Banking on Technology


Global enterprise software maker, SAP AG (Systems, Applications and Products in Data Processing) recently made its latest venture into Ethiopia, targeting the Financial Services Industry. Capital’s Elias Gebreselassie caught up with Anthony Njua, Financial Services Industry Advisor for SAP- East Africa, to discuss with him a range of issues involving the company’s innovative software products and solutions and why it made Ethiopia its latest destination to market it

Capital: Could you briefly describe SAP; its mission and your interest on Ethiopia?
Anthony Njua:
SAP is an acronym for Systems, Applications and Products. We’re the largest business software company in the world. The company was originally registered in Germany in June 1972; therefore, it is 40 years old and is listed on the London (LSE) and New York (NSE) stock exchanges. Our turnover is about 16 billion Euros as of 2012.
SAP started to get interested in Ethiopia in 2008. We came here then for the first time and did road shows. However, we didn’t establish any presence at the time; nevertheless, from 2011 onwards, the SAP Africa office decided that Ethiopia was a key market and we needed to have a presence and committed ourselves to do just that. On this particular trip, we have come to present our financial services partners, which are USI-Ethiopia, Fairfax and technobrain, three large companies who are well known and have the capacity to market our products and our solutions. It is part of our business strategy and model to use local entrepreneurs to allow us entry into the market.
Capital: What would you say is the current state of application of advanced technological solutions and products by the financial services industry in Ethiopia?
Ethiopia has come a long way, if you ask me. The financial services industry in Ethiopia has just gone through its core banking revolution. Banking institutions are modernizing through the National Bank of Ethiopia’s (NBE) directive, which has managed to move Ethiopia to the modern age of banking. Now, it allows the banks to offer totally different products to its customers. Through the current banking platforms that are now available, you can do internet banking and mobile banking where you are able to offer a lot more services to customers. At the end of the day, there is a lot more penetration for the banks and customers, so the uptick for technology services has been phenomenal. For us at SAP, we believe the country is ready to go to the next level. The first level has come to pass, which was the automation of the entire banking system, but your backend still needs automation, and also the introduction of new products. Therefore, we’re here to offer our services and products for mobility, real-time banking and business intelligence, which are the next level of banking. Capital: Could we say that the facilitation of technology, and in this case application software, in developing nations can be made at an affordable price? And do you believe the capacity in this nation is up to the level of skills and knowhow needed to operate such software?
Yes, definitely. I can say that the financial services solutions we’re offering to the Ethiopian market are quite affordable. There is nothing that is out of reach of local banks as we know the kind of money that has been spent on core banking solutions already, and our solutions cost far less. Still further, through our partner pricing model, we have made sure that there will be local components which are part of the integration. When these solutions are being offered to a bank locally, using local employees and local teams to do it, makes it a lot easier and a lot more affordable for the banks. We are working very hard at SAP to ensure that our partners are empowered through the skills and knowledge required and we are providing them with all available resources to reach the level where they will be able to do the implementation. If implementation is done locally, the pricing will be at market value and will be affordable for local banks.
Capital:  In a country such as Ethiopia, where much of the economy is closed and key institutions are still in the hands of the state due to a weak private sector, can we say innovative ideas and applications can be effectively handled and used at the present time?
Yes, I believe it’s possible. You might think that Ethiopia is a closed economy, but if you look at the financial services sector, NBE has been very progressive and they are the ones who have actually opened the door and led the way for the introduction of technology solutions that have occurred in the market. NBE has been instrumental in making sure that the solutions are in place and they are becoming more in line with what consumers are asking for. There is of course always room for improvement; mobile banking and agency banking are key areas where there is room for the economy to open up. By the way, we are not suggesting that its only foreign banks that should come and should do these things and that’s not what we are asking for, but the solutions can be introduced to local banks and they, in turn, can make the products and services available to future customers.
Capital- What has been the level of interest so far, in your application software, from local companies?
As I mentioned earlier, we are entering the market through our local partners and the interest has been quite amazing. I’ve seen banks which I thought would never make it actually attending our functions and I was impressed by the caliber of people who have turned up for our presentation. Bank presidents, vice presidents and other banking officials are all interested in what SAP has to offer. Our local partners have good contacts in the local market as well and they have been providing services to these banks.
Capital: What sectors have you identified in Ethiopia that could potentially be prominent users of your software solutions and products? 
SAP provides industry-related solutions to 24 different industries, ranging from financial services to manufacturing, the agricultural sector, the airline industry and defense. Pharmaceutical and chemical industries also avail themselves of our services, including hospitals. SAP solutions have been implemented by the national flag carrier, Ethiopian airlines, and the huge cement factory, Derba Cement. These are the two areas where we are making progress and we have made applications and entered bids to provide local banks with innovative solutions. Therefore, we can offer solutions in any of the 24 different areas for whom we have specialists and special software.
Capital:  Each day, huge financial and government institutions are subjected to cyber attacks and the theft of financial and other sensitive records by hackers. What would you say are SAP’s abilities and software capabilities in halting or preventing these types of dangers that can seriously jeopardize the workings of institutions, especially in a country like Ethiopia where the knowhow and facilities for combating such occurrences is comparatively lower than in other countries?
Now that is an interesting question; I believe it strikes at the essence of why SAP actually is an ideal partner for businesses and institutions in Ethiopia. We have a very stable platform; to start with, our solutions are based on user platform. We use different coding systems, but a lot of it is secured, because of our net user platform. The next thing is, where else can we apply security settings. If you look at the mobile solutions that we offer, they are all protected through a secure system we use for all our mobile applications and devices. It allows you to control whatever goes into the device and what comes out of it. Even as we offer our solutions to the market, we try to be very careful that we provide solutions that will not be hacked and are very secure. SAP gets 10,000 hits by hackers every day, but our systems are secure enough to be able to stop them advancing; therefore, I believe we do have a good platform. More needs to be done in terms of security through innovations that can secure critical information more and more. But from SAP’s standpoint, we can provide you with services that will be able to do it for you.
Capital: Specifically, how do you expect your local partners to fit in your model or strategy?
Part of SAP’s strategy for growth within Africa and around the rest of the world has been through partnerships; it is what we call an indirect model where SAP doesn’t introduce its products directly into the market, but does it through its partners. Basically, it’s two-way traffic, and it really makes good business sense, both for SAP and for our partners. In our case, it allows us to move our software a lot faster. Selling using one person isn’t the same as selling using three.
For example, to enter the Ethiopian market, if we were to set up our own office and launch our own solutions and products, we would be acting as one person. However, when you have three partner companies doing it, they would be acting as three different people and it makes a lot more economic sense as you are able to move your goods much faster.  The second aspect is that we believe a lot in empowerment, allowing more and more people to become aware and familiar with SAP software and making it readily available to the community at large. The more people know about SAP, our solutions and products and what we can do for them, the better it will be for us. Therefore, the best way is via partnership networks.  In the case of our partners, it is quite a lucrative venture for them as well, because they get discounts on the software as well as collect consultation, marketing and implementation fees for their efforts in making the solutions workable and usable by the communities and customers who buy from them, for which they will provide first level support. Eventually, and I see it happening sooner rather than later, we will become a regional hub headquartered somewhere in East Africa [that place could well be Addis Ababa], depending on how well we do within the market. By then, our partners will be able to provide support for all our applications, i.e. second or third level support. The best thing we have learned is to replicate success: if it works for one economy then it should be able to work for another economy, with customization of course, and an understanding of what the local economy has in store. Your market is a lot bigger, and the opportunities are considerable, because a lot of the companies you have here haven’t reached the same level of technology and also haven’t adapted to the technologies we have yet; so I think it’s a good time to be here.
Capital: Any Last comments?
The last comments I want to make are with regards to SAP. As a brand, is top notch; our software solutions are unmatched and  unparalleled in the entire industry, whether it is in applications, mobile industry, database technology or in the cloud computing business, which is where everything is moving towards. It’s a well-known fact. We’re not going anywhere and we don’t set up shop in markets where we don’t intend to stay.