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INFOTECH: IQ Business Addresses South AfricaÂ’s Challenging Times


Recent Gauteng Business News

At its annual IQ Business 2011 conference, leading independent South African management consulting firm, IQ Business, tackled the unprecedented time of change business finds itself in. CEO Adam Craker said in his address to a strong contingent of senior business executives that IQ Business believes that business is experiencing unprecedented change, “I believe we will only appreciate our challenges with the benefit of hindsight. Zwelinzima Vavi, General-Secretary of Cosatu, said that he believed this is the greatest economic crisis ever faced by humankind and at first I thought this was a dramatic overstatement but on reflection I think he is right.”

Craker says the crisis extends into business across the globe with executives searching for answers in terms of when the recovery will shape up and the reality that the developed world is facing a double-dip recession. The question is how this will impact Africa. “The reality and perhaps upside is that one business’ challenge is another’s opportunity. An example is the massive shift towards business process outsourcing which has been accelerated by the recessionary times. Processes such as human resources, finance and procurement are all contenders for off- shoring service providers. Our opportunity is to compete for this business with the providers in other developing markets.”

IQ Business Believes Cost Reduction is Behind Process Outsourcing

He says that one of the mid to long-term rationales behind this shift is cost reduction. A speaker at the conference, Sean Kracklauer, President of Hackett’s Advisory Services and Research says that the strongest driver of sustainable cost reduction is a strategically designed service delivery model. “Companies that over the years have developed and executed an optimised service delivery strategy - one that purposefully and intelligently defines how certain work gets done, where, and by whom - are far better able to achieve sustainable, scalable cost reduction in their operations. “

He says this approach is preferable as opposed to relying strictly on across-the-board staff reductions and discretionary spending freezes to spare costs. “Top-performing companies have developed global service delivery strategies that leverage business process improvement programmes, shared services centres, and business process outsourcing opportunities to attain structural cost reduction that delivers competitive advantage regardless of whether the economy is on the decline or on the rise.”

Kracklauer says this is very relevant to the local landscape and the continued struggle of the public sector to provide adequate services. “Simply put, we cannot rely on the public sector to dig us out of this crisis. The private sector has a responsibility to address these issues in conjunction with Government if success is to be achieved.”

IQ Business Sees Entrepreneurship as the Way Forward

Mpho Makwana, an independent director and speaker at the conference says the question should be how to develop 500 entrepreneurs who can in turn employ 10 000 people each. “We need to think on grander scales if we are to find workable solutions for the continent.”

Makwana says the concept of using a consulting firm such as IQ Business is often seen as a grudge purchase with local businesses preferring to utilise internal skills, but as a result of the ever-widening skills gap, the grudge moves away as companies strive to achieve business objectives.

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