Digiterra South Africa is Linking Strategy to Operations through Technology

Interview with Chris Jones, CEO of Digiterra

Can you start by telling our audience a little about Digiterra and also about your individual leadership style?

Digiterra is a services organisation; focusing on the business to IT continuum, with about 60% of our business generated from business consultancy and 40% from an IT base. Our business service interrogates each area of our client’s value chain, seeking to understand where breakages exist and providing answers on how best to address them. We assist our clients to better deliver against their strategic objectives, improve and enhance their processes, map and align their technology and finally work closely with their people to implement solutions that not only make sense to them but also improve the way that they do business. When we engage, we do so bring to the fore a combination of, contextual understanding, a set of disciplines and methods, and the right supporting technology that enables senior management to present their key drivers in such a way that is easily understood. At a functional level Digiterra combines its Echelon approach with leading software technology in the areas of Corporate Performance Management, Business Intelligence, Enterprise Architecture and Enterprise Resilience Management. These ingredients are combined in a very particular manner to deliver a very differentiated outcome of high quality and value.

My leadership style is mostly contextual in nature, and would vary from being democratic to more assertive, depending on the situation and audience. For the most part, we have a very mature level of consultants within Digiterra. It’s our staff and Management team that have addressed some of our biggest challenges. The nature of our business is client facing, so the type of challenges that we address are not only internal but in most circumstances, involve and require a customer centric perspective. I see my strategic role as paving the way for the future direction and long term sustainability of our business, but with a clear understanding that this is only achieved through the collective involvement of the entire organisation.

How long have you been in London?

London is a new but exciting market for Digiterra. We have been in London for just one and half years. We solve complex challenges within complex situations; London has its fare share of big and complex environment, specifically for corporates based purely on their volume and size. Delivering senior management solutions requires exactly what Digiterra provides. We see great potential and a wonderful experience through our engagements with our clients in the UK.

We have a very mature level of consultants within Digiterra.

What are some of your core value propositions?

If I have a look at the European market, the best value proposition that we bring to the market right now is a great in-depth product and experience at a much reduced price by means of comparison to the European market. Our price point comparison favours us quite a lot and the quality of service is still there at the same time. From a local market perspective there has been an increased demand that we have found within the market when it comes to our types of services. I think that organisations are moving towards a shared services type model so where a few years ago outsourcing was a very big trend, it is now changing somewhat for us. We have seen that there is a shift between organisations that would ideally want to outsource to countries like India etc. from a development perspective to needing the deep domain expertise to stay in house. That has brought across a blended model and we see an increase in demand when it comes to integration, software development and business intelligence.

In terms of the product offerings, what are some of the key advantages of Digiterra’s products, for example the strategic dashboard tool kit?

When we have a look at the productisation of the services that we provide, Board International, Adaptive Insights and Echelon are three key components for us. All three of them are products, one was born out of a methodology rather than a pure functionality productive based element and the other two are pure features and functions product based elements. Board and Adaptive Insights are very similar; they both focus on corporate performance management. What this allows the market is a capability to very quickly and effectively at an executive level understand the state of the organisation and be able to make credible decisions based on the information that they are seeing in front of them. Most importantly it allows them to do it on a self-consumption base meaning that they can put the information that they see important to them, customise it in the way that it needs to be presented and deliver it to their contemporaries within their organisation itself. When you look at the corporate market which is our client base itself, one of the challenges there is purely just the complexity of getting the right information to the right people to be able to make the right choices and decisions. What Board International and Adaptive Insights do for that client base is that it provides them with that capability quickly and easily either through a cloud based solution or an on premise solution. It incorporates things from excel spreadsheets to enterprise resource planning products to supply chain products. It deals with the entire value chain components and brings them through in a dashboard that allows those people to be able to see in gauges and rev counters where they are standing at any point in time. With your typical amber, green and red I can see whether things are looking good and I can see if they are not looking good and whether that be an issue of HR, finance, budgeting, forecasting processes, supply chain, sales and marketing, customer relationship management etc. We pool through together all of that data and we present it in a dashboard for the executive.

It’s kind of like Captain Kirk on the bridge!

Exactly. If you had to say to any corporate, “what is the thing that you need so that you can make credible decisions?” they would say “I need the ability to take all of this information, package it into a one pager so that I can understand it clearly and decipher the information, drill into it, share it, handle it as it needs, add variables, subtract variables as I understand the data in front of me and I can use it to make credible choices and decisions going forward”.

Are these products that you designed yourself, or have you amalgamated them from a number of different software applications?

The products we provide as part of consultancy solution are tier 1 market leaders in their own right, and have achieved substantial market recognition. Based on the contextual requirement from our clients we would provide a part or the entire product suit in conjunction to our Echelon approach.

Do you have exclusivity to distribute them?

When it comes to Echelon, we hold the exclusive rights to this approach. The combination of our packaged products and our methods provide a differentiated outcome. Should a client wish to acquire one of the products that we resell, they do have options to approach other resellers, but not at a price based differential.

What differentiates the company overall within the corporate performance management and BI market? How will you seek to position yourselves as a player globally?

The differentiator is between implementing a piece of technology and understanding the subject matter of that space that you are engaging in. The factors of what the client is trying to achieve whether it is cost reduction, process improvement, improvement of efficiency, consolidation etc. To be able to first of all understand the context is very important. One of our differentiators is that we are not a product implementation organisation; we are a consultancy organisation that happens to use what we believe is the right tool set to bring the right answer to the table. It is never a one size fits all, or a one implementation fits all approaches; it is always context based. Our differentiator is that we first seek to understand our client’s ecosystem. The second is that we interrogate not only the areas that we are delivering against, but all the peripherals around it: things like organisational change, making sure our client is ready for that kind of change, and making sure we understand all of the independencies between the touch points that can affect the outcome of what they are trying to achieve. One thing would be for me to give you a number and that number if I just give you a straight number will have a meaning, but if I start adding the right pieces of information around what that number means it can change its face and its value for you completely. What I am really trying to say is, what we do is that we make sure we understand all the variables that influence the choices that the clients try to make. If I don’t know what you are trying to achieve, it is very difficult for me to give you that right information or in this context the right number.

You have mentioned you have multiple partners in the corporate performance management and business intelligence space and you have recently partnered with Orbus software, the UK company. What advantages will this give Digiterra? Do you have any other exciting partnerships in the pipeline?

This has all been part of our new strategy over the last two years. It is a strategy that has been in the planning phase last year and the year before and this year we are in the year of execution so these are relatively new partnerships that we have to date but very exciting ones. They have complemented our consultancy capability tremendously and they have allowed us to have a reciprocal relationship with the product vendors that can add value in both directions. What I am trying to say is we are not just a sales house that will take your software and on sell it to the next person saying here is a piece of software, here is the price tag, there is the owner, thanks very much. We are not just a vendor. What we do is take our consultancy capability and our expertise to market with our partners that we have built a relationship with. The kind of conversations that we are having with a lot of our partners is that they are saying “we are a software organisation” and when they wake up in the morning they are keenly focused on the code that they are coding and the products features and functions and the next version that needs to go to market. It is not that they are not interested, but for their focus to be on how well that technology is being implemented in the market is a far bigger ask of them. If they can take that hassle away and say “listen, here is an organisation that will allow us the capability to worry about the effectiveness of its implementation within the market and we can focus on delivering good products” that is a really good combination.

Are there any other partnerships?

No we think for the time being we have filled our stable and it is about not trying to chew off more than you can at any point in time. We chose these particular products and partners quite strategically. It took us quite a while to choose them. It wasn’t a one direction thing; we didn’t go to market and say “please could we become your partner”. Conversely they weren’t actively seeking us; we jointly came together with each partner, chosen specifically in a package that we believe the market would like. The response has been quite favourable to date.

So it was like a courtship.

Yes there was a courtship that had to happen! Well put!

More generally now, how would you describe Cape Town’s business community’s mentality overall? I know it is a nebulous question.

Well I understand why it is asked. Cape Town is a mature market in many instances and a cautious market in other instances. We have found that there is good entrepreneurship that comes out of the region and there is deep domain expertise and experience that comes out of this region. The reason why we have been attracted to this market for the last five years is because it brings as many challenges as any of the other markets that we have engaged with thus far. What Cape Town is trying to achieve from an economic perspective is as bold as anywhere else. The conditions are unique and it does make them slightly more reserved in some instances and more considered in others but I think that once the choices are made, they tackle it with both hands.

Is it a big enough market for you?

The size of the market is big enough most definitely. There are some large organisations that are represented within this particular region. We see opportunities for growth in this region as well and a lot of the organisations that are based within Cape Town are multinational in their thinking if not in their practice; they have aspirations to move offshore and that is in alignment with our strategic value. We see a good reciprocal nature here because of that.

From your prospective what are some of the main challenges and constraints in the business environment within the Western Cape and Cape Town?

The Western Cape in my mind needs to realise that it is as good as it says it is from time to time. It needs to take the bull by the horns and move forward. It has good infrastructure, it has a local government that is intent on listening and providing value to the community and I think it is well poised. The important thing for Cape Town is to be able to take up that challenge and move forward in a faster pace. I think that the only thing that keeps it back is itself truth be told.

It should be more self-confident?

It needs to be more self-confident and this particular region can grow tremendously if they are willing to move on the opportunities more aggressively.

For you what is the best thing about running a business in Cape Town? Do you think the region really has a future as a tech hub?

The price point makes it quite favourable as a tech hub; I believe that the incubation programs that take place within the region are really encouraging. They are good starting points. There is a large untapped market within the region that will require lots of investment over the medium to long term. Do I think that it is going to be a region to be reckoned with? They are doing all of the fundamentals correctly and that makes it quite exciting.

Given the parlous state of the South African economy lately, and because of the tough macroeconomic environment, would you say that South African businesses are as uncertain as they are insecure currently? If so, how can a firm like Digiterra help to alleviate some of these uncertainties and help companies learn how to prepare for multiple possible futures?

Are you making reference to South African companies and their view or foreign investment opportunities?

Just the overall backdrop to the anaemic growth that is hankering the country.

You need to divide this into sectors. If we have a look at the financial sector, it is quite a buoyant sector, they have made decisions over the medium term quite a while back already, of their investments and innovation drive that they are trying to do. For them, technology is playing a critical role from an enablement perspective. I think the investments are being made there on the local front. Some of the larger financial institutions have put a stake in their investments and are well down the line into that program itself. If we have a look at the media sector, I think of the media sector within the African context; a lot of South African firms look to Africa as their natural growth point. If we have a look at the conditions from a political perspective and the uncertainty within the region, I think South African businesses are still quite buoyant about the opportunities in Africa in the media sector in particular. The competition is really tough and it is calling for renewed innovation and thinking as to how they take their products and services to market. There is a dominant set of players and there are followers. There is ample opportunity in that space; it all depends on whether or not they are willing to take up that opportunity. From some of the larger players in the market when it comes to media, we have seen willingness for them to engage in the African market quite aggressively and they have learnt some good lessons along the way. They are now starting to yield some of the benefits of those lessons that they have been learning over the last five to ten years. If I look at the manufacturing sector, it is probably the least buoyant that we see when it comes to the demand of our kind of services. They have internalised a lot and there have been tough market conditions. I believe that there is huge opportunity in the manufacturing sector because we have a large labour pool that could be utilised and which is now underutilised for manufacturing. It is still too early; we haven’t seen enough programs that are driven to drive that. From a foreign investment perspective I would imagine that wouldn’t be such a bad place to be. If I have a look at the oil and gas sector, for the Western Cape it is becoming more and more prominent and alternative energies are becoming a key focus point for South Africa. There are both plenty of opportunities for foreign investment and local companies. I would say that the financial sector will continue to grow, the media sector will go through some change and maybe some rethinking, I think that the manufacturing sector has potential and I also think that the oil and gas sector is going to see some growth out of this region from gas, shale and also alternative energies. When it comes to commodities, that is kind of like the big question mark for us right now. Digiterra as an organisation has invested tremendously into the coal sector and our consultancy services within that particular space. It is very quiet at the moment; it is a tough market, cost and consolidation is the order of the day but if commodities is to turn at any point in time I think that that could open up a whole bunch of opportunities in the region.

And Digiterra can service each of those verticals?

We do service all of those verticals quite well yes.

Finally, what would you say are some of the most forbidding hurdles that are currently hampering South Africa’s growth potential? Which sectors do you think have the most promise to really start to unlock value in the years ahead?

The most obvious hurdle that is talked about is foreign investment. Until such time as the political landscape is more settled, it will create a hampering effect on both local and foreign business.

I would rather talk about opportunities that we have seen both locally and globally and where there is potential, within our particular space and focus more specifically on the IT consultancy side. We see good opportunity when it comes to co-sourcing, outsourcing, shared services concepts etc. Shared services within the South African context is still quite a limited style for organisations doing cost consolidation. If you have a look at shared services per say, the concept is “I take all the primary elements whether they be finance, HR, sales and marketing and I say which of these key components could I put into a shared service that I can get economies of scale and reduce my overall costs and improve efficiency?”. If we have a look at the European market as our trading north, we see that the concept is quite widely accepted, so offshoring or near-shoring and a combination of shared services is adopted and is far more mature than it is in South Africa. The opportunity for shared services and the concept within the client base is something where we don’t see potential right away but in the near midterm we see huge potential. Also in a bidirectional way purely based on our cost of resourcing and the depth of experience that we have, we see huge opportunity in the European market for growth into that space. Europe and the UK already make use of South Africa that is why Cape Town has been labelled as a hub for contact centres for arguments sake. We see more potential for things like business process outsourcing, shared services centres and IT outsourcing opportunities. I think that the opportunity for foreign organisations sits squarely within the oil and gas sector. In the short term there is good opportunity there. I think within the manufacturing sector, as a South African and as a businessperson I see it as having most potential but we are yet to see tangible opportunities put in place for that though.

Historically South Africa has always been very strong in manufacturing. It has been one of its core enterprises with lots of car building, ship manufacturing, heavy engineering etc. It has been the backbone of the economy traditionally.

When it comes to engineering it has always been the support of the mining sector. If you look at motor manufacturing I think that definitely in the Eastern Cape it is the sector that has the most traction. If you have a look at the clothing and fabrics industry, that has taken a huge hammering over the last ten to fifteen years if not longer. That is purely from a global competitive standpoint yet I think the quality produced in South Africa offers opportunity once again. We would love to see it.

 

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