Johannesburg, 12 Sep 2023
Diversified technology group 4Sight Holdings plans to continue expanding its business across Africa, and further afield, as the demand for digital transformation and fourth industrial revolution (4IR) technologies grows in the enterprise market.
"I think Africa is geared for digital transformation, because of the lack of all the previous investments that didn't happen with copper lines, etc. But now everything is in the cloud. Our cloud adoption in Africa is [doing very well]," Tertius Zitzke, CEO of 4Sight Holdings, told Connecting Africa in an interview.
"In South Africa, it's picking up really strongly now. There was a resistance at first [in SA], but I think it's because we had so many established businesses already. But in the rest of Africa, that adoption is just superb," he added.
4Sight focuses on a cross-section of established, new and emerging technologies with solutions including information and operational technologies; production scheduling; robotic process automation; artificial intelligence (AI) and machine learning (ML) solutions; augmented and virtual reality solutions; cloud and business intelligence solutions; and industrial internet of things (IOT), to name a few.
The company has more than 3 000 customers in 61 countries in both Africa and abroad and works with 750 cloud partners. It has customers in Europe, the Middle East and the US and is expanding into Asia-Pacific.
"Our next frontier that we are tackling now is Australia. We call it 4Sight Pacific. We work there already, but we're looking at that as the next expansion. We'll probably do an investment soon," the CEO explained.
In Africa, its biggest business is in the SADC region. Traditionally, the company has focused more on English-speaking countries, but is now also expanding into French-speaking Africa.
"Central and East Africa are doing well – Kenya, Tanzania, Burundi, etc. Malawi is our third best performer right now, so it's really doing very well," Zitzke explained.
"I think, because of the internet connections into that central-eastern Africa side, that has really boosted their technology business. The area that we specifically focused on is more on ERP (enterprise resource planning) and people solutions. With the operational technology business, what we also found is that we do a lot of installations in Africa," Zitzke said.
"When COVID hit us, all of a sudden, instead of flying an engineer to Zambia, we just got a local guy and used Microsoft Teams to commission the site, so that changed our business model, and now we are actually more cost-effective as well. It's really working well for us," he added.
Zitzke said when the pandemic hit in 2020, 4Sight was ready to service the modern digital enterprise, which led to "an explosion of business" and three years of double-digit growth in revenue.
"Since my appointment as CEO in November 2019, my focus remains driving innovation through product-focused digital transformation, with the support of our leadership team," he said.
Business growth trajectory
4Sight has delivered strong business performance over the past few years and in August 2023 reported double-digit growth in revenue and profit for the six months ended 30 June 2023.
Revenue for the six-month period increased by 37.1% to reach R451.3 million (US$23.6 million), with revenue growth experienced from across its four business "clusters". Half-year operating profit also increased by 121.1% to R26.8 million ($1.4 million) year-on-year (YOY).
Zitzke attributed the company's performance to the continued acceleration in digital transformation and cloud adoption on the African continent, as more companies look to the convergence of operational and information technologies with the business environment to ultimately embrace AI to enhance productivity.
"4Sight's continued investment into the AI business case centres on automation and efficiency, data analysis and insights, cost reduction and resource optimisation, predictive analytics and productivity – that's the real benefit, all based on accurate, real-time data," explained Zitzke.
4Sight's channel partner cluster delivers solutions indirectly via 800+ partners in Africa and the Middle East, and it grew operating profit by 90% compared to the previous year.
The group's operational technologies cluster grew operating profit 53% YOY, the IT cluster recovered very well from 2022, growing 49%, while the business environment cluster grew by 12% YOY.
Furthermore, 4Sight Holdings continues its drive to extend its reach into more regions and global markets, with strategic partnerships with major global technology companies in place to add value and additional capabilities to its partners' solutions and open up new markets and industries.
"4Sight's go-to-market strategy remains on track to achieve the group's strategic revenue mix objective, which aims to generate 70% in annuity-based revenue and 30% from new sales through a continued focus on creating 'as a service' solutions," added Zitzke.
4Sight has always positioned itself as a 4IR technology company, but Zitzke said this has now evolved into what it calls "Enterprise 5.0".
"I think the 1980s was really the big hardware computer boom, the 1990s was networks, the 2000s was the explosion of the internet. The 2010s decade was mobility and everything mobile. Then everybody said the 2020 decade will be automation – everybody thought about self-driving cars, etc. But that sort of disappeared," he said.
"There is still automation, but it's more automation of processes around people. We believe that is key – how you retain your staff for a business to survive in Enterprise 5.0, and we've got the total solution for that. I call it the DNA string of a modern digital enterprise. The first thing to focus on is people. Then it's about customers, operations, finance and product innovation requirements," he said.
Partnerships grow across Africa
Strategic partnerships with key vendors from across the globe are a major focus for 4Sight. Some of its channel partners include Microsoft, Sage and PaySpace.
For example, 4Sight offers a software as a service (SaaS) version of the Microsoft Dynamics 365 Business Central application in 22 countries across Africa.
"About four or five years ago when this whole thing of software as a service really came out with Microsoft, and the rest of the vendors, we decided to take that same model and run these partners. So, we are an indirect cloud solution provider for Microsoft and all the other big players. We manage the partners, we manage the relationships with the big vendors and build those businesses in Africa," he explained.
"I think we are getting close to 40% of our revenue coming from that now. It's really exploding and working very well for us. Africa is a big growth area for us, but South Africa is still the biggest part of our business," he added.
Overcoming turbulent times
4Sight Holdings has been listed on the Johannesburg Stock Exchange's (JSE's) alternative exchange (AltX) since 2017. The AltX is a division of the bourse that focuses on good quality, small- and medium-sized high-growth companies.
The group's growth might look impressive now, but the company has faced many challenges over the years.
A boardroom drama in late 2019 resulted in then CEO Vincent Raseroka and five directors, including the chairman, resigning in the space of a month.
Then the group's shares on the JSE were suspended after it failed to submit its interim financial statements within a mandated three-month period.
Zitzke was brought in as CEO in November 2019. He admitted the company "was in shambles" at the time and that he was forced to re-strategise and oversee a major consolidation and rebranding of the company.
"We went from an investment holdings company to a total digitally transformed business, delivering the conversion between business environment, information technology and operational technologies, all under one roof – and we are also structured that way," he said.
Zitzke said management worked hard to build a better company culture and rebranded and realigned over 25 companies with completely different logos and corporate identities under the 4Sight brand.
He told the story of his first speech to the management committee as CEO in which he tried to get across the idea of unity for the company, using a cupcake analogy.
"I had a picture of a lot of cupcakes, different colours and decorations. I asked them, do you want to be a cupcake or do you want to be part of this huge wedding cake? I still use that [analogy] a lot. When I show our results, I always say look at how the wedding cake is growing – all the layers at the bottom, you know, getting bigger and fatter," Zitzke explained.
"The change management was enormous, but I think it worked out tremendously," he said of the company evolution over the past three and a half years.
The company has also begun focusing on skills development to bring more developers into the company and make up for the skills drain it has experienced over the past few years.
"In 2021, when the gates opened [after the pandemic], we lost 30% of our workforce due to immigration, semi-gration, etc, but I think it was just a backlog from COVID that happened that year," he explained.
The group decided to begin training its own consultants and developers and launched a programme in KwaZulu-Natal in South Africa.
With backing from corporate sponsors, 4Sight trained 50 graduates through a six-month course.
"We decided to train them, not in theoretical stuff, but really make them functional consultants. We split them up into 25 cloud developers and 25 functional ERP consultants. It was very successful; we only had two dropouts out of the 50. We placed everybody in a job, some of them with some of our partners, and we hired 42 of them ourselves," Zitzke said, adding that 4Sight plans to run the programme again in 2024.
Ambitions for the future
When asked about the company's strategy going forward, Zitzke simply replied: "Our strategy is that we are staying with our strategy, we're not changing.
"We are very solid, we've got a simple balance sheet, we've got cash, we've got good debtors, we've got very nice creditors and it's going very well," he said.
The company is, however, working on new operational technologies like a smart energy solution to help corporates embrace the global environmental, social and governance (ESG) movement.
"If we take a big office building and look at the data of when people come into the office, we can use that data to only run power on the floors that need to be occupied. So, as you enter, you are told you can go to a particular desk on a floor that has power, and then the rest of the building is switched off. So that's where artificial intelligence is going; you can take the big data and predict who is going to be at work when and where to be more effective," he explained.
He believes the opportunity for AI in business is huge, but you need to know how to use it correctly.
"This is very shocking and interesting – only 14% of all the data that's hosted in data centres like Azure and Amazon is used for AI," he said.
"Artificial intelligence in business is great, we integrated our workflow system with ChatGPT a few months ago already. If we ask it to build us a workflow process for onboarding people in an organisation, it will do it perfectly. But what it doesn't have is your internal control processes in your business – your delegation of authority, that stuff is not open and available in the public cloud. The moment you put it in there, you've got problems, then your opposition will see what you do," he warned.
"I think there is still a long way to go [with AI], but I think we will probably see that technology deployed in a specific domain so we can use it internally. We are building processes on artificial intelligence that automate specific jobs that are a waste of time for people," he said.
"That's just the way business is going. Now humans can actually spend time on growing their business and not chasing after historical problems, trying to reconcile stuff, because machines and systems can [take that over]. We see a lot of moves into that now, automation of processes around people. That is the AI of business future. I'm not talking about AI of student answers for tasks [through ChatGPT]. So business is evolving and it's a whole new world," Zitzke concluded.