Being a small, medium and micro enterprise (SMME) in the information technology (IT) sector may pose tremendous challenges, but Eastern Cape`s Mars Technologies shows that it is not impossible to make a great success of it.
From its humble beginnings three years ago, when two brave men left the confines of a large IT company to bring IT expertise to the Eastern Cape province, Mars now boasts 32 staff members, is about to open an office in Johannesburg and is in the process of negotiating with players outside of SA, standing on the verge of an African footprint.
And all this despite enormous obstacles, the major ones being lack of financial support and staff retention.
"As an SMME, you do not get support from the banks," says Noel Nyemba, MD of Mars Technologies. "Credit facilities are almost non-existing. When a big opportunity comes along, you need to source software and hardware from suppliers, so you are almost stifled and forced to stick to small projects."
Of course, as a new entity, Mars was too small to be noticed, and unable to instil the trust it could deliver.
"But a few organisations, especially government, were willing to support us and give us a chance," says Nyemba.
He took some major lessons with him from his previous company, the most important one about how to treat staff. Says Nyemba: "At my old job, ideas were not shared and challenges not communicated. I was also not too happy with the differences on how employees were handled. There was preferential treatment and a very marked glass ceiling for some of us. On the other hand, in Mars anything that affects the livelihood of our staff we try to share across the spectrum. We even have an open plan office. We do not put barriers between us. My desk sits next to one of our sales clerks."
In 2000, Nyemba and two fellow men saw a gap in IT in the Eastern Cape. Normally, people get trained and then move to Gauteng or the Western Cape, leaving the Eastern Cape with a skills gap. "By locating in the Eastern Cape, Mars has attracted other IT services providers, making a major contribution to filling the province`s IT gap."
His advice to others trying to make it in this arena is to start small, have financial systems and controls in place, link up with a reputable company to assist you in learning business skills and try to start out with government contracts, to build a reputation and experience and become noticed by the private sector.
"About 70% of our business is government. By making sure we gave them the best service possible, they began to have faith in us and enabled us to build an impressive record, with which we could then attract private business," explains Nyemba.
"Also make sure you team up with a reputable company. In our case, we approached Comparex Africa because they had done very well for themselves, without any controversy."
Comparex Africa and Mars Technologies recently celebrated the first anniversary of their black economic empowerment partnership, signed in May 2002. The partnership has benefited both parties in boosting the bottom line, both directly and indirectly.
Mars Technologies is 100% black-owned and managed, of which 25% are black females, and covers the entire Eastern Cape. Comparex Africa, with its national and even regional footprint and depth of IT and business skills, can assist the smaller company in undertaking the kinds and levels of jobs which were previously beyond its reach.
The strategic alliance between Comparex Africa Eastern Cape Region and Mars Technologies will position the two as leading ICT service providers in the province. This is one of the first empowerment initiatives in the ICT industry in the province and it will enable Comparex Africa to not only deliver on the ICT requirements of the province, but to ensure that much needed skills and resources are transferred to all participants.
Mars identified Comparex Africa as a company that "would put their money where their mouth is" by entering into an agreement, which would not only make extensive skills, capacity and resources available, but that would endorse empowerment to the extent that every project entered into promotes `masibambane` (taking hands and working together). The latter would be accomplished through, among other things, identifying areas for training and skills transfer.
"We are extremely happy with Comparex Africa. It has been a mutually beneficial year, with several new business opportunities opening up for both partners, due to the relationship," says Nyemba.
"The partnership assists Comparex Africa in Port Elizabeth and East London in targeting new areas, especially the rural areas, more efficiently and appropriately."
"We track opportunities together and place enormous importance on knowledge transfer from both sides," explains Johan Herselman, Comparex Africa sales manager in the Eastern Cape and driving force behind the operational aspects of the partnership.
One of the most rewarding lessons for the Mars Technologies team has been in formulating successful tender responses and making difficult business decisions, a major area of expertise for Comparex Africa.
"Mars Technologies` engineers have been stationed with our own engineers on some of our bigger sites, for direct on-the-job training," says Herselman, adding that the first year`s emphasis on management skills will now move more to business knowledge transfer.
Strangely, the two companies are competitors on many levels, says Herselman. "While we overlap at about 90% with Mars` solutions, a Mars/Comparex Africa proposal would be unique to our clients because it is a true marriage of two parties, each with their own unique strengths and contributions."
At the same time, the two companies` cultures are very close - both are client-centric and aim to provide the best technology set, both are players in the same market, although Mars Technologies has a different level of experience in government.
Comparex Africa and Mars Technologies have considered other BEE relationships in SA, but found much "window dressing" going on. As a result, they developed their own model.
"We just sat down and addressed expectations and concerns from the very outset, always allowing everyone to speak their minds," says Herselman.
"The honeymoon phase is now over, but we will continue talking openly and honestly with each other, building on an existing relationship of trust. We are already beginning to reap the rewards of a year of hard work and resounding success."
A major new client win has been the Nelson Mandela Metro contract, while some tenders are currently running with government, parastatal and private sector organisations.
Nyemba`s advice to other businesses considering the same: "Honesty is key to the relationship. You have to continually build the trust and be honest and open with each other."
Says Herselman: "Companies have to address their BEE component and be prepared to really invest in a mutual transfer of skills, because hands-on training is the most dramatic way to turn the skills gap in SA around."
Both companies want to place a major focus on bridging the digital divide within the country, especially in rural areas. Mars Technologies is an active participant in an SMME "incubatorship" programme in the Eastern Cape Province, where other SMMEs from industries are exposed to opportunities generated by successful SMMEs such as Mars Technologies.
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