IQbusiness is positioning acquisitions as a key component of its growth strategy, with the consulting and technology services company looking for fintech firms with specialised intellectual property (IP) that can be scaled through its existing customer base.
The company, which combines consulting and technology capabilities under the IQbusiness and IQ X brands, is looking to strengthen its position through targeted acquisitions, while expanding its services.
In an interview with ITWeb TV, Rob Godlonton, CEO of IQbusiness, said the acquisition strategy is focused on bringing specialised capabilities into the group, rather than pursuing growth for its own sake.
Earlier this year, IQbusiness acquired the Silversoft Groupto expand its enterprise resource planning and professional services automation capabilities.
Silversoft, which operates in SA, the UK and Middle East, brought its client relationships and a team of employees to strengthen its acquirer’s enterprise technology offering.
IQbusiness is targeting organisations with proprietary technology and industry-specific solutions, particularly where the company's established customer relationships can provide a route to wider market adoption,” explained Godlonton.
“Silversoft enables us to scale up through what we call joiner acquisitions, and we'll continue to do that. We're looking to do more of those acquisitions to build out our security data capability, enhance that.”
The strategy also reflects the attempt to differentiate IQbusiness through the combination of consulting expertise and technology capabilities brought together following the firm’s acquisition by Reunert Group in 2023.
Godlonton noted the company sees its client base as an important part of the proposition for potential acquisition targets, particularly businesses with technology that can be deployed more broadly.
He added that the IQbusiness is already engaging a prospective partner. “Hopefully, we'll close the deal in the next few months. The company operates in financial services; they've got a unique platform. We've got access for them and we can take their platform into all the financial services companies in our portfolio.
“We're looking for organisations that are delivering unique IP-based solutions to clients. The big advantage that we have as IQbusiness in South Africa − being a level one black-owned organisation − is we have a list of clients to die for. So, that's one thing that we offer organisations with the potential to join us and why an organisation would want to join us.”
Rather than focusing only on adding scale, the company is seeking capabilities that can extend its offering into specific industries and give existing and prospective customers access to specialised technology, he pointed out.
Offshore ambitions
While SA remains the primary growth market, IQbusiness is also seeking to take capabilities developed locally into international markets.
It already has an international delivery operation and says it is using South African skills to support customers beyond the domestic market.
Its global capability centre in Cape Town has more than 50 people supporting a large international business school, while the group also has operations serving the UK and Middle East.
Godlonton said this provides another avenue to expand without moving away from its South African base.
“The objective is to use the capabilities available in SA as part of a broader delivery model. So, going back to your question around where do I see growth in future? Very much in South Africa still, but also being able to take the capability and skills that we have in SA and deploy that through our UK entity, through our Middle East [entity]. We're very excited about the growth of IQbusiness and and how we scale up.”
The international strategy is therefore being pursued alongside domestic expansion, rather than as a replacement for the South African market.
‘AI vomit’
Godlonton takes a critical view of organisations rushing to use generative artificial intelligence (AI) without establishing a clear business purpose.
He described a growing problem in which companies produce AI-generated material simply because the technology is available, rather than applying it where it can create measurable value.
He believes consumers are becoming increasingly capable of recognising material that lacks genuine human input or subject-matter expertise, and describes poorly-considered AI-generated output as “AI vomit”.
“I call it AI vomit because people haven't thought through it. They've just gone, ‘it’s AI, it's out there’ and they’re deploying it without sufficient judgement or understanding of the problem being addressed.
“So, if we are consulting to a client, it's about using their experience, using their AI tools to get them more value for their clients. For us, it's about utilising that experience and knowledge. The emphasis on expertise is particularly relevant as organisations grapple with how to assess whether AI spending is translating into actual returns.”
Despite the acceleration of AI adoption, Godlonton does not believe companies can bypass the underlying technology work required to modernise their operations.
He argues that traditional digital transformation – infrastructure, cloud platforms, data and digital processes − remain prerequisites for organisations wanting to make effective use of newer AI capabilities.
“For us, it is important that you get your foundation. So, your technology managed services, infrastructure, cloud platforms and then digital transformation as well is just as important. This makes traditional digital transformation programmes relevant even as companies increasingly redirect attention and spending towards AI.”
Godlonton advised that businesses should continue progressing with their existing transformation programmes, while using AI to accelerate parts of that work.
“People ask me: should we still be going on a digital transformation journey? Yes, without a doubt. And organisations are at different stages in that journey; they must continue on that journey.
“The same principle extends to cloud adoption. IQbusiness expects cloud and data centre demand in South Africa to continue growing as companies pursue digital transformation and deploy AI workloads requiring greater computing capacity.”
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