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Africa Outlook

Computer
Warehouse
Group

COMPUTER WAREHOUSE GROUP

Q&A: Africa's ICT Entrepreneurs



Africa Outlook hosted a Q&A with Austin Okere, Chief Executive Officer of Computer Warehouse Group (CWG) PLC and Entrepreneur in Residence, Columbia Business School, New York

Writer Matt Bone
Project Manager Donovan Smith

Could you give me an introduction to Computer Warehouse Group?
Computer Warehouse Group (CWG) was established in September 1992 with just a US$16,000 operating budget and six staff. We built the company up slowly and steadily in the ICT markets and began to expand. We thrive on staying ahead of the curve in the ever changing technology landscape and maintaining a dominant leadership position. We have evolved from being a Dell PC sales and support company, through providing Enterprise Systems, becoming an outsourcing company providing Managed Services to major clients such as MTN, where we have over 100 badged engineers managing their IT infrastructure, to becoming a dominant IT utility enabler in our region, providing Software-as-a- Service through Cloud Computing on a subscription basis.

We crafted a major ICT plan in 2010, realising the popularity of cloud computing, and the major opportunities for this in our region, following the increase in broadband access from 0.65tb to a combined capacity of 9Tbits per second by the end of 2013. We now have a staff complement of 650 employees, of which 80% are engineers and ITIL (Information Technology Infrastructure Library) certified. We have consolidated our leadership position in the ICT sector with a record turnover of about US$130 million (N20.8billion) last year.

We were very clear that while our tremendous growth over the years had been propelled by our traditional businesses in hardware infrastructure sales and support, software licensing, and VSAT bandwidth vending, these represented mature and declining margin businesses.

We also launched a Tier3 Data Center, which was commissioned by no less a person than Engr. Dr. Ernest Ndukwe, the 'Father of Nigerian Telecoms'. We are now engaged with companies who seek to co-locate their Disaster Recovery Systems with us.

What makes CWG stand out from the crowd?
We are significant partners to the global IT majors such as IBM, Oracle, EMC, Wincor-Nixdorf, Infosys, Cisco and Symantec. We have also evolved a subscription business model, providing Software-as-a-Service to customers through Cloud Computing, taking advantage of the abundant bandwidth at our shores and the attendant exponential increase in Broadband capacity. This initiative which was designed to empower SMEs to take advantage of technology to grow their businesses is tagged CWG2.0. The idea is to enable each of the 17.7million MSME (Micro, Small and Medium Enterprises) in Nigeria to build sufficient capacity to add one more employee. By so doing, we would be helping to foster inclusive growth by creating an additional 17 million jobs.

Our remuneration is mainly variable based and is correlated directly to the results achieved. This makes everybody in the company see themselves as owners; sort of entrepreneurs within a larger entrepreneurial establishment. They are focused on the big picture, play as a team and are accountable for the businesses under their control.

What has your business been doing over the previous year?
2013 marked a significant milestone for CWG, as we listed our shares on the Nigerian Stock Exchange, lifting the exchange by about N14b, and becoming the largest ICT security on the NSE.

We consolidated the significant progress we have already made towards becoming the number one ITutility enabler in Africa, by launching two additional Cloud products; SMERP, an Enterprise Resource Planning application for SME's on a subscription basis and the Diamond Yello account in conjunction with MTN, Ericsson and Diamond Bank that allows the 57m MTN subscribers to be Mobile Money enabled.

What have been some of the challenges in the ICT industry in Nigeria? The most challenging issue in the ICT industry here is the unavailability of skilled personnel in significant quality and quantity. This perhaps stems from the lack of targeted investments in the education sector at primary, secondary and tertiary levels.

As our business is majorly people driven, we have taken steps to plug the skills gap by establishing the CWG Academy. The academy is a three month crash course in empowering intakes with our culture and the technical essentials for one month, followed by an intensive two months internship program. We started with 50 intakes a quarter in Lagos, but have now rolled out the program to Port Harcourt, Abuja and Ghana, with plans to launch in Uganda and Cameroon in the third quarter of this year.

How would you sum up the current state of the industry then?
The recent GDP rebasing puts Nigeria as the largest economy in Africa, with a GDP of $510 billion. The most surprising revelation is that the services sector is the most significant contributor with about 52%, with ICT telecoms accounting for about 9% of GDP, and targeted to grow to 15% by 2015. The major drivers of this growth are: the undersea fibre optic network, providing greater broadband speed at lower costs; favourable demographics, assuring increasingly affluent and youthful population; a booming telecom industry and the demand for efficient telecom technologies. These drivers shall create opportunities and CWG, as always, will take advantage of these openings to create value for our customers and generate additional sustainable revenue streams.

How important is the supply chain to your business?
Supply chain and logistics are very essential to our business, as we depend on logistics partners to fulfil customers' orders. There has been a major challenge in meeting the demands of a growing economy such as Nigeria. There are however global companies that are moving into the region through local partnerships to raise the efficiency of this key component of business. The cost of logistics is also a major challenge, as it costs about twice the amount to ship a container between two African ports, as it does to ship it from America or Europe. What we have done to mitigate this is to have a stringent system of evaluating logistics partners, and then training them in the intricacies of our supply chain. We also work with the customers to be proactive in their requirements allowing us sufficient time to process their orders.

What are your aims, targets and projections for 2014 and beyond?
We are in the twilight of our last 5 year strategic plan, which we crafted toward the end of 2010. Our vision was to be the number one IT utility enabler in Africa by 2015. As we begin to enter the second half of 2014, I feel extremely confident that we are on course to achieve our aim. We plan to scale in our new subscription business model, possibly though acquisition of similar focused companies in the region. Having listed our shares on the stock exchange, we are confident that we shall be in a position to raise funds to purchase target quality assets, as well as our explosive organic growth.

Has your company won any awards recently?
CWG was selected as a World Economic Forum Global Growth Company (WEF-GGC) at the 2014 WEF, Africa at Abuja in May this year. CWG was selected for this recognition based on our phenomenal growth, global corporate citizenship, executive leadership and impact on the competitive landscape of the ICT industry in Africa.

For the second year in a row, CWG was awarded Most Outstanding Corporate Social Responsibility (CSR) Technology Company of the year. We continued to support our host communities in 2013 by ingraining social responsibility as an integral part of our business model, with focus on the education sector.

What is CWG's secret?
The secret to our success is to keep goals and aims realistic and keep things simple and let whatever you do be the best it can be, rather than the best it should be. We believe that there is always room for improvement, and we do not shy away from exploring possibilities, even if we make mistakes, as we stride towards continuous improvements and significant innovation. We pride ourselves on being industry leaders and take on the responsibility of not just following the track, but also blazing new trails for others to follow.