Arguably, any company with a growth plan needs to look at Africa as a potential business option, as it is one of the few places that are currently showing growth. Business in the region is however very different, says Rory Twort, the Area Manager for Africa at AxizWorkgroup. “The African business landscape is definitely more relationship-driven in addition to being extremely price-sensitive, and with more and more companies piling in, it is very competitive,” states Twort.
AxizWorkgroup, a leading IT infrastructure and software distributor, currently has branches in South Africa, Namibia, Botswana and Zambia. In addition, the company is presently negotiating further developments into Mozambique, Kenya and Angola. AxizWorkgroup is currently supplying Africa with hardware product brands such as Acer, HP, IBM, Samsung and Lenovo, as well as software brands the likes of Microsoft, VMware, Norton and Adobe.
“It is important to stay abreast of the legislative requirements of each country and also to understand the impact of foreign exchange fluctuations, which can impact profitability rapidly. From an AxizWorkgroup perspective, we ensure that our branches not only abide by legislation, but we also prefer to employ locals from each of the countries we operate in. Not only does this afford locals the opportunity to assist in the economic upliftment of their own country, but it also helps us to better understand and deal with local business issues,” explains Twort.
“It is however crucial to do your research and to have solid financial controls in place before embarking on an African business venture”, says Twort. “The money trail is certainly a great deal harder to track in Africa as you don’t have agencies and companies that can readily do a credit check on a prospective client. Business transactions can be very large, and companies often find that they will not be insured on a transaction for the full amount or not insured at all. It is therefore of paramount importance to have an airtight financial management system in place.”
Finding a balance between too rigid an approach to financial control systems and the building of a lasting relationship can be tricky though. “It literally boils down to having sufficient country knowledge on your side that needs to be supported by a strong ability to build lasting relationships and trust. People in Africa are generally great to deal with and the cultural experience is fantastic, but it takes time and presence in a country to gain enough of a foothold to comfortably partner with prospective clients,” says Twort.
The logistics of doing business in Africa is a complex dynamic that needs to be considered. “By definition, you will be dealing with custom officials and varying country regulations on a regular basis, which in itself poses an element of risk. Do you then deliver directly to the client or do the products become the property and responsibility of the client once it enters the country? All of these logistical factors need to be considered and planned for when it comes to the establishment of a distribution network that works,” suggests Twort.
Keeping cash flow liquid in Africa is another challenge to contend with. “Financial transactions are a great deal more complex in Africa, but very rewarding. Some countries are quite prompt with their payments whereas you can wait up to 90 days for payment from others, which diminishes your profits in the low-profit market quite significantly. We also find that the government and parastatals in each of the countries are big drivers of technological business,” explains Twort.
The infrastructure within Africa is steadily increasing with connectivity improving a great deal. Education standards, unfolding opportunities and the size of the economy in each of the countries act as a barometer to how Tech-savvy a country is. “All the countries are however growing with leaps and bounds from a technological point of view, which provides a perfect platform for AxizWorkgroup to expand its footprint on the African continent,” concludes Twort.
AxizWorkgroup is a leading IT infrastructure and software distributor that unites cutting-edge hardware and software. The company’s portfolio includes servers, storage, networking and communication infrastructure, desktop computers, notebooks, printers, PC components, virtualisation, security and infrastructure software. AxizWorkgroup has long-standing relationships with leading global vendors such as Adobe, Acer, Asus, Citrix, EMC, HP, IBM, Kingston, Intel, Logitech, Lenovo, Lexmark, LG, McAfee, Microsoft, Novell, Oracle, Samsung, Seagate, Symantec and VMware. AxizWorkgroup is a fully owned subsidiary of JSE listed Pinnacle Technology Holdings and is headquartered in Gauteng, with regional offices in the Eastern and Western Cape, Free State, KwaZulu-Natal, Botswana, Namibia and Zambia. (www.axiz.com)