Africa is known to leapfrog technology largely because of the mobile phone revolution. The continent is the second largest mobile technology market, a fact that has attracted global tech giants. Internet adoption is growing and new technology businesses championed by entrepreneurs have sprung up.
Ironically, studies now show that African companies are lagging behind in technology adoption. A recent IBM survey shows that failure to adopt technology is preventing many African businesses from achieving growth and progress.
Lorenzo Boncompagni, a director at Electronics Technology Group (ETG), a company that builds business-to-business (B2B) applications, says technology can help companies operate efficiently, improve controls and increase revenues.
ETG builds a wide range of B2B applications targeted at businesses in different sectors such as transport, retail services, financial institutions and manufacturing.
“We try to focus on the issues they have and find solutions. The approach is very custom made to fit their needs. That is actually the most difficult task because the issues here are quiet huge compared, for example, to Europe or the Asian markets because there is no electricity in some places or there is no internet. It’s very challenging and that is why mobile phones are very popular here because they can bypass some of those steps.”
To counter some of these challenges, ETG builds apps that can work on the web but also offline on mobile phones.
ETG’s solutions sell for a minimum of KSh. 500,000 (US$5,800) up to KSh. 50m ($580,100) “depending on the complexity”.
“It is not only the apps, it is going into a company and fixing everything. The issue here in Kenya and almost in most parts of Africa is that companies have nice systems but they are small systems that don’t talk to each other. For example, a company may have a tracking system that does not talk to the HR system which also does not talk to the accounting system. So you might have a big company with 20 different systems and they have paid quite a lot of money but they are not linked.”
Despite the benefits, Boncompagni says convincing companies to adopt such technologies is not an easy task and can take several months.
“Relatively speaking, building this technology is easy for us who are techies. The problem is going to companies and changing the way they operate.
“Who is in power in these companies sometimes is old-fashioned, sorry to say so, and they are scared of losing control. Leadership has to change in certain areas especially in domains like government,” he says. “It is the new generation who will adopt new technologies and we have seen this happen dramatically in the last few years.”
Even after purchase, getting companies to actually use the technology is also a challenge.
“The system can be beautiful but if you don’t use it, there is no point. In a way that is actually one of the main challenges we are facing. So projects get to a halt sometimes… but after they start using [the technology], then they find it very nice.”
While there are various companies in the region building apps, Boncompagni says the approach taken by many is wrong.
“The apps people are trying to do in this country are the wrong apps. Not that I want to be pretentious but [companies here] mainly promote consumer apps. You have to have a really good idea. A consumer app has to be very generic and to get the right idea takes quite a bit of time. The other problem is no one likes to pay for apps in this country. So I don’t think there are any consumer apps made here that are being used [widely]. There are now good systems like [online deal site] Rupu that is nice… and more appropriate.”
Moving to Africa
Originally from Europe, Boncompagni moved to Kenya in 2008 at the onset of the global financial crisis that crippled many European economies.
“It was very difficult to get work especially for small companies. Europe is more focused on big corporates and the cost of doing business was very high compared to doing it here.”
In 2009, Boncompagni formed Recogink Africa, a technology consultancy firm which merged with ETG in 2012.
“I never found it difficult to get business in Kenya,” he says. “For a person like me who tries to always be innovative, Kenya has a lot more space because the issues are so many [and] everywhere you go you know there is a gap.”
According to Boncompagni, owners of small and medium enterprises should not fear forming partnerships with other firms because joint ventures can create win-win outcomes.
“What I found very important was to acquire a network that I did not have personally. I had my own customers, but I know that without my partner there are customers we would not have been able to work with. For me connections at high level are really very important because for this kind of business you normally meet the CEO or the financial director since we influence very much the entire business of the company. So, if you don’t have these kinds of connections, it is quite difficult to get the business.”
Boncompagni advises other entrepreneurs be strong willed and persistent.
“You have to be very strong in this market. You can spend a whole year dong analysis to try and understand your client without getting a penny. This happened to me quiet often. Later the deals would come back to me because of the advice I had given them on how to solve their problems. It takes quite a long time, at least in our domain, to get the business.”
Boncompagni explains that Kenya’s technology industry holds a lot of potential partly because of the talent and enthusiasm among the youth.
“The young people here are very good. I normally hire people straight from university. At the beginning I used to train them a lot. Now whoever I have trained trains the others. There is no shortage of talent among the young people.”
Expanding into West Africa
ETG plans to become one of the biggest IT software companies in the region. As its clients expand across the region, the firm is taking the opportunity to introduce its software in other countries.
“The other countries are a bit more problematic in terms of technology adoption. They tend to adopt a little late after Kenya… yet our industry moves very fast,” Boncompagni says. “I have to be realistic. We will sell in Uganda and Tanzaniabut we will go through other companies that are here and are expanding.”
In the meantime, ETG is seeking to expand into West Africa and plans to open an office in Ghana soon.
“The market [in Ghana] is quite similar to Kenya’s and the growth is quite big. We think it is the right market. They don’t have issues you may face in other countries like political instability and they have money because they have a lot of petrol and gas. We want to use Ghana to expand across West Africa.”–Howwemadeitinafrica