International companies face more challenges than ever – particularly when looking to expand into the burgeoning markets of Africa.
“The sub-Saharan African market is experiencing a period of rapid growth, with two of its fastest-growing markets being South Africa and Nigeria,” explains Mark McCallum, Country Manager, South Africa, Orange Business Services.
Consumer culture is also accelerating rapidly throughout Africa, as over the last two decades Africa’s trade with emerging markets has grown at the expense of its trade with more developed partners. Among countries in Sub-Saharan Africa, South Africa has the best “connectivity.” The country ranks 16th (1st in Africa) on the Agility Emerging Markets Logistics Index, (2016). Nigeria ranks 17th on the index (2nd in Africa), climbing 10 spots in the 2016 Index.
Africa is home to more than one billion people, presenting a massive potential consumer market. Moreover, population growth remains rapid, and the United Nations (UN) Population Division forecasts that the continent’s population will surpass the 1.5 billion mark by 2026 and the two billion mark 15 years later.
New territories, new challenges
“Expanding into Africa means addressing different challenges than those enterprises may be used to in their home markets. Bureaucracy, regulations, licenses, availability of skilled workers at local level and other issues regularly create barriers to getting up and running swiftly. In Africa the market is open for first movers who can navigate risk and nurture African talent. The opportunity is for those seeking to build long-term, sustainable businesses that bring world-class practices and adapt to local conditions,” says MaCallum.
Technology can be the enabler
“Expanding into new and unfamiliar territories is a complex enough undertaking without worrying about your communications and IT infrastructure and systems.” Since many nations throughout Africa are still relatively immature technologically, enterprises need to know that their ICT can be relied upon to support their business, no matter what the industry.
Eighty-one percent of companies consider technological progress the main factor of change for the next 5 years, while 50 percent of the world’s leading manufacturing companies invest in IT applications and infrastructure to help them be more flexible and agile. Compare this with just 20 percent of their non-leading competitors and the difference is clear. “So it is to technology that enterprises must turn to help them overcome the challenges of expanding in new markets,” he explains.
Take local practices and apply them globally
McCallum touches on the several key technologies that can help MNCs get new operations in Sub Saharan Africa up and running smoothly.
- Cloud computing. Businesses in the sub Saharan Africa region today are looking to capitalise on the transition from traditional environments to cloud-based network architecture environments, introducing a range of capabilities including enhanced control, security and improved quality of experience. Cloud is the core enabler to today’s agile, flexible business, bridging boundaries and making workforces more mobile and productive no matter where they may be. For organisations expanding globally, cloud brings the key benefits of not actually needing local resources and its scalable nature means organisations can ramp operations up or down as quickly as the new location needs.
- Unified Communications as a Service (UCaaS) and Skype for Business. The mobile workforce needs the right tools to help it get the job done as effectively and efficiently as possible, and UCaaS gives them access to the same corporate tools and apps as their colleagues anywhere in the world.
- A secure VPN. Reliable operations and an ability to expand new locations quickly and smoothly can be assisted by a virtual private network (VPN) that supports all the required IP services like IP telephony, video, cloud, IPv5 migration and enables access to core business tools like Salesforce.
- Accelerated Internet. Social media boom and access to cheaper smartphones has fuelled Internet usage in sub-Saharan Africa. Increasingly, enterprises are procuring their applications from the public cloud and thus rely upon Internet connectivity. However, the further the user is from the data centre hosting their key apps, the more likely the user experience will suffer. An optimized Internet connection can reduce the number of hops the user data takes, thereby improving the overall experience and quality for service. It will allow users in emerging markets to have the same experience as their colleagues in other parts of the word.
- Mobile working. Remote and mobile working are major elements of doing business in sub-Saharan Africa, where geographical disparity remains a factor and mobile proliferation continues apace. Mobile data traffic continues to grow, driven both by increased smartphone subscriptions and a continued increase in average data subscriptions. Sub-Saharan Africa is the region with the highest growth rate in mobile subscriptions globally. Mobile subscription penetration (percent of population) is at 82%, and this figure is expected to reach 100% by 2021 and 105% by 2022, with over 1 billion mobile subscriptions in the region, according to the Erricson 2016 Global Mobility report.
Sub-Saharan Africa’s end-users continue to set the pace when it comes to mobile habits, as evidenced by the recent ‘mobile first’ trend, and the practice extends to the workplace. Organisations will need more than attractive salaries to recruit the best staff; they also need to offer a mobile-centric work style, which complements their mobile-centric lifestyle.
Hit the ground running
The most important aspect to successful global expansion is getting new, local operations up and running as quickly, efficiently and smoothly as possible. Thanks to technology, it has never been easier to set up regional offices and manage the many various barriers that come with each new territory.
“To achieve this, choose a technology partner that understands local challenges and with real experience of overcoming them. Organisations must take a global-local approach and establish a consistent global strategy that can be executed in any location. The quicker you get set up, the quicker you can begin reaping the rewards,” McCallum concludes.