BEE deal gives BCX first mover advantage?
- 03 May, 2004 19:26
Peter Watt, former CEO of Comparex Pty. Ltd., says that his company's recent BEE deal with the company previously called Business Connexion gives it first mover advantage in this space, and that it will be taking advantage of this for the next few years whilst its peers play catch up.
"This is why we wanted a partner that was already in the industry, he says, "So that we would not have to spend time teaching it about the market.
Watt says the deal is a key market differentiator for the company, and that Business Connexion's Microsoft competency (now integrated into the company's Business Applications division) adds an extra dimension to the company's offerings, and opens up new business opportunities for it.
Watt says that the staff and business of the previous Business Connexion have been seamlessly integrated into the merged entity, now also known as Business Connexion (BCX). "We have undergone a process to ensure that the merger happened as smoothly as possible, he says.
This process included an initiative called 'Project Connect' which was designed to ensure that Comparex was able to bring the new people into the organisation physically -- in that there would be desks and such -- to ensure that they would be paid on time, and also feel comfortable and that they had not been forgotten in all the events taking place, Watt, who has been appointed as CEO of the new company, expands. The company has also designed an integration package, from board level down, in a bid to integrate the two corporate cultures throughout the organisation.
On the rationale behind the deal, Watt says that: "In the broadest sense one has to look at an empowerment exercise in terms of a marketing function. The greatest spenders on ICT in the future, locally and worldwide, will be governments. This has been borne out by, as an example, the biometric security systems being put in place by the U.S. to monitor everyone coming into and going out of the country. The U.S. will ensure that this also happens in other countries, which will create a huge requirement and demand.
"We have always seen empowerment as a ticket to the game, rather than something that will see business pour in. The banks, for example, find it difficult to empower via equity deals, but can do so via procurement from providers like ourselves. We in turn can pull SMMEs into the organisation when we do big contracts, and mentor them. Since the deal with Business Connexion we have done a three-year, R25 million (US$3.5 million) desktop support deal with Standard Bank, for example. We have also sold R42 million worth of equipment into the Reserve Bank, he adds.
"Our business is now 70 percent annuity/services-based," Watt notes. "Most of these are long-term contracts, and, once other contracts like these come up for renewal, I believe that we will begin to reap the benefits of the deal.
From Business Connexion's perspective, Benjamin Mophatlane, the former CEO, and now deputy CEO of BCX, says that the company had no intention of leaving the ICT industry, and that it wanted to partner with a healthy business.
"We had done well in terms of our delivery and skills and offerings, he says, "And did not want to go into a business that was bleeding and that would take us with it. Realistically speaking, someone was going to partner with Comparex sooner or later, so we decided that it should be us.
On the brand change, which was officially launched last Wednesday, Mophatlane says, "The brand is credible in the ICT industry, has commercial viability and is synonymous with empowerment.