No forced retrenchments as BCX consolidates
IT services company BCX is looking to consolidate its multiple subsidiaries, and the company hopes this will not result in forced retrenchments.
In an exclusive interview with ITWeb, Ian Russell, CEO of BCX, said since his appointment in May last year, the focus has been to "become one business, not a company that has different pockets of businesses".
BCX, formerly Business Connexion, has taken a different business approach since it was acquired by telecommunications giant Telkom in 2015 in a R2.67 billion deal. The acquisition saw co-founder, Isaac Mophatlane, leaving the company in 2017. He was replaced by Russell, who was then group chief transition officer.
Upon his appointment, Russell said the company had 34 separate subsidiaries. Some of the most prominent units are Intergr8, UCS, App Zone, Net Campus and Anco.
"So this time next year, the company will have two or three subsidiaries. We are looking at bringing things together so we have great economies of skill and scale," Russell said.
"The journey we are at the moment is how then do we take the old Telkom Business portfolio, which is mostly about telephone calls, data and connectivity; and the old Business Connexion portfolio, which is about managing outsourced services, to become a truly end-to-end technology partner for big business."
'Economies of skill'
He pointed out the big focus at the moment is bringing the organisation together in a way that "we will have one team that does our finances, one team that does our selling, one team that does our HR, one team that does the infrastructure, and so on. In that way, we will become a single BCX whereas before we were made up of multiple parts."
Russell believes that will allow the IT services company to have economies of skill. "For example, if you look at our software engineering business, we have over 2 000 software engineers - that's a huge number, nobody else locally has such a number. However, we used to have them in five or six different places. Now I will have all of them in one place."
However, he noted, as the company consolidates, there will be no job losses. "We are hoping that BCX is on a clear growth path. If we look at our interim results, we don't foresee any forced retrenchments required in the business. The trick is rather to deepen the capabilities that we have and to sell more."
When Telkom acquired BCX, the company had about 8 000 employees.
In its interim results last year, BCX's parent Telkom said BCX was looking to sell "certain assets" as part of a business re-organisation, after tough trading conditions saw revenue fall over the past six months.
Russell admitted the trading environment is tough and revenue is under pressure. "Part of what we have been doing is to make sure we own the businesses that we are really good at.
"We had a few non-core businesses that were not necessarily part of our technology company. For example, we had a small payroll business called Accsys which manages small businesses' payroll solutions. But we are not a payroll business; we are a technology business. So we sold that business before Christmas. However, it's not a fire sale - there are a few non-core businesses that we just see as better fitting somebody else's portfolio than ours."
Nonetheless, he said, BCX still has some old products which it is still selling successfully but it is looking at the next generation of technologies to generate more revenue.
According to Russell, BCX is looking at investing in new businesses. The company is developing a new cyber security unit in conjunction with Deloitte and it will be up and running in April.
"Cyber security is a massive issue for all businesses and all individuals. We already do some business in cyber security but we are looking at expanding it. We anticipate the business to grow organically in partnership with Deloitte."
Data science and analytics is also another focus area for BCX, Russell said. "We are building a completely new business unit focusing on that. We've just founded a new data science academy in Cape Town called Explore and the first batch of students enrolled in January. BCX is fully funding 100 students in a data science course. We are doing this because those skills are so scarce and rare but our economy needs those skills."
BCX also sees coding as another area where is it looking to expand. "The way that we develop apps and code solutions is a big growth area for us," Russell noted. "We are sponsoring the WeThinkCode initiative and we are looking to expand the pool of talent of coders, as we see coding as the 12th language of South Africa."
The other area the company is exploring is the industrial Internet of things, said Russell. "People talk about the Internet of things but we talk about the industrial Internet of things - that means the devices and sensors that you may put on a farm or in a factory in order to run the business more efficiently."