|Issue:||Africa and the Middle East II 2002|
|Topic:||Information Technology Vendors – A Key to Sustainable Telecom Development|
|Author:||Desi Lopez Fafie|
|Title:||Managing Director, Africa Operations|
The telecommunications industry in Africa is going through dramatic changes of ownership, technology and delivery of services. There are issues of privatisation, awarding of new network licences, skills availability, regulation and service delivery. The transformation can only succeed in delivering ubiquitous service and return on investment without delay, by using IT in support of these goals. Certain principles must be adhered to, though, to ensure that information technology will support, not disrupt, delivery of services to Africa’s people.
Suppliers of information technology (IT) to African telecommunications (telecom) organisations are faced with a unique set of challenges which apply to fixed line operators and mobile technology. Privatisation, the introduction of multiple network operators in traditionally monopolistic countries, the explosion of mobile telecoms – all of these, in their own way, have demanded a new way of working from suppliers of IT. The development of telecommunications outside Africa has been characterised by the success of the “supply creates demand” phenomenon. As telecoms technology developed, entrepreneurs took the risk of creating telecoms services, anticipating that the customers would come. And come they did. This is IT heaven for vendors. Available IT technology was matched with available telecoms technology, and the result was a service that attracted consumers. There was no pressure to meet an existing demand, no sense of urgency to hurry development and perhaps deliver products which may or may not have been quite ready for release. Telecoms development in Africa, however, has made greater demands on everyone. After decades of state-owned telecommunications struggling to provide the necessary infrastructure to service its citizens, governments looked to the private sector to invest in fixed line and mobile networks. Despite having successfully established similar systems in other countries, Africa’s need was so great, demand so clamorous, that telecoms development was not an evolution, but a dramatic change which placed enormous pressure on IT suppliers. On the one hand there was the need to fulfil the existing demand, and on the other there was the duty of IT vendors to consider the future needs of its clients, and ensure that a current investment would still deliver a return when new services were introduced in the future. Today, bandwidth will dictate the consumer services, and those consumer services in turn will dictate the IT requirements. Africa has been quick to recognise the potential of telecommunications, especially that of mobile to overcome the infrastructure inadequacies of fixed line networks. The demand for new services, therefore, already exists where the services do not. Distance education, healthcare, public services, agriculture and industry – all these activities essential for building an economy can benefit from advanced technology. On the telecommunications side there have been major advancements in standardisation and provision of coverage, which promises future lowering costs. The pressure is now on IT to work frantically to create a similar set of standards and protocols. Demand in Africa has swept aside the cosy relationship IT and telecoms enjoyed in the days of “supply drives demand” and pressure is now being brought to bear on the IT community to give universal access to services irrespective of handsets, transaction protocols and operating platforms. While each country possesses its own dynamic in transformation, there are constant common elements which IT suppliers must internalise and to which they must adapt their service and product delivery. If they do so, they will be able to respond quickly to infrastructure needs, and to become long-term partners supplying IT solutions that deliver a return on investment, irrespective of technology advancements and new services. With telecoms in Africa developing at its almost alarming rate, telecoms organisations must be sure that IT vendors are able to take hold of these elements and deliver solutions to the constant needs or their ability to sustain a long-term relationship with their IT suppliers will be questionable. So what are these elements? The first one is change; in the case of Africa, it’s light-speed change. What has taken two years in Africa took 10 years in Europe. When change takes place at this speed, there is no room for pioneering software. Privatisation, for example, makes heavy demands on financials, reporting, forecasting and enterprise resource planning. The IT systems underpinning change such as this must be proven and the business must be able to accept the data outcomes with confidence that they are accurate, complete, and delivered on time. Of course there is always the need for specialisation in certain areas of the business, which may demand a bespoke or niche software system that can perform a specific, specialised function. Mature IT, however, should allow for, and integrate with, such systems with the least fuss. It should also be borne in mind that bespoke, or custom-built software systems are skills-intensive, not only in their development and implementation, but also in their maintenance. The biggest cost, however, emerges when technology is upgraded or new systems introduced, and the bespoke system has to be changed in order to integrate with the new arrivals. In the telecoms business this scenario is inevitable. This situation can snowball, and what may have started out as an ideal solution may end up as a cumbersome system which may be indispensable, but is difficult to manage and expensive to maintain. This high-speed rate of change also means that telecommunications and IT are converging as quickly in anticipation of delivering more services to more consumers. When this occurs there is inevitable integration of business systems – for example, cellphone banking will mean the need for instant account balance enquiries and non-repudiation facilities – and the easier that integration process the better. This applies also across networks – cross-billing in some countries has caused major difficulties because of the tendency among competing network operators to use different software vendors. A final word on change – telecommunications, and mobile telecommunications in particular, are still reaching for common standards. With the situation still fluid, it is far safer to opt for a company that has the research and development capability to produce a system that will be compliant in the shortest possible time. Not all software companies can do this. The second element is local skills. This rule applies not only to telecoms, but also to any sector that provides infrastructure to sustain the economy of a country. The need for local skills is high on the agenda of the NEPAD committee, and was expressed at a recent Oracle Partner conference in Dakar, Senegal, by Mr Cherif Salif Sy, Advisor to the Senegalese President’s NEPAD steering committee. He said, and I quote: ‘We already have proof that countries that are better organised around this notion of knowledge and skills are countries that are best placed to compete globally. It is a central factor to the development of some, and to the marginalisation of others.’ The cost of telecoms can be reduced significantly with a greater preponderance of local skills. Lack of skills transfer threatens the sustainability of many initiatives. Foreign skills are expensive, which in turn contribute to a heavy price tag on telecommunications services to business and private consumers. By the same token, IT vendors that transfer skills to their customers generally have a closer, more prosperous relationship with them. Besides, skills-intensive software solutions don’t always carry significant margins with them, so it’s often in the vendor’s interest to teach his customer skills to look after his own IT system. Vendors, therefore, should build the cost of skills transfer into their product. The third element, local partners, is related to the second. It makes sense for IT solutions to be delivered in-country by partners. Apart from the usual benefits such as geographical proximity, relationship-building and responsiveness; partners are vital in telecommunications in particular, as they have the potential to become an outsourcing partner of their client. Ask telecoms and IT converge, and as new products and greater value is added to services to consumers, the demand for more skills will rise, and with it the cost of these skills, especially if they have to be imported. Despite the clear convergence of IT and telecoms, the core business of a communications company is communication, not information; which means that telecoms companies should review their relationship with their vendor when they find their bill for internal IT skills rising. Companies that succumbed to the dotcom burst were those that thought their core business was the Internet. They lost sight of what they were in business for, and paid the price. Africa does not have to repeat this mistake. Africa largely has had the benefit of learning this dotcom lesson from a distance. South Africa was possibly the country in Africa that suffered the most from the dotcom fallout. The lesson learnt was – “technology doesn’t change your core business, it merely helps you do it better.” In an IT-heavy business such as telecommunications, outsourcing can make a lot of sense. Partners can upgrade their skills and contract their services to telecommunications companies. They would be local, specialised, and off the telecoms company’s payroll. The bottom line for telecoms companies is to seek an IT partner that can respond to change with mature stable product that adheres to standards; that can provide skills and skills transfer capabilities, and one that has a strong local partner network to foster a sustainable and beneficial relationship. Conclusion The future of telecoms will bring only greater activity in response to greater demands. The sense of urgency that prevails in Africa to establish saturation coverage of services has been transferred to IT partners. However, to avoid the mistakes made in the past, and to build in Africa a powerful, dynamic and affordable telecoms infrastructure, IT and telecoms must pursue a common goal of sustainability.