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6 Threats to Business in 2013

Risks aren’t always immediate to your business, sometimes macro-factors can impact you in ways you hadn’t considered.

Alison Job

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The last days predicted by modern-day Mayans failed to arrive on schedule. “In fact, the risks we all face as we go into 2013 are much more complex, and thus much more difficult to counter,” says Michael Davies, CEO of ContinuitySA.

“It is almost impossible to consider individual risks without taking the overall risk into consideration,” Davies observes. “Globalisation and the profound connectedness between individuals, companies and countries promoted by technology means that risk, too, must be seen broadly.”

Davies and members of his executive team have identified six business risks for 2013.

1. Social malfunction grows. Across the world, it is increasingly clear that established certainties and beliefs about how the world is structured are becoming fluid. There is an overall loss of faith in society’s institutions and their ability to deliver a just world order.

In South Africa, persistent dissatisfaction with service delivery has exploded into widespread and violent protests against the very nature of the system. The miners’ revolt in Marikana has been a watershed event, as it bypassed both the settlements negotiated by the miners’ own representatives and the normal processes of democracy. Democratic process, it seems, is either profoundly misunderstood or mistrusted.

This impatience with society’s existing institutions and processes appears to be spreading and there are worrying signs that even the middle class, on whose shoulders society’s prosperity and stability ultimately depend, are also losing faith in basic concepts.

The extreme passions roused by the ongoing e-toll saga in Gauteng is an obvious example of this trend. For the middle classes, this type of feeling generally translates into a reluctance to pay tax, an action that can fatally undermine the state itself.

2. Global economic and financial volatility. It appears that the 2008 financial crisis is both more far-reaching and profound than first expected. Markets and economies seem unable to regain an even keel, and many commentators are seeing this volatility as “the new normal”. The flipside is an increasing regulatory burden as governments and other institutions attempt to rein in uncontrolled capitalism and protect investors.

For South African businesses, important associated risks are the volatility of commodity prices, greater competition internally and in export markets, and an unstable currency.

3. Environmental risk. If volatility is the new economic normal, then there is every indication that climatic volatility is also becoming a feature of life. For South Africa, climate fluctuations may be expected to increase the risk of water and even food shortages.

Thus far, global and national environmental initiatives are gaining traction too slowly, and seem likely to add to the cost of doing business in the short term—giving rise to a classic case of how to balance short- and long-term risk.

4. Infrastructural risk. A common African business risk is inadequate and poorly maintained infrastructure. Water and power are the two obvious risks that threaten business, but the road and rail networks also present challenges.

Government efforts to address these problems are affected by the principle of interconnectedness: opposition to e-tolling, one feels, is more influenced by wider dissatisfactions rather than the principle of “user pays”.

Many South African businesses are taking extraordinary measures to mitigate infrastructural risks by assuming responsibility for all or some of the infrastructure needed for their projects. Property developers, for example, are often providing roads and sewerage, and factories some of their own energy—and think of corporate involvement in points people to ameliorate the effects of faulty traffic lights and schemes to fill in potholes.

5. Data risk. Data is becoming more important as a way for companies to assess risk and compete more effectively—this is the phenomenon of Big Data. It’s probably true to say that most companies are still coming to terms with the concept and, more importantly, how to use data effectively.

Nonetheless, data privacy regulations have already sprung up to protect personal data, creating a set of risks relating to data security. One is the growing menace of cybercrime. Another is the whole question of data sovereignty—as companies try to safeguard their data while reducing costs, they may opt for the security of cloud solutions.

However, when those data centres are located and/or owned offshore, it becomes difficult to be sure of data security and accountability for lapses.

An associated risk is the peaking trend of IT consumerisation, so-called BYOD (bring your own device—the use of private mobile devices to access corporate data). BYOD offers both advantages and disadvantages: boards and their CIOs need to think carefully about how to protect their data against potential threats—and how to use the available technology wisely to obtain a competitive advantage.

6. Business continuity remains misunderstood. Risk management has definitely become integrated into the corporate agenda, and is maturing. This may be seen by the replacement of the existing BS25999 standard by ISO22301.

The BS25999 standard set the standard for business continuity management, but the new ISO223301 standard is much more detailed in its requirements, and requires much more documentation of the processes followed. It also requires committed board-level leadership, thus effectively putting risk management into the spotlight.

However, in practical terms, the broader concept of business continuity management is becoming absorbed into the IT budget, with a concurrent diminishing of focus on operational matters. At the same time, budgets in general are under pressure.

“Ironically, then, the biggest overall risk has become corporate myopia about the true nature of risk—and this at a time when risk has become much more integrated into corporate strategy. Boards must resist seeing risk in terms of technology alone. Business continuity is a much more useful concept, one that takes into account the interconnectedness of risk today. When considering risk, business leaders need to take a broad view of organisational resilience before honing in on their particular company’s situation,” Davies concludes. “Risk is now systemic, and so the approach to risk must also be systemic and have operational relevance to the organisation.”

Alison Job holds a BA English, Communications and has extensive experience in writing that spans news broadcasting, public relations and corporate and consumer publishing. Find her at Google+.

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The Innovator Trust And Citi Are Searching For Black-Owned Smes Who Are Ready For Growth

The Innovator Trust, an enterprise development organisation, and the Cape Innovation and Technology Initiative (CiTi), Africa’s oldest incubator, are calling on Cape Town-based growth-stage ICT entrepreneurs to join the intensive 2-year enterprise development programme.

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The ICT sector has gone from strength to strength and is one of the fastest-growing industries on the African continent. Yet African entrepreneurs are still finding it a difficult business landscape to navigate. That is why The Innovator Trust and CiTi, through exposure, training and mentorship, now aim to equip entrepreneurs and businesses in the sector with tools that will keep them on track, assist them to achieve their goals and create tech leaders of the future.

ICT entrepreneurs in need of mentorship, skills development and business support who have been operating for more than 2 years and are fiercely committed to growing their business, can now apply to the prestigious 2-year Innovator Trust programme, co-developed and run by CiTi at the Woodstock Bandwidth Barn and remotely in Cape Town. Applications close on 22 February and the selected candidates will be announced on 4 March.

The Innovator Trust programme aims to support the: increase annual turnover, equip businesses with the necessary accreditation to remove red tape, as well as increase profitability and number of employees. Get ready to move the dial on your business.

Celebrating its 20th year of supporting entrepreneurs, CiTi currently runs a number of incubation programmes from idea to growth stage. After a very successful first cohort of the programme, completed in 2018, CiTi confirmed a second collaboration with the Innovator Trust to support further Cape Town businesses over the next two years. Applicants need to be in “ICT”, but this has included a broad range of focusses in the past, from IT recruitment, network security to cabling service provider and software solutions.

Related: Watch List: 50 Top SA Black Entrepreneurs To Watch

The programme, designed by CiTi and Innovator Trust, is not to be taken lightly. Monthly training, mentorship sessions with industry experts, and a strong focus on technical improvements means a substantial time and focus commitment by the entrepreneur. But this intensive design enables significant business progression over the two years.

 “Once the entrepreneurs who take part in our Enterprise Development programmes become more established, they turn their focus to growth. This accelerator is especially for entrepreneurs who’ve created businesses with high-growth potential and provides them with the skills to scale at speed and responsibly,” says Tashline Jooste, CEO of the Innovator Trust.

Cape Town was recently confirmed as the Tech Hub of Africa, by an Endeavor Insight Report commissioned by CiTi and partners, presenting growing opportunities for those businesses serious about growth, and with the right support.

“I believe strongly that ICT entrepreneurs are going to be critical to South Africa’s economic growth, which is why we need to focus on equipping these businesses with the skills they need to grow, create jobs and stimulate our economy,” adds Jooste.

In order to be considered for the programme, prospective applicants must meet the following criteria:

  • A company defined in South Africa as an SMME, QSE or EME;
  • Must be operational and trading for two or more years;
  • The business should be at least 51% black-owned;
  • A minimum Level 1 – 4 BBBEE status according to the DTI or ICT Codes;
  • The business must be a registered company with key focus in ICT and be based in Cape Town and surrounding areas.

In addition, applicants will need to supply copies of their company registration, company profile, and annual financial statements along with their BEE certificate and IDs with their applications.

Related: Attention Black Entrepreneurs: Start-Up Funding From Government Grants & Funds

“We had a fantastic experience on the Innovator Trust programme, perhaps most beneficial was the advice and mentorship on our financial management, up-skilling of our team, and establishing a 3-year budget and growth plan for the business. Our advice to entrepreneurs considering the course is “JUST DO IT!!!” The skills and knowledge you gain are invaluable and put us on a serious growth trajectory.” states Jennifer Classen, Founder of Ngaphaya Y2K10, and Participant in the 2015 – 2018 Innovator Trust programme.

Ready to grow your business? Learn more about the programme and submit your application HERE.

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Rocket Challenge Targets Local Coding Skills

The Rocket APT Challenge is open to undergraduate students 18 years of age or older who are currently studying engineering, science, or technology at an accredited college or university.

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Addressing the growing skills gap within software development, local information technology value added distributor, Axiz has sponsored the Rocket APT Challenge and encouraged 39 students to participate in the regional round of the Rocket.Build coding challenge. This comprises 40% of the total numbers of entries received globally. Hosted by Rocket Software and APT Solutions, this annual challenge provides a forum for participants to develop applications on Rocket’s MultiValue platform.

Colleen Becker, Axiz pre-sales engineer, says that the response to the challenge was exceptional and the company is excited to be part of this global initiative: “This is a fantastic innovation challenge that provides students with an opportunity to hone their coding skills on a leading software platform. South Africa is by far the bigger pool of entrants and we are excited to see who is selected for the global Rocket.Build 2019 Hackathon.”

Participants are required to design an app on Rocket’s MultiValue application platform in support of the challenge theme: ‘Improve your Community’. Consisting of three regions: EMEA, Asia-Pacific, and the Americas, three winners from each region will be selected and awarded a cash prize of:

  • $1,000 (USD) – third place
  • $2,500 (USD) – second place
  • $5,000 (USD) – first place

Related: Want To Take Your Coding To The Next Level? Check Out These 7 Productivity Hacks

The nine developers will also be given an all-expenses-paid trip to Massachusetts, USA in June 2019 to participate in Rocket.Build 2019, where they will compete in teams of three to decide the global winner of the Rocket APT Challenge. The winning team will share a grand prize of $24,000 (USD).

Becker says that this is the first year Axiz is participating and the company will definitely register for the 2020 challenge, recruiting of which starts in September 2019: “We are committed to grow the number of young coders on the Rocket platform. There is a global opportunity for students to graduate into a developing industry and support the growing shortage of MultiValue-certified coders. Participants also stand the chance of receiving an internship from participating partners across all industry sectors.”

The Rocket APT Challenge is open to undergraduate students 18 years of age or older who are currently studying engineering, science, or technology at an accredited college or university.

For more information, contact colleen.becker@axiz.com

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SMEs: Have You Completed Your Financial Planning For 2019?

While small to medium enterprise (SME) owners may not have a great deal of control over South Africa’s broader economic issues, they do have control over how they plan and manage their finances, says EasyBiz Technologies Managing Director, Gary Epstein.

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“The failure of many SMEs to make it past the critical 3.5-year mark is more as a result of their inability to get the fundamentals right, rather than being able to deal with issues such as political uncertainty, crime or credit-rating downgrades.

“Several SMEs do not gain an adequate understanding of their markets or the competition they are up against. In addition, failure to manage their finances properly or to access funding and adapt to changes in the marketplace can also be serious hindrances to success.”

Epstein believes without proper financial planning and management, businesses place themselves on the back foot. “Business owners can only make informed decisions when they have a clear view of what is happening with their finances.”

That’s why having the proper financial management tools in place is so important for start-ups and SMEs. “At EasyBiz Technologies, we offer accounting solutions that are aimed at helping businesses manage their finances properly and placing them on a sound financial footing,” adds Epstein.

Tangible outcomes of a good system include increased productivity, reduced monthly expenses, improved accuracy, simplified tax compliance and better financial security. An effective system can also provide critical business insights and allow business owners to make informed and proactive decisions.

Epstein says efficient accounting solutions can help speed up business processes, affording business owners more time to focus on their core processes and growing their operations. “After all, time and money are the most precious resources when it comes to running a small business.

Related: 6 Steps Of Financial Planning

“Our solutions include analysis tools, report making applications and payroll assistance. In addition, income and expense trackers provide valuable information for tax and audit preparations,” he adds.

Epstein urges SMEs to plan for 2019 if they haven’t done so already. “It’s not too late to prepare for the year ahead and, with the financial year end for many businesses looming, now is the time to get a good system in place.”

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