New York-listed SAP this morning said it would pump as much as $500 million (R5.3 billion) into bolstering growth from the African continent. It will initially focus on boosting its returns in high-growth sectors such as energy and natural resources, the public sector, financial services, as well as telecoms and utilities.
The goal is to establish the African region as one of the company's top-five growth markets globally. Much of the direct investment will be outside South Africa, where SAP already has a solid footprint.
SAP has been present in South Africa for 22 years, and is now accelerating its investment into the continent, says Robert Enslin, member of the executive board of SAP for the European region. He notes Africa is now joining the list of other regions that have benefitted from specific, board-approved, investments that are intended to accelerate growth rates.
Seven-year plan
Enslin says SAP's $500 million investment is set to accelerate growth up to 2020. "We do see significant growth potential in expanding SAP Africa's African presence across the continent."
SAP has a focused expansion plan that is based on regional needs, and also aims to aid small and medium companies to grow as well as improve skills, says Enslin. "The journey in Africa has already begun as the team has set in place initiatives."
Pfungwa Serima, CEO of SAP Africa, notes the company has identified several regions in Africa: West Africa, Southern Africa, East Africa, North and Central Africa. He adds SAP is already doing much with key partners.
"The world needs a strong Africa," says Enslin, commenting that the continent has a unique opportunity to be "massively" successful. He sees the announcement of the investment as a catalyst "for amazing growth on the continent".
Globally, SAP has identified eight areas as offering the potential for high growth: China, Middle East and North Africa, Africa, Turkey, India, Brazil and Mexico. Of these, only China, Brazil and the Middle East and Africa have previously received specific acceleration investments, which have amounted to EUR6 billion (R85 billion), says Enslin.
Some 26% of SAP's global workforce - or 17 000 people - work in its growth markets, which accounts for 24% of new software revenue, an amount that topped EUR1 billion in 2013, adds Enslin.
SAP's Africa growth plan is built on the following pillars:
1. Accelerating industry growth in energy and natural resources, utilities, public sector, financial services and telecommunications in the core countries of South Africa, Nigeria, Kenya, Angola and Morocco.
2. Promoting innovation on the continent by accelerating the rollout of core SAP technology solutions such as mobile, cloud and the flagship in-memory platform SAP HANA.
3. Enhancing small and midsize enterprise growth, which contributes 40% to Africa's economy, by selecting Kenya as the next market for the company's Emerging Entrepreneur Initiative.
4. Building foundational growth and skill development with the launch of additional Skills for Africa Scholarship Programme sessions in South Africa, Kenya, Nigeria and Angola by year-end.
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