUCIAL The success of firms like Amazon, Deliveroo, Uber and others only goes to show that convenience sells.

This is a sentiment echoed by Saki who contends that as more and more a fri c a .busi ne ssc hief. com

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C I O — AYA N D A S A K I

businesses go digital, convenience will be the differentiating factor. “We’re seeing that the companies which are succeeding in digitisation are companies which create convenience that goes over and above just buying a product,” Saki reflects. “The better the customer experience, the more chance of customers coming back time and time again.” Data analytics, cloud computing and other emerging technologies could play a key role in helping companies realise this goal, Saki notes.

88

TACKLING THE SKILLS GAP One of the most pressing challenges facing the technology sector is undoubtedly the widening skills gap in the market. In a world where today’s graduates have grown up with the internet, tablets and mobile devices, Saki said that young people already have an inherent understanding of IT, what recruiters need to watch out for is those who can take this understanding and do something new with it.

Additionally, she believes there needs to be a cultural shift that encourages young people to enter more corporate environments.

“I believe there’s so much value in combining how older and younger people think, especially as we move towards a more digital future,” she observes. “We need to make a lot of JANUARY 2019

TECHNOLOGY

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C I O – AYA N D A S A K I

“ From the very beginning it was really hard to be taken seriously as a woman…

Even if you said something that had value, you had to say it a number of times, justify it a million times more, and sometimes even demonstrate it for you to be taken seriously” — Ayanda Saki, Chief Information Officer 90

JANUARY 2018

TECHNOLOGY

changes to absorb this new talent into the technology landscape.”

Creating an inclusive environment could also help. Having studied in apartheid times in South Africa, as well as being a woman in the technology field, Saki is all too aware of the hurdles facing workers trying to make their mark on the technology sector. “From the very beginning it was really hard to be taken seriously as a woman,” she reflects. “Even if you said something that had value, you had to say it a number of times, justify it a million times more, and sometimes even demonstrate it for you to be taken seriously.

“I think what helped me was that if I feel an issue is important, I’ll create a prototype of the suggestion which allowed me to demonstrate my ideas clearly.” On top of this, there’s also the issue of work culture. In the corporate world, where competing egos are commonplace, Saki is keen to point out the importance of remaining humble, particularly when you’re in a leadership position. In doing so, she says CIOs can create an approachable and inclusive IT environment that works with, not in tangent, to the wider business operation. “I try to keep myself humble and approachable,” she says. “It’s important to be able to explain technology in a way that makes sense to businesses so that they can really comprehend how IT can benefit the organisation.”

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Leveraging data analytics for procurement transformation

WRIT TEN BY

DA LE BENTON PRODUCED BY

S TUART IRVING

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JANUARY 2019

S U P P LY C H A I N

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MASSMART

Melanie Pike, Indirect Procurement Manager of Massmart, talks digital disruption amidst a procurement transformation

A

s a globally-based competitive regional management group, with a portfolio of differentiated, complementary, focused

wholesale and retail formats, Massmart is well and 94

truly a market leader across South Africa. With nine wholesale and retail chains, as well as a buying division, the Group has more than 400 stores and 500 buying group members across 13 countries in sub-Saharan Africa. Each and every one of those outlets and members is aligned to a shared vision; high-volume and low-cost distribution. Key to cementing this position and a successful, seamless operation across such a vast portfolio, is a solid and robust procurement and supply chain function and a fine understanding of the significant value that direct and indirect spend can bring. “I think that, particularly in multinational companies like Massmart, direct spend has been much more prevalent in everybody’s mind. But I also think a lot of multinationals are quite au-fait in terms of control spend and accountability with regards to direct spend,� says JANUARY 2019

S U P P LY C H A I N

R91.5bn Approximate revenue

1990

Year founded

10,000

Approximate number of employees 95

a fri c a .busi ne ssc h ief. com

96

Managed Print Solutions Nashua (Pty) Limited is not only a leading distributor of digital office automation and document output solutions in Southern Africa, but is also a leading provider of Managed Print Solutions (MPS).

Nashua’s MPS approach analyses an organisation’s print infrastructure and policies.

Working with Nashua can revolutionise the way your organisation manages information.

Nashua’s end goal is aimed at implementing work flow and information management solutions that reduce cost and complexity, thus improving operational effectiveness.

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S U P P LY C H A I N

CLICK TO WATCH : ‘MASSMART WALMART HQ VISIT’ 97 Melanie Pike, indirect procurement

from my early days at the lower levels

Manager for Massmart responsible for

and that allowed me to understand the

Masscash Retail and Wholesale division.

demands and the requirements at an

“On the indirect spend side of things

operational level,” she says. “I know what

we are still very far behind with regards

I’m talking about and it’s not just a wish-

to recognising the importance and the

ful thinking sort of attitude. I can do it

value in what it can bring to a business.”

with a bit more empathy for the relevant

Over the course of her career in

operational and internal stakeholders,

procurement, one that she openly admits

as well as for external stakeholders.”

she “fell into,” Pike has worked at all

The very idea of procurement, and

levels of procurement in an organisa-

the value it can unlock, has undergone

tion. This she feels has gifted her with

a major transformation over the last

an understanding of the key areas of

decade. Technology has proven a key

a business and more importantly the pain

driver of this change, particularly when

points. “I fought in the trenches a lot

it comes to visibility and accountability. a fri c a .busi ne ssc h ief. com

MASSMART

98

“ On the indirect spend side of things we are still very far behind with regards to recognising the importance and the value in what it can bring to a business� — Melanie Pike, Indirect Procurement Manager for Massmart responsible for Masscash Retail and Wholesale division JANUARY 2019

Businesses all over the world now have greater access to data and analysis as to how, where and why they are spending.

Massmart is no different to this, undergoing something of a procurement transformation in order to consolidate its spending and unlock cost savings and greater efficiencies across its entire multi-division portfolio. The company has looked to upgrade its existing procurement platforms and implement a new ERP from SAP to act as one central core system. This centralised system will allow each and every division

S U P P LY C H A I N

to access spend data from one consoli-

happens seamlessly within that division.

dated platform in order to align to one

But it is sort of a staggered approach

shared path that is in line with interna-

that manages the risk and disruption to

tional best practices.

business,” says Pike. “It is quite a process

Implementing a new system across

to manage with lots of people involved

multiple business divisions is not without

at any given time. But I think to have

challenges. Pike recognises this and

a central ERP system of this size,

so Massmart is currently rolling out the

it’s essential for us to all pull together

new ERP system separately across

as a group.”

each business through consolidated

In any form of technology transfor-

teams overseeing each implementa-

mation, it’s easy to become fixated on

tion. “This is so we can look at all the

the technology and the data and neg-

data analytics from each rollout then

lecting the one key component that is

the team engages with each relevant

central to any business, its people. As

division to ensure that that rollout

Pike has already alluded to, collabora-

E X E C U T I V E P R OF IL E

Melanie Pike Melanie is a results oriented, commercially focused supply chain professional specialising in indirect, CapEx/OpEx spend with a proven track record in building and leading a high-performance team across the end-to-end supply chain to improve business unit performance in dynamic, global environment. Centralization of spend, delivering significant cost-saving strategies coupled with sustainable service improvements across a complex global supply chain are her expertise. Melanie has a vested interest in environmentally focused, sustainable green procurement across the construction and property sector.

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99

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S U P P LY C H A I N

“ It is quite a process to manage with lots of people involved at any given time. But I think to have a central ERP system of this size, it’s essential for us to all pull together as a group” — Melanie Pike, Indirect Procurement Manager for Massmart responsible for Masscash Retail and Wholesale division

101

tion and pulling together as a group is

from a very hands-on traditional way of

crucial and so Massmart has created

doing things to a modern, digitally

a number of centres of excellence across

empowering way has been embraced

each business division. These centres,

wholeheartedly across the business.”

along with project teams, ensure that

“They can see the analytics coming

each and every person is trained in the

through. Insight is coming through and

right way, equipped with the right skills

it’s enabling everybody to do their jobs

and brought along this transformational

much faster and it’s just much more

journey. “The incentives alone speak for

user-friendly. I think that alone has been

themselves,” says Pike. “The ease of

a great driving force for the business to

information and the ease for everybody

come on board.”

to actually process their work and move

Technology has also transformed a fri c a .busi ne ssc hief. com

MASSMART

the stakeholder perspective and experience and once again data is king.

Through data, the stakeholder is able to see first-hand the efficiencies and both the existing and potential cost saving opportunities that are enabled through technology. For Pike this represents a true turning point, both in indirect spend and in being able to build procurement as a service portfolio.

The tools are there to show that procurement and indirect spend is bringing true value to the business like 102

never before, it’s no longer just hearsay.

“Procurement needs to be seen as a service department to the business, especially in terms of indirect spend management, which had not been the case previously,” she says. “Technology has enabled a rebranding of procurement. With that comes all the good stuff that we’ve brought to the table in terms of the digital transformation, such as a capex tool that we are looking to implement in the new year that provides complete visibility and live access to the budget approval process.

“Again, this is improving the stakeholder experience. Its more efficient and provides them with quality data JANUARY 2019

S U P P LY C H A I N

Massmart launches sixth solar plant becoming the biggest producer of renewable energy in the South African Retail Sector

103

a fri c a .busi ne ssc hief. com

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S U P P LY C H A I N

105 and analytics and for me it’s a total

ties to grow together. “I think we can

rebrand of what procurement can

listen more to our suppliers in terms of

enable for the business.”

seeking the potential opportunity that

A supply chain and procurement

we’re missing. You need to build your

function can only be as strong as its

relationship, so I believe in going to task

supplier and vendor network. Pike

for my vendors or suppliers just as

understands this and is a strong believer

much as I expect them to do the same.”

in Supplier Relationship Management

2019, Pike admits, is both an exciting

(SRM). Early in her procurement career

and challenging year for Massmart as

she was driven by one message; you

it will see the final stages of the SAP

are nothing without your vendor.

implementation as well as the continued

“Without a good supplier, you don’t have

transformation of the procurement and

a business,” she says. Pike believes

indirect division. Massmart will look to

that everything needs to be done in

better manage its capex spend through

collaboration and that Massmart along

e-auctions and reverse auctions as well

with its vendors must seek opportuni-

as continuing to embrace the digitisation a fri c a .busi ne ssc h ief. com

MASSMART

106

JANUARY 2019

S U P P LY C H A I N

“ It’s more efficient and provides them with quality data and analytics and for me it’s a total rebrand of what procurement can enable for the business” — Melanie Pike, Indirect Procurement Manager for Massmart responsible for Masscash Retail and Wholesale division of its processes while moving services online.

“We will continue to gather more information and data and make sure that from a strategic point of view, we’re leveraging Massmart as a group and focusing on total cost of ownership rather than just each individual vendor and a price. We areooking at restructuring our relationships with our key vendors at Massmart as a division,” she says.

“It’s just using strategic sourcing as a division to drive value creation, not at some divisional level but at group level. I think what’s going to be the key driver for us over the next year, is to change that mindset from divisions to group.

So, using consolidated data and standardisations as a group, and using that to consolidate, leverage and drive all the good practices.”

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108

TRANSFORMING PROCUREMENT IN A DIGITAL WORLD WRIT TEN BY

DA LE BENTON PRODUCED BY

S TUART IRVING

JANUARY 2019

S U P P LY C H A I N

109

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Nicky Hanson, Senior Procurement Manager in South Africa, discusses how business can transform procurement in order to succeed

O

ver the past ten years, procurement as an industry sector has radically transformed from its traditional position as an afterthought

to a business. More and more businesses are waking up to the notion that procurement has become a far more integral cog in enabling strategic growth and innovation for business and this is something that Hanson recognises and has seen first-hand in her 110

procurement career in South Africa.

“Procurement departments are often called prevention departments, or used to be historically in any case,” she says. “The key to success for us and other companies is to really try to break away from the siloed ways of before and collaborate more to bring procurement into the wider business.”

Hanson will often work with other stakeholders around tenders and purchasing to realise and better identify where procurement can ascertain the best value for money without compromising on the quality of products.

Having worked for the British Military in logistics and supply chain, particularly in direct procurement and local resourcing, before moving to South Africa and working with a number of F&B companies, Hanson has an experienced insight into understanding JANUARY 2019

S U P P LY C H A I N

111

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112

“ The key to success for us and other companies is to really try to break away from the siloed ways of before and collaborate more and bring procurement into the wider business” — Nicky Hanson, Senior Procurement Manager

the nuances of challenging market dynamics. This experience, she feels, gives her the necessary edge required to act fast and respond to the many challenges that building or transforming a procurement function in a huge market like South Africa will bring.

“You have to think on your feet. You have to overcome challenges from unforeseen and last-minute changes and requirements, that you just have to deal with,” she says. “As much as we always want to have a set structure and procedures in place, it doesn’t always work that way in the real world.

JANUARY 2019

S U P P LY C H A I N

CLICK TO WATCH : ‘CHARTWELLS’ 113 Operational challenges always come in between and you need to address that as quickly as you possibly can in order to succeed and grow.”

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JANUARY 2019

S U P P LY C H A I N

With little to no structure, no approved vendor or product lists and an outdated ERP System in place,

savings and foster more collaborative and effective relationships.”

Over the last few years Hanson can

Hanson recognises the challenge

look at a number of key successes

that lay before many people in pro-

across the industry and she feels the

curement. The goal then becomes

most important proof point for any

one of streamlining, optimising the

company is the optimisation of those

entire procurement function and

supplier and vendor relationships.

consolidating volumes in order to

“How do we stand out? How do we get

establish better pricing.

people that want to work with us?

“There were more than three and

There has to be a collaboration and

a half thousand vendors that we had

a partnership between clients and

previously worked with,” says Hanson.

suppliers, and we as a team have really

“After an initial clean up, we narrowed

strived to work towards that.”

that down to 900 and we are con-

“For me, it’s proven very successful.

stantly working with that supplier base

I’ve managed to really optimise our

to improve compliance, realise cost

relationships and get some very unique a fri c a .busi ne ssc h ief. com

115

structures and agreements with the suppliers, just by changing the way that we would normally operate.”

“The SAP model that is widely used was the correct model then but not for the industry today,” she says. “Back then it was purely financial but now we are looking at warehousing and distribution and vehicle fleets and a whole array of things that just didn’t work with that older model.”

“With new ERP systems now in place, it’s created other opportunities and benefits for business. If we can tap into

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S U P P LY C H A I N

117 those and open the business, the pricing

empowers its employees to innovate

will become better, the support will

and go above and beyond in order to

become better, and there will be a more

succeed. She does, however, under-

structured flow.”

stand that the business leaders

A transformation of any size, particularly one that involves a complete restructuring of an operating model

themselves have to do their part in order to enable this.

“I do think we need to invest more in

and technology system, requires the

skills development as a profession.

buy-in from the entire business. In

We do our best to attend procurement

order to achieve any form of progress

conferences and trade shows to gain

and indeed growth, Hanson notes that

insight into how the wider industry is

businesses have to invest in the biggest

develo-ping a modern-day procurement

resource at their disposal, the people.

professional,” she says.

Hanson is a firm believer in creating a workplace that challenges and

Ultimately, it’s about empowering the individual and ensuring that each a fri c a .busi ne ssc h ief. com

“ I think there is still a lack of understanding as to the full value of the procurement department and the benefits it can bring” — Nicky Hanson, Senior Procurement Manager 118

JANUARY 2019

S U P P LY C H A I N

and every person understands their role and how important they are. “There’s a lot of other ways to incentivise people.

It doesn’t always have to be monetary.

That reflects on the business because they feel valued, they can see the role that they have and will continue to play is recognised.”

As businesses continue to redefine their procurement functions, Hanson looks at what businesses have achieved to date, but she understands that no transformation can ever truly end and that they must continuously look at their procurement function and identify ways they can improve.

For Hanson, that starts with educating and making the wider business fully realise the true value that procurement can bring.

“I think there is still a lack of understanding as to the full value of the procurement department and what benefits it can bring,” she says. “If we can continue to improve that, through notable successes, and make sure that we’re more than just the fixer of problems then it would represent a great shift within the business. We’re not quite there yet, but if we continue along this path we will get there.”

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