There was a glorious moment of surprised (and surprising) silence among the tough business-IT audience in Hyde Park, Johannesburg, on Thursday at the Software AG Digital Business Day 2016. Jaws dropped visibly, before furiously whispering cautious optimism at neighbours.
Mike Slater, Software AG COO for EMEA North, had just told them that the local subsidiary of the German firm had outperformed its global (global!) siblings in 2015 and the start of 2016. (You read right: just when many of us were really grumbly about the rising cost of our morning porridge and wondering if SA Inc would survive the latest headlines and potential rates increases.)
What lies behind this local success? Slater said it is "because a lot of the innovative ideas in Software AG come from the talents and skills based here in SA".
In most companies, head office comes up with innovation, but in Software AG, apparently South Africa does. "We're taking the innovations in SA and replicating them to the rest of the world," he told the audience.
The mood in the room palpably shifted from "just another conference on digital business" to "wow, let's see what we can do in our own business". In an industry known for its vapourware and cynicism, one that has been eroded by the brain drain and is staffed by people who know they can emigrate tomorrow because of their scarce skills, it was a moment of absolute clarity: SA means business. Despite the politics. Despite the drought. Despite the challenges in education (more about that later). And maybe, actually, precisely because of those challenges.
Later, in an interview during the lunch break, Slater said: "There's been a lot of talk about talent and innovation in this conference, but it's not just that South Africa has the right skills. They also have talent, and you can't give people talent: they either have it or they don't."
Having talent isn't good enough to keep a business running, though. How that talent is deployed matters, Slater said, and influences the innovation it is able to foster. "In most countries, when you talk digital business, you're talking about getting legacy systems to start speaking to each other. In South Africa, though, in some government departments you are literally starting from scratch with a paper-based system. That in itself necessitates innovation, tenacity and drive to make the best of the customer's investment in technology."
Essentially, South African technologists have come up with new ways of putting together the modular systems Software AG supplies, and this has resulted in the parent company creating nine different combinations of its products to sell as new platforms to its global customers.
"Many of the things we've learnt from the SA team we're implementing as best practice globally. We now term it 'strategy-to-execute', looking at business processes and what-ifs. Linking our strategy stack to an execution stack is a huge differentiator. And it has become the basis of how we approach the challenge of digital business: understand the business problem, plan an intervention and execute it within two years."
The "packaged platforms" are also the result of some internal use of business intelligence and big data available to Software AG. "Our R&D guys looked at historical data of combinations of products that we have repeated the most - and many of them are from SA - and also looked where the combinations got the best ROI. Then we looked at our sales pipeline to ensure the products genuinely are a platform with the same look and feel. We now have nine repeatable use cases, of which four are directly from SA, and those customers have become advocates."
Not only does the South African subsidiary lead globally in terms of revenue, but it is also ahead of the curve on innovation, said Slater. "A lot of it does come down to leadership. Vice-president and SA country manager Mohamed Cassoojee has been very tenacious that we qualify our sales pipeline and focus on solutions where nobody can touch us. As a result, we speak to captains of industry - C-suite people, not just departmental heads - to build up a business case and the commercial case around that. These deals tend to be bigger deals, with large ROI, and we tend to price our software to produce a return within nine to 12 months, sometimes even within the current financial year. We discovered that we were four times more likely to win those deals, which are on average five times the size, although they have longer sales cycles," Slater explained.
Earlier in the day, a speaker had referred to the stress of chasing "quarterised" results, where quarterly outcomes, rather than longer term thinking, determine company strategy.
Similarly, Software AG speakers throughout the day focused on "find the thing that you can do now" and "it doesn't matter where you start, as long as it is an improvement on your current business processes". This is in stark contrast with the traditional way of changing how business operates, which usually involves at least a year of planning among managers.
Slater is quick to praise his direct report Cassoojee with creating "a really important family feel" in the local business.
"Because everyone is looking after each other, whenever we're doing a large engagement, everyone is talking about it, too. That retains the talent, and people want to be part of a family. They will leave an organisation, but it's not really because of a better salary. Usually, they leave if they don't feel they have friends at work. Since Mo's taken over, he has created and changed the culture of the team," Slater said.
Part of that culture is a realisation that the talent pool has to be refilled. During his talk before lunch, Cassoojee said: "The employee experience is absolutely key to your digital business. They want to understand what value they add to society and feel good about themselves. It is absolutely important to create the right culture, where leadership supports out-of-the-box thinking."
"The world is becoming a very sharing ecosystem - ownership and acquisition are less important than sharing. You have to partner to grow. We have some very good talent here in SA and I sometimes have disagreements with my international colleagues because we lose talent to other countries. But you can't stop someone's progress. Instead, we need to start engendering programmes to keep rebuilding the talent and keep a good pool of talent in the country," Cassoojee said.
Perhaps the hope that was kindled by the conference is best summed up by Russell Williams, vice-principal at the school that benefited from the computer lab, Eersterust Secondary School. "For the first time since I joined that school, we've had our prelim exams for Computer Applications Technology in a computer room that had no problems, and the kids sat in an air-conditioned environment. But today, I also heard every problem we've had in that school described as a 'business problem' and there have been solutions for them. It was very inspiring - you should invite young principals to join you at these discussions. We'd solve the education problems."
As Cassoojee took the mic back from Williams, he quipped: "There you have it - sometimes we forget that it is the people who benefit when you use technology."
And that is just about the best argument in favour of digital business that this jaded journalist has heard.
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