With the weak Rand and interest rate hikes, most industries are affected – and ICT is no exception. But, the economic situation provides the opportunity to look at business processes and find ways to better service customers, writes GERHARD MALAN, Financial Director at Rectron.
South Africa is in for a tough few years, if economists are to be believed. Our economy, weak Rand and recent interest rate hike are affecting industries across the board – and ICT and ICT distribution are no exception. However, our economic situation also provides the opportunity for us to relook our business processes and find ways to better service our customers.
Weak Rand results in expensive technology
A snapshot of the ICT industry in South Africa currently shows that because the majority of products are imported, the weak Rand has made technology more expensive. Since the start of the accelerated depreciation of the Rand, resellers have reported that bigger capital outlays are being delayed for fear that the currency will further weaken. And while the demand for high end equipment is still there, it has decreased to give way to a larger demand for more affordable entry- to mid-level equipment.
This trend isn’t exclusive to South Africa. Although most developed countries have not had to deal with rising interest rates, they have been dealing with a relatively flat economy, making distribution more competitive across the board. Every business trading its home currency against the US Dollar has had to relook its approach to manage its foreign exchange risk.
That said, local vendors are doing what they can to keep their pricing as stable as possible, while foreign vendors are introducing some great initiatives to help protect us against our weakening currency.
An opportunity to rethink how we do business
Simultaneously, while everyone is experiencing the squeeze, it’s a great time for the ICT industry to correct our inefficiencies and cut unnecessary expenses. When the economy is strong, it’s easy to overlook these things, but now’s the time to place the emphasis on return on investment – every expense should be able to have a measureable return. It’s also an optimal time to outperform competitors who might be missing out on the change in how the market is spending.
Of course, beyond these benefits, there is a very real need for businesses within the ICT industry to maintain cash flow. Keeping tight control over budgeted expenses and working capital should put a stop to overspending and uneconomical activities. At the same time, proper risk management when it comes to security, debtors, inventory, cash and insurance is vital. Businesses that are prudent in spend and organised in chaos will come out much stronger and grow much faster when the market turns.
Finding solutions for the customer
From the customer’s perspective, there are also ways to help mitigate risk and reduce capital outlay when the economy is weak. Resellers need to be assisting their customers to continue operating in difficult conditions by offering better advice and products that reduce their expenses or even increase their income. A product such as Rectron Finance does this by freeing up cash so that there are funds available for crucial expenses like rent, salaries, marketing and other important overheads, while ensuring the customer’s business still has access to top end technology.
It’s clear that this is a model that’s working for many businesses, with the uptake of this service on the rise. Since the beginning of 2016 we have seen a trend towards deals being processed through rentals and asset finance rather than normal cash purchases. It’s an opportunity to opt for a manageable monthly expenditure over three to four years, as opposed to a significant once-off outflow of funds at the time of purchase.
What is important for resellers encouraging customers to adopt this model is to start the conversation early. This way, approval is sped up and the customer understands that a big capital outlay isn’t required. There’s also a need to educate on the difference between a rental and an asset finance deal, depending on the customer’s needs.
Beyond these options, several ICT product solutions are also aimed at helping resellers and their customers manage their businesses in the current economic climate. For example, Microsoft’s Office 365 offering gives customers the flexibility on yearly subscriptions, which reduces cash flow. The Samsung LFD range assisted by Intel’s technology also allows resellers to build up different income streams like content management and monthly subscription services, which increases their profitability. From Rectron’s perspective, our online ordering system and our AskRectron app assist customers to reduce their time spent on admin, freeing up time to focus on their business.
ICT plays an important role in national development
These solutions link to the idea that connectivity and the use of technology to access information has an important role to play. It is the key to drive down the country’s unemployment levels through job and entrepreneur creation, as well as by stimulating skills development. In addition, our industry is vital in assisting the government in fulfilling its National Development Plan.
With that in mind, ICT is no longer a luxury but a necessity. That means that despite the challenges facing the ICT industry in light of the state of the economy, it’s never been more important to find new ways to keep technology accessible. There’s little doubt that we are in for a rough ride, but by thinking carefully about how we do business, we are in prime position to weather the storm and make it to the other side.
South Africans are searching in the dark, according to the latest Google Search trends.
With more 1 million search queries generated in the space of 76 hours, load-shedding was by far the top trending search on Google South Africa this week.
Valentine’s Day came a distant second.
After news emerged last Sunday of the impending stage 3 load shedding, South Africans had generated more than 1-million load-shedding search queries by the time Tuesday came around:
- “Loadshedding schedule” – generated more than 100k searches on Sunday
- “Load shedding schedule” – generated more than 100k searches on Sunday
- “Eskom load shedding” – generated more than 100k searches on Sunday
- “Load shedding Cape Town” – generated more than 50k searches on Sunday
- “Load shedding schedule” – generated more than 400k on Monday
- “Load shedding Johannesburg” – generated more than 20k searches on Monday
- “Load shedding schedule” – generated more than 200k search queries on Tuesday
Leading up to Valentine’s Day, South Africans generated close to 300k search queries related to the romantic festival, including searches for quotes and gift ideas:
- “Valentines Day” generated more than 100k search queries on Thursday
- “Happy Valentines Day Images” and “Valentines Day Images” generated more than 10k search queries each on Thursday, with “Happy Valentines Day 2019” generating more than 20k search queries on Wednesday
- “Valentines Day Specials 2019” generated more than 5k search queries on Thursday
- “Love quotes” generated more than 5k search queries on Thursday
- “Valentines Day quotes” generated more than 100k search queries and “Valentine messages” generated more than 50 000 search queries on Wednesday
Search trends information is gleaned from data collated by Google based on what South Africans have been searching for and asking Google. Google processes more than 40 000 search queries every second. This translates to more than a billion searches per day and 1.2 trillion searches per year worldwide. Live Google search trends data is available at https://www.google.co.za/trends/hottrends#pn=p40
Thanks to the growing popularity of video-on-demand services, there’s a new opportunity to help kickstart the careers of local filmmakers.
Numerous Hollywood blockbusters (District 9, Tomb Raider 2018, and The Avengers: Age of Ultron to name a few) have featured substantial shoots in Johannesburg and Cape Town. While providing great opportunities for SA’s production talent, aspiring writers and directors don’t get the same benefit.
So where can local creatives showcase their work? Broadcast TV isn’t a natural home for unknown short films, and while self-publishing platforms are readily available hosting options, it’s tough to get noticed and get traffic when competing with videos from across the planet.
But with the emergence of video-on-demand services into the mainstream, there’s now a solution. The African film school AFDA has teamed up with the streaming service Showmax to give local talent a much larger platform than ever before. From 18 February, eighteen of the best recent short films made by AFDA students from their Johannesburg, Cape Town, Durban and Port Elizabeth campuses will be live on Showmax. Drama, documentary, fantasy, and animation are all represented, in pieces running from under eight minutes to almost half-an-hour long. The full list of movies is included below.
Teresa Passchier, CEO of AFDA, said: “AFDA, Africa’s number-one school for the Creative Economy, is proud to kickstart this exciting and meaningful journey with Showmax and AFDA students, ensuring emerging young African filmmakers’ voices are heard and given a platform. It’s ground-breaking to share young, local, culturally relevant content on the same platform as Hollywood blockbusters. I am certain that this unique initiative will serve to boost and develop the African film industry and the careers of many young South African and African students alike.”
Included in the short films coming to Showmax are the award winners Junior and O-Puncha. Junior, directed by Bert Dijkstra, picked up the Audience Award in the Made in South Africa Competition at the shnit Worldwide Shortfilmfestival Awards 2017. O-Puncha, directed by Adam Hansen, won two awards at the 5th annual Eldorado Film Festival: Best Student Made Short, and Best Editing – Alexander La Cock.
Another celebrated film is Sicela Amanzi directed by Mlu Godola, which talks to the subject of water shortage. The film’s heroine Zoleka is a mild-mannered young woman forced to go to extreme lengths when a small community’s only source of water unexpectedly collapses. The power of films like this is they shine a light on critical topical issues in new ways.
Speaking about working with the film school, Candice Fangueiro, Head of Content for Showmax, said: “There’s
AFDA is an Academy Award-winning institution, founded in 1994, and the first and only African film school to win an Oscar – for the Best Foreign Student film in 2006, the postgraduate film Elalini, directed by Tristan Holmes.
The full list of AFDA short films coming to Showmax is as follows:
|Lullaby from the Crypt||Keenan Lott & Raven Davids||Animation|
|Ko Ga Cherenyane||Sibonokuhle Myataza||Documentary|
|Mallemeule||Jaco Van Bosch||Drama|
|Canal Street||Brodie Muirhead||Drama|
|On the Fence||Warrick Bews||Drama|
|The Righteous Few||Lindo Langa||Drama|
|Hlogoma Peak||Luke Ahrens||Drama|
|Frozen Flame||Cameron Heathman||Animation|
|Wolf||Brett van Dort||Fantasy|
|The Walk Home||Sisanda Dyantyi||Drama|
|Doreen||Luvuyo Equiano Nyawose||Drama|
|Sicela Amanzi||Mlu Godola||Drama|