INNOVATION
You Should Not Pay Extra
For Technology Just
Because Of Good Branding
By Eugene Wanekeya
T
here are technological solutions
available
to
give Kenyan
companies a lifeline during this
hard economic times, but the uptake has
been slow. Why is this so?
It's no secret that Kenyan companies are
struggling. In 2019 coming into 2020,
close to 1000 companies operating in
Kenya have been forced to either shut
down or lay off up to 60 per cent of their
workforce. There are of course varied
reasons for this but the most predominant
has been cash flow issues that have
affected normal business operations.
Many companies don't seem to have a
sustainable solution to keep them afloat as
they try to weather this economic storm.
Among the primary solutions that these
companies are putting in place to mitigate
the cash flow problem is reducing their
expenses. This has essentially involved
cutting down on all expenses that the
company deems as non-essential. In the
Kenyan case however, many companies
have reduced all their non-essential
expenses, and are now facing the painful
task of reducing their essential expenses
as well.
It's a tough balancing act determining
what is essential but not critical to the
business so as not to affect its ability to
generate revenue. The most affected has of
course been personnel costs. Job positions
that were once considered important
when the company was on a growth
trajectory are now being considered not
critical to the company's survival, hence
being declared redundant. But, hold on.
As a CEO, or a Board, before you make
that painful decision to start making job
cuts, have you considered all available
options at your disposal?
The reality about the business world today
is that companies have become excessively
reliant on technology. Most companies
70 MAL34/20 ISSUE
have moved away from mundane manual
processes and adopted automation of
almost all their business processes from
Enterprise Resource Planning to data
management and storage. This essentially
means that the business cannot operate
without technology. This in itself is not a
bad thing if a company’s overreliance on
tech comes with massive ROI.
In Kenya however, most companies have
been overpaying and continue to overpay
for proprietary technology solutions
oblivious of the fact that there are more
cost friendly, more advanced and more
user friendly non-proprietary alternatives,
with a guaranteed ROI. This is mostly out
of lack of knowledge, poor research, or
just choosing to remain conservative.
Most decision makers in these companies
seem unaware of the current technological
trend where leading global technology
manufacturers such as Facebook, Intel,
Microsoft, Google, Rackspace and
IBM among others, are embracing open
technology by making their software
and hardware solutions non-proprietary,
so as to make them more affordable and
accessible to people around the world.
This is out of the realization that when
more people have access to affordable
technology, there is more uptake hence
more economies of scale.
This has resulted in tremendous cost
reduction as companies can now access
state-of-the-art
non-proprietary
technologies at about half the cost they are
currently spending on their proprietary
equivalents. This is a very significant
saving that can offer a lifeline to many
struggling Kenyan companies.
Let’s put this in numbers for a much
clearer picture. Say for example, your all
in cost for a proprietary technology per
quarter is between KES 3 and 5 Million.
This can either be for an ERP subscription
and/or maintaining hardware at a data
center. Reducing this cost by half, through
adopting a non-proprietary equivalent,
means you are potentially saving between
KES1.5 and 2.5 Million each quarter,
which you can reallocate to retain talent in
your company, invest in innovation or even
in more marketing initiatives.
It’s important to note however that a lack
of understanding of what open technology
is, and a misplaced fear of the word ‘open’
has been the biggest stumbling block
that is preventing decision makers from
embracing this no-brainer solution that
is bound to have tremendous financial
benefits for their respective companies.
The truth is that there is nothing to fear
about open technology, as the primary
difference between a proprietary and
non-proprietary hardware or software
solution is just a brand name. In fact, open
technologies have a stronger edge over
proprietary solutions because they invite
more tech community participation in
their design and testing therefore making
them better built and more interoperable
with other systems.
As a primary decision maker for your
company, it’s in the best interests of your
company to familiarize yourself with
global technology trends that have the
potential to positively impact your business
operations by contributing towards your
business’ sustainability. You had better be
wiser this 2020.
Eugene Wanekeya is the Head
of PR and Communications at
ATLANCIS Technologies, an
Innovative IT Solutions provider
transforming the ICT landscape in
Africa. To interact with and get to
know more about this trend spotter,
you can reach him via mail at:
[email protected].