The acquisition of Business Connexion (BCX) by Telkom has been subjected to numerous delays, but is now expected to go through by the end of August. Customers and partners of the successful IT company are understandably nervous about what will happen once it becomes an official part of the telecommunications operator. Kathy Gibson spent some time with CEO Isaac Mophatlane to chat about this and other issues

Business Connexion (BCX) is the epitome of the local start-up made good.

Founded by twin brothers Benjamin and Isaac Mophatlane, the company has grown into one of the most successful IT services and solutions companies in South Africa, with a reputation for excellence and fair dealing.

So the pending finalisation of the acquisition by Telkom is causing some consternation in the market.

Isaac Mophatlane, who has led BCX since the passing of his brother Benjamin just over a year ago, stresses that the company is pursuing a policy of business as usual – not only for the present, but after the acquisition goes through as well.

“There was always going to be some concern about the Telkom acquisition, getting a new shareholder that is in the process or shedding jobs,” he says, adding that the current restructuring at Telkom won’t impact BCX at all.


New market opportunities

In fact, the inclusion of BCX in the telco’s offering is positive news for Telkom, he says. “The mobile and telecommunications operators are seeing pressure in their traditional businesses, and the BCX acquisition will give Telkom an additional revenue stream.”

This merging of the telecommunications and ICT services will give both sides of the expanded organisation new opportunities, Mophatlane believes.

There is very little overlap in the offerings from the two businesses, which operate in different markets and service very different customer sets. Combined, they can offer a powerful mix of telecommunications and IT services that should resonate with both organisations’ customers.

In fact, BCX will immediately gain additional business when it takes over the outsourced management of Telkom’s data centre.

Mophatlane stresses that BCX will remain an independent operating entity after the acquisition, a clause in the contract that he credits his late brother including from the start of the negotiations. This means the organisation will stay in its own premises and operate under the leadership of its existing management team.

“We have had a endorsement from our customers, who like the fact that BCX will remain independent and that we are carrying on with business as usual.”

The only real difference, says Mophatlane, is that there will be a new shareholder and BCX will be able to offer its full range of services to Telkom customers, while including Telkom offerings in its own services.

“In a nutshell, this acquisition is an exciting opportunity for BCX, allowing us to offer telecommunications together with IT services. There is huge opportunity in that combination.”

In fact, Mophatlane believes that telecommunications companies are going to increasingly look to partnering with or acquitting IT services companies in order to remain relevant in a rapidly-changing marketplace.

“We all know about the declining voice market, so data is going to come to the fore. We can leverage Telkom’s infrastructure to offer our customers a more end-to-end solution.”

Providing solutions is what BCX has always prided itself on, Mophatlane adds – and to this end the company fosters an environment of innovation.

“There really is a lot of innovation in this business,” he says. “We are doing some unbelievable things for customers, right out on the leading edge.”


Innovation at the core

Creating an environment where innovation flourishes wasn’t something that BCX set up to do deliberately – but it has worked out that way anyway. “It is probably the nature of the beast that there is going to be a certain amount of innovation,” says Mophatlane.

Whatever incubates and feeds it, the spirit of innovation at BCX goes back a long way, he adds, right back to the customised applications developed for customers 20 years ago – customers that the company still has a close working relationship with. This has been largely driven by the fact that BCX has arguably the biggest number of software developers in the business.

But the company is certainly not resting on 20-year-old laurels, Mophatlane says. Among newer developments are a banking switch recently commissioned in Tanzania that allows all the banks in East Africa to talk to one another and seamlessly transfer funds.

“We also have our own ERP software for municipalities, and have captured a significant share of that market,” he adds.

“If you zoom in on BCX, there are a lot of jewels that have come out of our focus on the client, and on developing solutions that help to improve the client’s efficiency.

“We have been able to add significant value to our customers by staying close to them.”

Indeed, it is this customer focus that is part of the value that BCX brings to the Telkom acquisition. “We are a customer-led organisation – we live with our customers – whereas telecommunications operators are seen got be a lot of distant. So when there is competition in the market, customers find it easy to switch their allegiance.”

The issue of competition needs to be top of mind for any company today, Mophatlane adds, with new threats coming from a variety of directions.

“You can’t take anything for granted because just about anyone could disrupt your traditional business.”

As a technology company, Mophatlane believes BCX needs to stay close to its customers and be the one to introduce disruptive technologies as part of its solution offering.


A question of ethics

Fraud and corruption has become a distressingly-common topic of conversation in South Africa these days, and the ICT industry has been singled out as being among the worst offenders.

But Mophatlane stands by BCX’s reputation for fair dealing and says that management does everything possible to ensure that the company does business in an ethical way, free of the fraud and corruption that characterises so many organisations.

“We have tried our best over the years not have any scandals around us,” he says. “And yes, we have lost deals because of it.”

BCX’s chief risk officer runs an active and ongoing campaign to make sure staff members know what’s right and wrong, what behaviour is acceptable and what isn’t.

“It’s a general trend in society that if people think they can do things with impunity, they will. But we believe there is more at stake than showing a good number at the end of the year.”

Apart from the moral imperatives, Mophatlane points out that reputational damage can be lasting and devastating. “We don’t want people to be wary when doing business with us.

“My late father used to say that something is called a kickback because, at some stage, it will kick you back.”

With a workforce of 7 000 people, it’s important to have strict guidelines about ethics, and ensure that all business is always done in an ethical way, Mophatlane says.

“We could have won more business over the years, but we would rather win a contract because of the quality of our work.”

The whole country needs to come together to fight fraud and corruption, Mophatlane believes. “For me, it is all about education and motivation.”

He likens the situation to where we were some years ago on the subject of HIV in the workplace. For a long time South Africans as a whole, and corporates specifically, didn’t want to deal with the issue. “But if you don’t deal with it, it will just keep coming back. So you might as well deal with it and put the programmes in place.”


ICT trends and directions

There can be no doubt that the ICT industry is in a state of flux right now, and that the future is going to look very different to the past.

Mophatlane believes that one of the big trends shaping the South African market is the entry of the big Indian IT services companies.

“These big organisations are now a fact of life in the market and we are going to see more consolidation as a result, and more co-operation between big companies.”

Convergence is also driving changes in the way companies deploy and consume ICT services, and this will also push companies to consolidate and join forces.

At the same time, end user companies are going to have more use than ever for ICT partners.

One of the biggest disrupters that Mophatlane sees coming soon is the trend towards the Internet of Things (IoT), with 50-billion devices expected to be connected soon.

“This is going to make the role of the IT partner more important than ever,” he says. “Previously, a systems integrator (SI) was called on to integrate a small number of field devices into the corporate network.

“Now there is an explosion of devices. The SI has to get smartphones, tablets, even televisions connected.”


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