Gijima, which for many years was one of South Africa’s leading IT service companies, hit a rocky patch a couple of years ago when it lost a number of key contracts, and underwent some key staff changes. The company has been off the radar for the last few years, but has now concluded a three-year turnaround and is ready to take its place in the South African IT industry again. Kathy Gibson met up with the executive team to find out more
GijimaAST used to be one of the giants of the South African IT industry. The massive organisation held key contracts in financial services and government, and appeared to be on a non-stop upward trajectory.
But just five years ago, GijimaAST came under fire: it lost an important Home Affairs contract which, although later regained, saw confidence in the company slip and a couple of other strategic customers in government and the private sector failed to renew their contracts.
The fall from the top of the pile was as quick and inevitable as the rise had been, and GijimaAST quickly found itself battling for relevance as its revenue and profits dropped.
In October 2012, then-CEO Josh Bogoshi resigned from the company and interim CEO Eileen Wilton stepped in to lead a planned three-year turnaround. She was confirmed as the CEO a year later, and has now completed the turnaround – on time and on target, as they say in the IT world.
Almost three years to the day since she took up the company’s reins, the three-year turnaround is complete and the new-look Gijima (it changed its name during the turnaround and also delisted from the JSE) is ready to once again assume its place in the IT industry.
A new executive team has been signed up to lead Gijima into the new era. Wilton remains on board as the CEO, with Maphum Nxumalo as chief operating officer and public sector lead, and Thembi Tulwana looking after corporate affairs, marketing and communication.
Wilton is justifiably proud of the work that’s been undertaken over the last three years: the Gijima that has emerged is proud of its heritage and confident in its ability to tackle challenges going forward.
She points to the financial figures, which tell a compelling story: revenue of R1,8-billion at the beginning of the turnaround dropped the next year to R1,5-billion. It stabilised at this point, though, with the next year showing R1,5-billion again. The final figures for the financial year just ended are not available yet, but Wilton says the graph is showing a decided uptick.
Profits (or losses) tell a similar story. A R335-million loss in 2013 shrunk to a R125-million loss in the 2014 and down to a much more palatable R30-million loss in the 2015 financial year. The latest figures are expected to show a profit.
“You can see from these figures where we are going,” Wilton says.
The revenue decline at the beginning of the turnaround was largely due to a deliberate consolidation of the company. “One of the first things we did was to clean up and clean out,” Wilton says. “This has resulted in a smaller company that is more competitive than before.”
A new esprit de corps
Within the last few months, the company was acquired 100% by Robert Gumede’s Guma Group and delisted from the JSE. Now, the new executive and the team of operational managers are ready to start making a splash in the industry again.
“We are keen to take up the challenge and believe we can make the right difference,” Wilton says.
There’s a new spirit of optimism and excitement within the company, she adds. “Gijima’s culture is built on real South Africans, with the heart and soul of South Africa. Our transformed workforce is all about what is best about being South African; like never giving up and proud of being transformed and representative of a new era.”
A new focus on customer-centricity has also made a difference to the organization people energised to think more about holistic solutions than point projects. “It’s about customer first, and customer service first,” says Wilton.
“What’s been particularly humbling about this turnaround is that we can do nothing without the people, who are key to making a difference.”
On a technical qualification level, Gijima has not only maintained its competencies with its vendors, but in many cases has actually improved them.
A question of corruption
Leading up to the dispute over the Home Affairs contract , the loss of the SAPS break-fix contact and a portion of the ABSA desktop management contract back in 2012, rumours of corruption within GijimaAST were prominent in the industry.
During the turnaround, it’s been important to get to the bottom of these rumours and either fix the problem or set the rumours at rest.
Wiltos says that over the last three years no evidence of any corruption has been uncovered. “And we looked,” she says. “We had a full mandate from the chairman to find any evidence and clean it up, but we have found no evidence of corruption at all.
“There are enough controls in the organisation, which existed before the turnaround, that it would have been almost impossible to cover up corruption.
“In the court cases we have been through, we have fought and won because there is no evidence of it.”
Wilton adds that, prior to the delisting, a full audit was carried out – and it was particularly indepth because of the turnaround. “It was not about rubber-stamping anything, but the auditors went through everything . During the last three years, we have also have two rights offers, with funders doing their own due diligence.”
Going forward
The executive team is particularly well-suited to lead Gijima into the future. Wilton herself comes from an IT background, having served as the CIO prior to taking on the CEO job. Nxumalo has served as both chief operating officer and CEO of a number of well-known IT companies. Together, they aim to ensure that Gijima stays relevant to its customers and that business grows in the future.
And this means that, as it moves out of the consolidation and turnaround phase, the company is ready to launch new services.
These will revolve primarily around the provision of cloud services, and a new approach to security.
Nxumalo points out that Gijima has a significant base of existing customers, and wants to work with these organisation in identifying and providing new services.
“We have a great launching pad in our current business, where we do managed services, outsourcing and networking,” he says. “Building on this traditional business, and with our skilled workers, we can start to take this installed base into the cloud. We have the background and we have the skills to do it.”
In fact, Gijima is already a leading player in the provision of cloud services – although it’s been modestly quiet about its achievements. The company has migrated no fewer than 3-million users to Office 365, many of them in other parts of Africa, and all managed from the South African office.
There are many benefits to moving at least some workloads into the cloud, Nxumalo adds, including cost-savings and efficiency. Gijima is currently talking to its customers about these benefits, and helping them to migrate to a hybrid cloud model and then possibly to a full cloud in future where it’s relevant.
Gijima will leverage its existing data centre to offer additional cloud services to its customers, and will also make an announcement soon around a new cloud partnership and offerings.
As organisations transform to digital businesses, one of the most fundamental changes in their operations is security. As the scope and nature of security threats changes, a new approach is needed to address them.
Nxumalo believes there are two fundamental principles to security in the new era.
The first is to collapse inward and focus on the data, securing it at source. The second is around human behaviour, managing the risks from internal breaches.
“So we provide a wider spectrum of security services, focusing in internal and external threats, and helping customers to do both efficiently.”
The executive team
Eileen Wilton, chief executive officer
Eileen Wilton has a strong technology background, having spent the last 30 years in the IT industry.
Her early experience was with the mining houses, implementing mining systems, for companies like Gencor, Impala and Anglo American, where she served as CIO.
She ran her own business for a couple of years, servicing mainly mining houses.
Wilton moved back into an internal position, this time in the financial services world where IT is seen as being core to operations, joining Old Mutual as the global CIO.
This was followed by the move to Gijima, at the time when the company was in some turmoil.
“As a South African, I felt that I could make a difference to something that is truly South African,” Wilton says. “I joined Gijima as the chief operating officer and, when the previous CEO left, it was easy to step in as the interim CEO, and then the permanent CEO.”
Having a technology background is a definite advantage in running an IT company, she adds, helping to ensure that the customers’ needs are thoroughly understood throughout the organisation.
Her experience at Gijima has been good for Wilton. “All the things about this company, past and present, are about delivering value. It has helped me to stretch and grown on the personal level.
“And working with an entrepreneur like Robert Gumede has been very special, offering a different dimension and scope for growth. It has been an honour for me.”
Maphum Nxulamo, chief operating officer and public sector lead
Maphum Nxumalo is a well-known veteran of the IT industry, having served 35 years in various capacities.
“I started out as a techie,” he explains. “I worked as a programmer, as a systems engineer and as a systems analyst.”
He has held executive positions for the past 20 years and has worked with some of the most prominent IT companies in South Africa.
Nxumalo has been the chief operating officer of SAP, the CEO of SAS Institute and a vice-president of T-Systems.
So what brings him to Gijima?
“I love the challenges of this position,” he says. “I believe the turnaround has been a success; and it is great to be with an organisation that is truly South African, and being able to contribute to that in some way.”
Thembi Tulwana, head of corporate affairs, marketing and communications
Tulwana started working in the IT industry in the 1970s, at IBM, before heading to the US to further her studies.
A subsequent career in corporate affairs and public affairs led her to the aerospace industry, where she spend 10 years learning about the industry and working in various aspects of it.
This was followed by a stint in the lottery business, from 2001 to 2013, when she left to join the Guma Group, the company that owns Gijima.
“Guma is led by an entrepreneur extraordinaire,” Tulwana says of chairman Robert Gumede. “He is a leader who enables everyone in the organisation to understand the strategy and to carry it through.”
After two years at Guma, the opportunity came up to join Gijima, and Tulwana made the move.
“The chairman wanted to have good people who fit into the strategy at the company, to help grow strong skilled people and take the organisation to a new level.
“The first part of the transformation has been completed, giving birth to a new organisation that shakes you up to say that we are moving: we have got the tools and the opportunity to carve a new life for the company.”