On 12 December 2012, the current cycle will come to an end—according to the Mayan long count way of reckoning time, that is. Opinion is divided on what this will portend. Spiritual enlightenment ? Or apocalypse?
Doomsday scenarios aside, just what are the risks that companies and their boards should be factoring into their planning for 2012?
“In 2011, we felt a certain cautious optimism based on the fact that the recession seemed to be nearing its end,” says Michael Davies, managing director of ContinuitySA, Africa’s leading provider of business continuity and disaster recovery. “However, that now appears to have been optimistic.
The global economy is not recovering as quickly as hoped and our currency continues to be volatile—in fact, on balance, we think that the risks of social and political turmoil have actually increased. The danger is that hard-pressed companies may be tempted to cut spending on business continuity. However, given the risks and the new Companies Act, that’s exactly what they should not do.
“The good news is that the rapid maturation of business continuity hosting is making a much more sophisticated offering available. By tapping into the infrastructure-as-a-service model, companies can now begin to turn business continuity capacity from a dormant asset to one that generates value for the IT environment.”
Davies and his team at ContinuitySA have identified what they believe are the top-10 issues facing business in 2012 that are likely to impact on business continuity strategies.
1. Socio-economic challenges ratchet up a notch
Last year, it seemed as though we might be coming out the recession, but now the talk is all about the dreaded double dip. Economic hardship is exacerbating social and political tensions, especially as retrenchments swell the hordes of unemployed. Too many people without work or the prospect of it places a huge burden on the state, provides the climate for crime and is likely to fuel tension between the haves and the have-nots.
2. Government performance and service delivery still lag behind expectation
Ongoing service delivery and corruption issues have continued to fuel widespread social unrest. Some commentators are even talking about popular uprisings comparable to those that occurred earlier in the year in North Africa. Instability in the ruling party continues to unsettle political and social life, and this will only get worse as the ANC’s leadership conference approaches. Meanwhile—no doubt fuelled in part by the economic problems mentioned above—strikes and social protests seem to be getting more prevalent.
For business, one direct consequence is frequent work stoppages, with staff actually finding it hard to get to their places of work.
“It seems that South Africa is coming to a crossroads again, faced with the choice between the high and low roads,” says Davies. “We have to have confidence that our leadership will make the right choices but, meanwhile, prudence demands a renewed focus on safety measures, including proper business continuity plans.”
3. National infrastructure remains weak—and the middle class is feeling the pinch
While Eskom contrived to come through a very cold winter with relatively few blackouts, concern remains high as summer is the time for planned maintenance. Another concern is the availability of skills to maintain the aging infrastructure at Koeberg, and to operate planned new nuclear power facilities. On the positive side, recent moves to introduce independent power generation and green power into the South African energy market are welcome.
That said, there are worrying reports that lack of additional energy capacity at present is affecting the ability of some data centres to expand.
Other infrastructural challenges include the new toll roads around Gauteng and the new national health insurance system. While both are desirable, they are placing additional financial burdens on the middle class—i.e. the small tax base on which everything rests. Is the middle class coming close to feeling as squeezed as the poor and unemployed and, if so, how will it make its distress known?
4. Water remains a concern
Water security remains a problem in this country, exacerbated by the pollution of our existing water stocks.
Although the government finally woke up to the problem of acid mine drainage and made R400 million available, media reports indicate that little action has actually occurred. If substantial progress is not made in finding a solution, the acid water is expected to begin decanting into the Johannesburg basin in March 2012—it is already decanting on the West Rand. Companies with IT equipment in basements need to remain on high alert.
5. Worsening business climate
The risks mentioned elsewhere will continue to weigh on risk-averse foreign investors, while the volatility of the rand will encourage destabilising capital movements. The socio-political challenges we have mentioned are also taking their toll on the outlook of local business. With the business confidence index declining, investment in equipment and people will be curtailed at a time when they are more necessary than ever. Militant unions and demands for increases that are significantly above inflation are further worsening the business outlook.
With revenues under pressure, many companies will be tempted to skimp on business continuity but this approach is short-sighted.
6. Regulatory burdens and responsibilities increase
Promulgated during 2011, the new Companies Act has made the directors of companies personally liable for the outcome of their decisions. The legislation is new and untested, making compliance even more risky than it might otherwise have been.
In combination with the recommendations of the King Commission, the new act has made risk management a much more important item on the board agenda—and this includes IT risk.
Boards are increasingly accountable to all stakeholders rather than just shareholders. In this regard, environmental issues are becoming more prominent, which may add impetus to the move towards cloud computing, which has the effect of greening the IT department.
7. The sting in the supply chain tail
Recent natural disasters like the volcanic eruption in Iceland and the earthquake and tsunami in Japan have emphasised the flipside of global interconnectedness. In order to ensure business continuity, companies must increasingly consider their entire supply chains. Adequate consulting around the business continuity threats originating outside of the organization is imperative.
8. Cloud computing blurs vision
As predicted, 2011 saw considerable movement in cloud computing. While it’s clear that cloud computing has real benefits, non-specialist public cloud offerings should not be confused with specialist business continuity, which is also making use of cloud-based approaches.
“The need to have absolute quality assurance and security in terms of your business continuity remains, especially in light of boards’ enhanced accountability,” Davies notes. “On the other hand, the greater availability of bandwidth and improvements in technology are changing the model.”
9. Mobility is creating huge new data risks
The growing range of smart mobile devices, and the explosion in useful applications, has made mobility a fact of life. At the same time, there is growing awareness of the value of a company’s data, hence the emergence of “data as a platform”. Securing and backing up the corporate data on mobile devices usually owned by employees rather than companies is raising CIOs’ temperatures worldwide.
10. Business continuity is still not integrated into corporate strategy
Given the scale and magnitude of the challenges business faces, the danger remains that business continuity is marginalised and siloed. In many instances, financial pressures are causing companies to cut back on business continuity. For example, banks which have retrenched large numbers of people now have excess office space which they tend to use to provide their own workplace recovery—and this may lead to a business continuity solution that is less than optimal.
A related issue is that the long-term viability of smaller business continuity providers is looking less certain in this climate. We think this will prompt a “flight to quality” in many cases.
As indicated above, the emergence of new opportunities to remodel business continuity using a private cloud approach is a game-changer, offering cost savings, a much more effective product and the opportunity to get a return on your business continuity investment.
“The outlook is less optimistic than it was 12 months ago, and the ANC’s leadership conference during 2012 will unfortunately distract government’s attention from its real job. On the positive side, companies that understand the risks can plan accordingly—and troubled times also create tremendous opportunity for those with their wits about them,” concludes Davies.
Use The December Shutdown Period To Do Just That: Shut Down
by Greg Morris, CEO, Sebata Holdings
Most businesses – retail and entertainment excluded – resemble ghost towns during the first and last weeks of the year. Energy levels are low in December, and employees daydream about cocktails on the beach. Come January, it takes a few days to get back into the swing of things. Before we know it, South Africa takes another extended holiday in April.
We’re accused of having a “holiday culture” in South Africa. That’s a fair comment. We get 12 public holidays a year, which is more than most countries. And many people use their annual leave strategically in April and December to maximise their time off. As a result, we only really work for 10 months of the year, while other countries work for 11 months.
There’s no doubt that public holidays affect the economy. One extra public holiday in 2011 resulted in an estimated R7 billion loss in turnover. But there’s also a lot to be said for taking time off. And when we know the holidays are coming, we can prepare for them, so employees make the most of their downtime and start the new year on a strong footing.
Burnout is not good for business…
Productivity and motivation are like fuel tanks. While driving, the fuel dries up. At some point, we need to fill up, otherwise we’ll break down. People are the same; we can’t run on empty. Weekends are one thing, but in our culture of always-connected busyness, we don’t get a chance to recharge over weekends. That’s why we need the longer break in December.
A Pulse Institute study found that, when employees are not rested, they experience:
- 23% reduced concentration
- 18% reduced memory function
- 9% increased difficulty in performing tasks
Fatigue-related productivity losses amount to R26,000 per employee per year. Sleeplessness can also result in mistakes and increased absenteeism, accidents, or injury.
Well-rested employees, however, are happier and more creative, engaged, and productive. They get more done in less time than their sleep-deprived, low-energy colleagues.
… but if you’re going to burn the midnight oil…
Businesses often think of December as a slow period that will harm the bottom line. Yes, it can be disruptive and there will be financial impacts. But if you’re going to keep the doors open til the end, this is the perfect time for internal housekeeping. Even the most efficient and streamlined businesses can improve some internal projects or processes.
Allow teams to be inwardly focused during this time, so that you start the new year with less to worry about. Whether that’s planning for 2019, reflecting on what worked and what didn’t in 2018, cleaning up databases, servicing air cons and office machines, connecting with customers over coffee, updating your website, or creating new marketing campaigns, employees can achieve a lot when they’re not focused on the day-to-day grind.
Our best ideas come to us when we’re relaxed and not thinking about them. (If you’ve ever scrawled on the steamed-up shower door, you’ve experienced downtime creativity.)
Make the most of skeleton staff time in December. Host fun creativity sessions that have nothing to do with work. Pay for your people to complete short online courses that will give them skills and motivation boosts. When they do go on holiday, perhaps their new knowledge will result in a major ‘a-ha moment’ around the family braai.
My best advice for businesses that are shutting down in a few weeks is this: shut down. Since the business is not generating income, everything that’s left running – that one employee watching the phone that never rings; that one light left on – hurts the bottom line.
Encourage teams to disconnect. Don’t expect them to answer mails and don’t contact them about work while they’re on holiday – unless it’s an emergency. Block access to mails if you have to, Volkswagen style. Give your people time to think, reflect, and sleep.
When we respect employees’ time and give them freedom to work when they’re most productive, we develop motivated, positive workforces who are enthusiastic about achieving the business’s goals. They work harder to get the job done and, in our experience, actually finish projects ahead of deadline because they want to be able to switch off and go fishing.
Downtime is often seen as wasted time. We don’t take breaks, we eat lunch at our desks, and we work when we’re sick and should be at home. But working longer hours doesn’t mean that we’ll get more done. In fact, it can be enormously counter-productive.
Neuroscientist David Levitin cautions against the “false break”, when we feel guilty for taking time off and compulsively check emails. Napping, daydreaming, and “taking true vacations without work”, he says, is biologically restorative and essential for rebooting cognitive energy. So, if you’re going to shut down, do it properly. The same business challenges will be there when you get back. But you could solve some of them while you’re sleeping.
Seasonal SMEs: Don’t Spend Your Extra Cash All At Once
Save a portion of festive season profits for an emergency fund.
The festive season is a time when many seasonal small and medium enterprises (SMEs) reap the rewards of increased consumer spending, such as additional sales and accommodation bookings from the influx of holiday makers and festive season shoppers. This spike in earnings offers the ideal opportunity for these businesses to save some of the extra money that they make for an emergency fund.
This is according to Jeremy Lang, regional general manager at Business Partners Limited (BUSINESS/PARTNERS), who says that a major risk faced by many businesses is their vulnerability to an unexpected financially-draining mishap such as a big client loss, a lawsuit, or any accident that is not covered by insurance.
“Despite this, few SME owners have an emergency fund in place to deal with such unforeseen events,” he says.
“This is understandable since a growing business tends to require a lot of cash to move forward. Another likely reason for this is because most SME owners are more focused on the immediate practicalities of building their business, rather than on vague risk assessments and planning. By nature, entrepreneurs also tend to be chronically optimistic about the future good luck of their business,” adds Lang.
“However, considering South Africa’s underperforming economy and rising consumer price inflation, it is essential that all SME owners save for a rainy day. Those that have boosted seasonal business have an advantage and should capitalise on this by putting aside a portion of their seasonal profits,” he explains.
Related: 5 Small Business Money-Saving Myths
When saving towards an emergency fund, it is key to set a goal, Lang points out. “A good rule of thumb is to have three to six months’ worth of overheads set aside, but even just one month’s expenses are better than nothing.”
The next step is to decide what constitutes an emergency, he says. “If an emergency fund can be dipped into every time you want to avoid an awkward phone call to the landlord to say that the rent will be slightly late this month, it won’t last long. A true emergency is one that threatens the survival of the business.”
With this in mind, thinking through and writing down a list of possible emergencies that would justify the use of the fund is a good risk-assessment exercise for any business, suggests Lang.
Finally, some thought needs to be given to where an emergency fund should be kept, he says.
“Gambling with the money on the stock exchange defeats the purpose. A money-market account is a better option, but it may be worth considering an account where the funds aren’t too easily accessible, so there’s no temptation to dip into it on a whim. On the other hand, it should not be so inaccessible that you cannot access it fairly soon when an emergency does strike.”
As such, Lang recommends a set of notice deposit accounts with varying notice periods so that a limited amount can be accessed immediately, and some a little later, which allows for some interest to accrue while the money, hopefully, will not be used any time soon.
“However, ultimately the will on the part of the business owner to attain these savings is critically important. The cash demands in a business are so constant that any vague or half-hearted attempt to establish an emergency fund will fail. It will have to be a conscious and disciplined effort by the business owner,” Lang concludes.
Documentary Filmmaking As A Career Is On The Up In South Africa
The Wavescape Surf and Ocean Festival will offer a free Filmmakers’ Masterclass this Wednesday, 5 December to boost several initiatives to position Cape Town as a key film destination and location.
Wavescape Filmmakers Masterclass
- Date: 5th December 2018
- Time: 6:00pm for 6:30pm
- Venue: Invest SA One Stop Shop, Western Cape
- Address: Cape Sun Corner, 46 St. George’s Mall, Cape Town
- Parking: Picbel Parkade, 58 Strand Street, Cape Town Centre (For own account)
The Masterclass, which is presented by Wesgro and aimed at aspiring filmmakers, producers, film students and those in the film industry, will focus on what it takes secure funding, produce and distribute a documentary film.
The documentary genre has seen a resurgence in popularity, owing in part to increased accessibility via the growth of Video On Demand platforms like Netflix, and an audience response to ‘Block-buster fatigue’ which has seen renewed interest in the documentary format and meaningful stories that reflect the nature and reality of our present lives.
The recent launch of F/LM Cape Town – a joint initiative between the City of Cape Town and the local film industry to promote the City’s amazing locations, diverse talent and world-class infrastructure – solidifies Cape Town as a world-class centre for filmmaking.
Besides its raw natural beauty, the city is rich in culture, diversity and heritage, which offers filmmakers an abundance of content. Curator of the Wavescape Masterclass Christopher Mason, who is co-director of Mason Brothers’ Films, said that you were halfway there if you had a good concept: “These days anyone with a unique idea, a DSLR camera and a laptop, and enough desire can be a filmmaker. The trick, of course, is understanding how to get your foot in the door in a very competitive industry.”
“What makes a good documentary and how does one become a good documentary filmmaker? How has the genre evolved and what are the possibilities for young South Africans interested in the genre? The Masterclass aims to give aspiring filmmakers the answers to these and other questions,” Mason said.
From developing a good idea into an award-winning film; to funding and distribution models; and case studies on the best this genre has to offer, this year’s masterclass aims to provide filmmakers with an immersive roadmap to success.
Steve Pike, co-founder of the Wavescape Surf and Ocean Festival said that the platform laid by F/LM Cape Town and initiatives such as the Wavescape Masterclass could help boost the already booming film industry, and thus reduce the 27.5% of South Africans who remain unemployed. The Wavescape festival, and in particular the Masterclass spoke directly to the F/LM initiative, Pike said.
“Cape Town has it all: Amazing scenery and epic locations for adventure sport. Our festival is a key platform to showcase Cape Town as the Adventure Capital of the World while also celebrating the wild ocean and raw beauty around us.”
The CEO of Wesgro, Tim Harris, said that in the 2017/18 financial year, Wesgro’s Film and Media Promotion Unit “managed to secure nine declarations to creating 2,499 full time equivalent jobs – this shows the potential for job creation in this sector”.
“There are many job opportunities in the film and media industry due to the breadth and depth of skills required across the value chain of this fourth industrial revolutionary industry,” he said, also highlighting massive potential for the cutting edge gaming industry.
Several top speakers will talk at the Masterclass, including Jolynn Minnaar, an acclaimed documentary director; Cliff Bestall, who made16th Man for ESPN 30 for 30 (produced by Morgan Freeman); Karen Slater, a Director / DOP in Sisters of the Wilderness that is eligible for an Oscar; Khalid Shamis, editor of Strike A Rock; Liezel Vermeulen, producer and film finance expert; Izzette Mostert from the Documentary Filmmakers Association; and Monica Rorvik, Head of Wesgro Film and Media Promotion Unit.
Parking at Picbel Parkade, 58 Strand Street, Cape Town (For own account), refreshments will be served.
Please visit http://www.wavescapefestival.com/wesgro-blue-ocean-master-class/ for more information.
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