Currently celebrating its 10th birthday, Afrocentric IP has shown that black owned and managed IT businesses are not only possible, but profitable…
Even with B-BBEE legislation firmly in place, the South African IT sector faces significant transformation challenges. Fully owned black owned companies remain a minority, while black management control has been slow to take root, and the industry continues to deliver disappointing returns when it comes to meeting employment equity targets.
Afrocentric IP bucks this trend. The company is one of South Africa’s leading black owned IT operations and is currently celebrating its tenth successful year of business. It has an established a base of over 50 clients across all nine provinces and the SADC region, and has also launched new branches in Limpopo, Eastern Cape, and KwaZulu Natal.
‘The key to progress for our company has been getting the mix of ownership and on-the-ground experience in delivering contracts right,’ says Langa Kuboni, Afrocentric IP COO. ‘This can be complex in the IT sector, which is characterised by long standing relationships between established companies. Creating a strong track record of project delivery has been a challenge we’ve overcome, and I think it’s credit to everyone involved in the company that we now stand as one of the few black owned, managed and staffed IT companies in the South Africa.’
Even though Afrocentric IP faced significant challenges in its first ten years, it is now very well positioned to prosper in a sector where changes to the B-BBEE Codes of Good Practice are pressurising local companies to dramatically improve their transformation performance. The codes were revised in 2017, in a process that effectively closed the fronting loopholes that existed in the 2003 and 2007 editions. The impact wasn’t immediate, but in 2019 the sector is increasingly facing an urgent need to transform at operational level, in addition to ownership.
One of the most important changes to the codes sees ownership, skills development and enterprise & supplier development now all carrying equal weight. As a result, failure to achieve a 40% score across all three elements results in the discounting of a company’s BEE status by one level. In addition, the number of points required to achieve Level 4 has increased by a significant margin. Two years on, the revenue stream and new business development implications have become evident, particularly for ICT companies operating as public sector service providers. Simply put, failure to meet targets across all transformation pillars is likely to see revenue streams dry up.
Afrocentric IP’s clients include an extensive range of public sector organisations, including (among many others) the Human Sciences Research Council, the Department of Health, Mogale City Local Municipality, Limpopo Provincial Government Office of the Premier, Eastern Cape Provincial Department of Public Works, The South African Department of Rural Development and Land Reform, the Department of Science and Technology, National Library of South Africa and the National Disaster Management Centre.
‘Fulfilment at government departments isn’t just a matter of installing software and helping people use it,’ says Kuboni. ‘There’s an entire IT infrastructure ecosystem where all the parts are inter-linked – within departments, and between them. Each initiative must be executed with consideration to the wider ecosystem, and the more experience a company has in this realm the more effective they’re going to be. Afrocentric IP has spent the last decade building this contextual knowledge and is now reaping the benefits.’
Kuboni goes on the highlight the importance of industry partnerships to Afrocentric IP’s success.
‘The milestones we’ve achieved over the last decade, including meeting key growth and sustainability targets, have been possible thanks to long lasting, active partnerships. A lot of our business partners have been with us since inception, and they’ve played an important role in helping us lay a sustainable foundation.’
For example, Afrocentric IP is a GOLD Micro Focus partner, and, together with the Limpopo PGITO and Micro Focus, implemented a shared disaster recovery solution that services the entire Limpopo Provincial Government. The project remains the only one of its kind operating in the country.
When it comes to the South African IT sector’s ability to produce more companies like Afrocentric IP, Kuboni raises the need for much improved, sector-wide communication on how to think about, and deliver on, transformation targets.
‘If existing players view transformation as a threat, little will change at operational level,’ he says. ‘But if companies understand how to think about hiring new staff and training them in a way that builds their business, then we could be looking at a future sector characterised by creative partnerships, innovation and excellent delivery. If we get this right, everyone will benefit, from clients to government departments through to shareholders, and, crucially, employees.’