Are you ready for ERP?

ERP systems are fast becoming the way businesses manage themselves world-wide. ERP (Enterprise Resource Planning) is the name given to the large software systems which control and manage the manufacturing, distribution, services and finances of enterprises. What are the implication of ERP systems for sub-Saharan Africa? Contributing editor Tom Nevin gets answers from Brett Mundell, divisional manager for Africa for ERP vendor Tetra Software.

African Business: Is Africa ready for ERP?

Brett Mundell: ERP for Africa? Well, many would say that outside South Africa there is a very limited market for ERP systems south of the Sahara. The usual cynics would point out that almost all business in Africa falls into three camps: government owned and managed, expatriate owned and managed, or locally owned cottage industry. They would continue with the argument that government owned business are by design labour intensive, so efficient ERP systems have little place. Expatriate businesses make their buying decisions in their home countries so any ERP system decision to purchase would not be made in Africa, and that locally-owned industries are too small to warrant ERP systems. Having once again dismissed Africa as a basket case, they would look no further.

AB: So you believe this thinking is flawed?

BM: Absolutely. Not only is there a vibrant market for ERP systems in Africa outside South Africa, but in my opinion Africa needs ERP systems for the very reasons that are quoted by the cynics.

AB: Where in Africa are ERP systems used?

BM: Let's look first of all at some of the more successful operations in Africa, to give the lie to the "everything is government, expatriate or micro" argument. Zimbabwe has a thriving locally-owned business sector, many of them using ERP systems. These companies have recognised that good systems are vital for them to be able to compete both nationally and internationally, and they have followed the rules to make sure that they can compete, can grow and can manage major business sectors. In doing so, they provide not only many jobs, but more importantly, extensive career paths for their employees. They also develop satellite industries which provide employment and entrepreneurial opportunities.

AB: How essential is ERP to African business growth?

BM: I'm not pretending that the ERP system is the only key to the growth cycle far from it. Money, entrepreneurship, knowledge, staff skills and many other factors are important. But it all comes apart if the company has all of those factors and no decent internal systems. Indeed, many of the other factors become more accessible with good systems. Finance is one, risk management is another.

AB: Apart from South Africa and Zimbabwe, where else is ERP being used?

BM: In Mauritius, Namibia, Kenya, Botswana and other countries in Africa, similar rules apply. Mauritius is a world player in textiles, Namibia is advanced in retail, Kenya and Botswana have thriving tourism sectors. Uganda's march to prosperity is rapidly becoming the stuff text books are made of. Seychelles is one of the most environmentally conscious countries on earth. Even in Mozambique, long ravaged by civil war, building cranes are aplenty on the skyline of Maputo, and evidence of development commercial, residential, agricultural and tourism related - is everywhere.

AB: What are the spin-offs?

BM: In all of these countries, ERP systems in all sectors of the economy are allowing enterprise to grow and prosper, with all the spin-offs for the economy and employment. In each of these, taxes and employment generated by the entrepreneurs relieves the governments concerned of the 'African burden' of being the only desirable employer.

And even in these fast-advancing states, the danger lies in the mindset of the local businessmen. There is still too much of a tendency to try and keep it small and simple, to rely on family for management and simple bookkeeping for information. Many hold themselves back, being somehow convinced that they cannot compete with overseas business.

One of the undesirable results of this negative thinking is the brain drain from Africa. As South Africa's deputy-president Thabo Mbeki has pointed out, Africa outside of South Africa, has lost over 300,000 of its intellectuals to emigration in recent times skills that Africa cannot afford to lose. Yet the evidence that Africa can succeed is there for all to see. Tea and tobacco in Zimbabwe, ecotourism in Botswana and Seychelles, tertiary education in Nigeria are amongst the many indigenous African success stories.

AB: The countries you refer to have established and working economies. What about those that are not as advanced?

BM: Other parts of Africa are nearer the cynics' view, but this need not be so. Leaving the situation of the government being the only major employer, while the rest of the country works in cottage industries that pay little or no tax is surely a recipe for disaster many examples bear witness to this truism. But even in the most damaged economy, there is no reason not to empower businesses with good systems

One of the most complex ERP systems installed by Tetra Software is on a mine in northern Angola, whose head office is in Luanda. Poor or non-existent telecommunications has been overcome by satellite and physical transfer of data. The language issue was overcome by having an English/Portuguese multilingual system, and the four different currencies used in the system have been accommodated. And this has all been done in a country where the on-going civil war has all but destroyed the infrastructure. If it can be done in Angola, then there is no reason why it can not be done in any other African country. There are more such examples: both Rwanda and Uganda are installing

ERP driven systems for their fledgling cellular telephone industries.

AB: How do you see the future of business in Africa?

BM: Self-doubt among African businessmen and women is not merited. African business can be as dynamic, competitive, systematic and growth-orientated as anywhere else in the world. But to do so it has stop doing bookkeeping on the back of the proverbial cigarette box. ERP can be one of the empowering factors of African business and Africa needs all the self help and self respect it can get. The cynics will continue to write us off as the everlasting basket case if we do not take the initiative to compete on the national and international stages.

For more information on ERP

Tetra Software Africa Division has its headquarters in Johannesburg, South Africa, and operates with distributors and business partners in several African states.

Telephone [phone]; e-mail infosa@tetraworld, com; web: http;/www.tetraworld.com.