MEA Strategy 101 – Part III

The challenge with crafting a strategy for the Middle East and Africa is deciding on where to focus. I call it “choosing your Normandy”. If you can work that bit out early and well then it is possible to conquer the region.

Unfortunately entrepreneurs that I meet in the small and medium enterprise spaces in India come with either pre set notions about the region or don’t have a overall buy in about doing business in the region. The Indian IT industry has traditionally viewed the MEA region as a back up when things don’t go right in the US or Europe.

If you have to be successful in the MEA region you have to be seen on the ground as a long term player and an investor. Gone are the days when you could flit in and out and carry back orders in your bag.  So my advice to people is that if you are looking to grab a few deals and then decide about long term viability then MEA is not the region for you. But if fundamentally you have decided to have a longer term strategy for the region, then it makes sense to build the awareness and credibility over 2-3 quarters in key pockets of your target market.

Again deciding on the target market is a function of your offering. Not all the 72 countries in MEA are the same. The GCC Arab nations are affluent but it also means the market is crowded. North Africa is rich for the pickings once things stabilize but at this time the political turmoil keeps the regular business people wary. The risk takers are indeed making money. Western Africa with Nigeria as its center of gravity offers many opportunities that also come with business risks as well as personal risk. East Africa is stable and does offer some opportunity but there is a whole bunch of competent local companies out there and hence differentiation of your offerings have to be strong. South Africa bloc again offers a lot of potential but there are issues of BEE and localization that has to be taken into account. Central Africa is relatively less prosperous but there are pockets that are beginning to bloom.

Having a local partner is key and the ability to judge and select an appropriate local partner becomes critical. If you have been to exhibitions and have had stalls, you will realize that more than 50% of the visiting cards that you will collect will be around local partners. And everyone says that they have influence and have a ready made set of customers. Chances are only 2-3 out of this bunch may be relevant for you and have the chance to perform. Its an art to decide on who could be the right partner for you.

Orchestrating a company entry is much beyond just signing up a local partner. There is so much more – consulates, trade bodies, tax, personal security of your staff and hence insurance, media. Everything needs to be aligned for you and clearly is not conducive to a flit  in and out strategy!

 

MEA Strategy 101 Part II

The GCC countries are an easier place to start when you look at MEA region. And precisely for the same reason, GCC is now a crowded market as far as IT goes.

Dubai is a great watering hole and it pays to be seen in Dubai where anyone who is anyone in the IT world has a presence either at the Dubai Internet City (DIC) or the Jebel Ali Free Zone (JAFZA) or Dubai Airport Free Zone (DAFZA) or any one of the myriad free zones in the Emirate. Microsoft, HP, Oracle, Dell, IBM….you name it and they have a significant presence in Dubai. And being a watering hole there are a slew of events that are held in the city. In the telecom world they could be a 3GSM show or a TMW event or a CommsMEA awards show or one of the many events put together by one or the other technology vendor. All these offer great networking opportunities.

For any company that is serious about exploring MEA on a longer term, my advice for them would be to set up a local free zone company or establish a branch office in a free zone. Again there are many options to choose from. A registration allows you to open a local bank account in the UAE and also grants you a limited number of work visas for your employees. Having a “manager” work visa of the UAE confers upon the person holding it some distinct advantages such as the privilege of procuring a visa on arrival in 4 other GCC countries viz Bahrain, Oman, Qatar and Kuwait. Suddenly travel logistics complications vanish for a sales person.

Likewise UAE does not require a resident visa holder to be staying permanently in the country. You just need to enter the country once every 6 months. Its quite convenient and companies can consider different models of deployment including basing their sales manager in their country and having them travel to cover the GCC region. For India based companies we are looking at a maximum of a 3.5 hour flight from Mumbai in any case.

Bahrain also provides a similar facility to potential business people and could be an option too. Oman’s KOM is another free zone that I am told provides this facility but its difficult to match the savvy of a Dubai or a Bahrain.

The indirect advantages of having a UAE or Bahrain resident visa are manifold. Income is tax free in these countries and any deposits made into accounts opened there will not be taxed in that country. Of course you need to worry about taxation in your base country and comply with all those rules. Another advantage is that you become eligible to apply for visit visas to European and American countries in that country. For people from the Indian sub continent its a huge plus as crowds are far lesser and tenure of visas granted are much longer if applied from either UAE or Bahrain.

Small advantages but can be significant when you are a travel warrior. For companies that wish to be nimble and responsive, it provides a convenient tool to be customer facing at a very short notice.

How I moved Mount Microsoft – an epilogue!

When we started the engagements at Microsoft IDC at Hyderabad we came across several problems related to HR and motivation and this post is about how we went about making small innovations to tweak a services company behavior to service requirements of a products company like Microsoft.

MBT till then was a Mumbai and Pune company, period. This meant that for any other location, we had to provide for travel allowances as per policy. There was no Hyderabad location we could technically transfer associates into. So initially we bore the costs of the allowances for the associates who moved to Hyderabad. We also went about finding apartments / guest houses for people to stay in, because the policy said that after 60 days the daily allowance would stop and it would get into a consolidated one time allowance. And this amount was not really sufficient to rent a house and so on. So to motivate people to go to Hyderabad we went into all this.

Over time, we had close to 30 apartments in Hyderabad. With software engineers there is no end to cribbing. “Oh that flat has a leak.” Or “The fridge in my flat is not working.” to a whole range of admin complaints. With no formal admin oversight of Hyderabad, the salesperson became the fulcrum for every such issue. In due course (read that as 3 years), we decided that it was important to create a help desk for Hyderabad and working with HR and Admin we created one and this helped mitigate the issues.

In a company where BT used to give requirements in the hundreds, there was not much management attention on 50 people sitting at the Microsoft offices in Hyderabad. So in effect, the pressure to perform for the sales team as well as the delivery team was enormous. It was also a difficult job to keep motivation levels up for everyone. After all, the refrain used to be, “why should we be slogging like this, when the BT folks are having a ball of a time and getting promoted too?” It became increasingly difficult to attract people to work for the Microsoft account, motivate them to work at Hyderabad and keep them motivated enough to stay on and not fall for the lure of the easier life across the wall.

In order for the Hyderabad team to feel connected to the mother ships at Pune and Mumbai, I instituted several HR measures locally. We created a Microsoft corner on the MBT intranet site via a micro site and ensured that the larger organisation came to know of their achievements and accolades. Periodic senior level visits were arranged to Hyderabad to address the team and share the developments. Pizza parties and outdoor events were done with regularity. Spot awards and pats on the back were instituted. All these helped to an extent I suppose but it was always an uphill task and required some tremendous motivation and drive from me and other leaders to infuse positivism in the system.

On and off a requirement would come from Microsoft, that they wished to hire such and such person (despite a Non Hire clause) and a raging debate would start internally on “HOW CAN they even suggest this?” The ostensible reason would be that s/he wants to leave anyway, so why not keep him/her in the ecosystem and s/he could become your “insider”. There were no simple and straight line answers to these and I played each ball on its merit.

With folks like CP Gurnani in the senior leadership, there was always tacit but valuable support and appreciation for this work and that did help a great deal.

Over time word got around in the organisation that people that had worked in the Microsoft project were extremely competent and would be a valuable addition to any team. They got snapped up easily and placed in good positions in various teams.

I believe that, Tech Mahindra learnt product engineering related staffing and projects work at some scale through the Microsoft engagement and subsequently did several such engagements including Motorola at Bangalore and Hyderabad which went on to become larger successes in terms of people deployed.

MEA Strategy – 101

The MEA region

Given the spread of the region and the great diversity, its always a challenge to decide on your strategy for this vast and attractive market. I have come across several companies that talk to me with a gleam in their eyes when they hear that I am a MEA Expert. They believe that I carry a magic wand and a ready to deploy Rolodex and bingo overnight they will have lucrative deals pouring in through their doors.

Wrong expectations!

Its imperative that you develop a compelling value proposition and build a competitive strategy around it. Unless this is well thought through and passes the necessary tests, its difficult to carry the offering to the market. One South India based company came to me and said that they do IT services, testing and application development and maintenance and wanted my help to enter the MEA region. To me they sounded like a miniature version of a TCS or Infosys or Wipro – very me too! With such companies you soon get into a price game with the biggies or you compete with local companies which are dime a dozen in every country. I think such companies know this and come to me in the hope that somehow my connections will help compensate for a lack of a compelling value propostion.

Just doesn’t work! As I said I have no magic wand and my CXO connections are no fools.

The other thing that I urge my clients to do is to bring in all the testimonials from their existing customers, preferably in video form. I have noticed a distinct reluctance on the part of the small Indian IT companies to do this. The self effacing and servile Indian nature perhaps, but when I bring up the topic I see frowns of disapproval or some naysayers will say, “But Sir we are barely holding on to the account and there is no way we can ask them for any testimonial now“

Its a difficult job to convince them to believe in themselves and tell them that no customer carries on with regular payments when s/he hates you. Also one needs to realize that a customer likes to show in public that his / her decision to choose you as a supplier was a great one – while in private s/he may make you feel entirely inadequate and worthless. I have found that companies that chose to ignore their own feelings and persisted with asking their clients for testimonials actually got great ones from them!!

These testimonials besides helping win new clients, also serves as a great tool of motivation for the employees themselves who’s self belief rises perceptibly.

Testimonials are a good thing to have in your armory but its not sufficient. You need to have a compelling value proposition that the market will listen to and sit up to notice. How do you develop this sitting wherever you are for a market like MEA? Well this is where I could help by having the value prop market tested through interactions with experts in the region and with partners who’s local knowledge ensures that the company does not make a misstep.

Once this is done, the next step is to carefully select the target markets; which region, which country and which industry vertical? The usual knee jerk reaction is let’s go to Dubai and Bahrain; lets avoid Saudi Arabia and oh BTW Nigeria is a total No. Companies come with some preconceived notions where lot of education is required before we can decide on the go to markets.

Its always best to pick up one or two markets and try and make a success there rather than spread too thin in the first 1-2 years. That’s right, its 1-2 years for the initial onslaught; less than a year if you are lucky and 2 years if you are up against it,but 12-18 months of runway is something you have to budget for.

No miracles here and no magic wands!!

TO BE CONTINUED…..

2012 in review

The WordPress.com stats helper monkeys prepared a 2012 annual report for this blog.

Here’s an excerpt:

600 people reached the top of Mt. Everest in 2012. This blog got about 4,500 views in 2012. If every person who reached the top of Mt. Everest viewed this blog, it would have taken 8 years to get that many views.

Click here to see the complete report.

Emerging Markets no more BRICS in the wall!

Emerging Markets no more BRICS in the wall!

This is a gated link that requires you to register and sign in to download the report. This is a report based on a sample survey of business executives from emerging markets and the analysis shows that BRICS countries are no longer the favorites when it comes to IT spend and that APAC is the new boom town.

Marshalling the troops for doing projects in Middle East!

Marshalling the troops for doing projects in Middle East!