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Do digital business right and the gains are significant

By Ansie Vicente, online content marketing editor
Johannesburg, 16 Sept 2016
Mohamed Cassoojee, Vice President and Country Manager for Software AG South Africa, believes that if you do digital business right, the gains are significant.
Mohamed Cassoojee, Vice President and Country Manager for Software AG South Africa, believes that if you do digital business right, the gains are significant.

Companies that know their customers well enough to ask them what they want, and partner widely to build agility, will connect the dots and thrive in the current technological, economic and political flux.

This was the overarching message of speakers at Software AG's Digital Business Day, on Thursday, to over 200 attendees from across the public and private sectors.

Mohamed Cassoojee, VP and country manager for Software AG South Africa, said: "If you do digital business right, the gains are significant." He said that traditionally, businesses expected growth of between 3% and 4%, and considered 20% an exceptional growth rate. "But analysts are predicting that digital businesses will grow by 3 000%." Organisations cannot afford to ignore digital, he said.

Most companies have many points to connect in the process of creating a digital business, he noted, and this is only possible with platforms that allow for systems and processes to be changed on the fly. "Your platform must be modular, flexible, fast and differentiated to include CRM, e-procurement, big data and the like," Cassoojee said.

Mike Slater, COO EMEA North and board member of Software AG, pointed out the South African subsidiary of the German IT giant had been the top global business within Software AG in 2015, and at the beginning of 2016, despite the political and economic challenges South Africa faced. "This was achieved because our most innovative ideas come from the talents and skills based in South Africa. The digital skills in South Africa are the best you can get in the world," Slater said.

Keynote speaker Pavlo Phitidis shared case studies of start-ups that have addressed traditional industries to create digital businesses. Each company found ways to overcome traditional challenges through digital means. One start-up has changed the way the Greek honey industry works by developing a connected beehive that helps rural farmers to position the hives for optimal honey production, by communicating with the farmers over the fairly old cellular technology of USSD. In some cases, honey yield is increased by up to 35%. In the process, the start-up gathered details of each farmer (name, age, location, what type of phone they had), even though they may not have ever met them, and was able to connect neighbouring farmers to each other. As a result, the company was able to bring down the price of honey packaging materials through grouping farmers in co-ops, again improving the income of honey farmers.

Phitidis identified three things that determined the value of entrepreneurial businesses: forecast period (how long the business is expected to last); free cash flow (how much money can be taken out of the business without affecting its operations, such as dividends); and risk rate (how risky the future of the business is). "To deliver value to their founders, entrepreneurial businesses have to increase their forecast period, thicken the seam of cash flow and reduce risk to maximise the selling price of the business," he said.

"If you don't know who your customer is and become absolutely expert at serving that customer, it is very, very hard to win in the economy today, irrespective of which industry you are in," he said.

Patrick Shields, CTO of Software AG South Africa, agreed that no industry is immune to change. He defined a company's digital business journey as "the path you select from today on, in order to navigate change".

He said most companies are simply trying to keep the lights on. "That is one of the biggest enemies to responding to change." He explained that although change was a constant, the local business environment had been particularly challenging and that more change was to be expected. A local example is the 2019 general elections, which analysts predict could result in a shift in political power. "When governments change, it affects business - politically motivated change could create opportunities or problems for local businesses."

He challenged attendees to look at their own organisations and determine how they could insulate against problems and capitalise on opportunities.

View a gallery of the day here.

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