According to the latest IDC research, the South African enterprise application software market will reach a value of US$410 million by 2018. That is a very small slice of the global software spending pie, which Gartner estimates at US$3.5 trillion in 2017, according to Jaco Roux, chief information officer at South African fintech company wiGroup.
To take advantage of the exponential growth opportunities offered by this digital age, South African innovators must look to a global market for growth and expansion. However, this pits them against some of the largest companies in history: five of the 10 most valuable companies on the latest Fortune 500 list is in the tech and software industries.
How does a South African software firm compete successfully against these large, well-funded, established players from the more developed economies? And what does it take to transform into a software business that can replicate the success it achieved in its home market on the global stage? I would argue there are five fundamental building blocks that are required for companies to succeed in the hyper-competitive software market:
Building Block 1: Continuous investment in innovation From day one, we have allocated a portion of our profits to innovation. Ten years later, the result of this continuous investment has been astounding: the platform we developed that enables any kind of mobile transaction at the point of purchase is present in more than 80,000 till lanes across South Africa. The mobile applications we have enabled for major brands has engaged the South African public and helped made our clients some of the most-loved and best-supported brands in the country.
In fact, some of our clients, including Discovery Vitality and Vida e Caffe, were listed among the most loved and easiest-to-use loyalty programmes in South Africa in the recent Truth Loyalty report. All the insights and experience we gain by working with some of these business categories are centralised and shared, meaning our customers gain access to a constantly-updated set of best practices that collectively makes us better at understanding consumers and delivering the types of technology experiences that are likely to increase brand digital engagement. None of this would be possible had we simply sit back and enjoy the fruits of our initial innovation.
Building Block 2: Productising your technology Companies today need speed and agility to survive. The rate of change is staggering, and it’s increasing exponentially. Between 12,000 BC and 2003, humankind generated a number of exabytes of data; in 2017, we generate that much every two days. To keep up with this rate of change, businesses are relying on technology to shorten the innovation timeline, speed up decision-making, and unlock new business opportunities in real-time.
For us, with a history mainly as a platform provider with a custom development ability, we looked at what we excelled at, what learnings we could take from our experience to date, and how we could make our best-performing components modular. This means that we have productised our core offerings into focussed streams of innovation and created micro services as building blocks to be used when developing client solutions.
We also templatised a number of the user journeys by understanding the data of how people were adopting and using our clients’ apps. We created our own React Native framework (wiReact) for rapid solution development across the different mobile platforms, with a continues build environment and automated testing. This gave us a single source code base for development and maintenance of iOS and Android applications, freeing us up to focus on innovation and design instead of assigning critical resources to develop bespoke Android/iOS versions.
Initially we used InVision and Flinto, to put a working (albeit scaled-down) version of a client app in their hands within weeks of brief. Now we use our wiReact framework to put a real application in the client’s hand within the first week. And now that we have embarked on an ambitious global expansion, we’ve developed open APIs that developers around the world can use to create market-leading apps and software solutions that are tailor-made for the industries in which we specialise. Our mobile loyalty and rewards software include payment functionality to bring the world closer to a cashless future built on consumer convenience. We believe this focus on simplifying and improving the way the world transacts is key to what makes us successful. Which brings me to the next important building block:
Building Block 3: Solid commercial understanding The rate of technological change has another consequence: companies are increasingly turning to their core business focus to better navigate the complexity in their day-to-day business environment. This means not only is the tech outsourced, but also often the understanding of how to make that piece of tech come alive in their business to deliver the optimal ROI.
That’s led to the development of sector-specific off-the-shelf products and solutions that solve actual challenges within their business and remove the need for costly and time-consuming self-made mistakes. This same commercial understanding also provides companies with a top-level view of how a specific solution fits into the broader business: for example, how a loyalty app for the marketing department can affect top line revenue through segmentation and basket value. This level of insight and sector expertise requires a strong talent base, which in a skills-scarce country such as South Africa is not always easy.
Building Block 4: A global talent base It’s no secret that technology skills are scarce. This is equally true for developing countries such as South Africa and the more developed economies of France, the United Kingdom (UK) and the Netherlands. A research paper by South Africa’s Department of Higher Education and Training found that only 50,000 matriculants pass maths with a score higher than 50 per cent. Even more telling, the same report found that nearly 12 million people in our labour force lack a matric certificate. Since the pace of doing business means we need to have access to skills now or possibly lose out to big cheque competitors, we launched a range of skills training and graduate initiatives.
These include a joint initiative with CiTi and Wesgro to upskill youth from previously disadvantaged areas to become programmers, a graduate recruitment drive in partnership with local universities, and a scholarship program with the prestigious Hilton College. A global company also needs global talent. Instead of simply outsourcing work to one of the leading outsourcing countries, such as India, we decided to rather build our own global team. In the island nation of Mauritius, we found a skilled workforce that shares our enthusiasm for technology’s potential for improving the way the world works. We launched a graduate programme and developed a set of tests that could ensure we not only hire on skill, but on values, we attract and develop staff without getting into a salary war. How?
Building Block 5: A shared grand vision wiGroup was founded with the vision of simplifying and improving the way the world transacts. Whether we are developing a platform that enables mobile transacting at the retail point-of-sale, or developing loyalty and rewards SaaS products, this vision guides and inspires us in everything we do. The sense of higher purpose this vision brings to our day-to-day work to life and creates a constant drive for innovation and excellence. It has enabled us to create a remarkable business full of remarkable people. And as we take this business to a global market, it will be our people – more than our technology – that will determine our success.