Q&A: Bob Skinstad, Itec Group

HumanIPO: Please can you start by explaining what Itec does?

Bob Skinstad: We’re a business solutions company, so we do everything from managed print services all the way to data, telecommunications, and the management of infrastructure services. So one of the things we’re proud of is that we came out of the old printers and copiers business, in to ICT and … infrastructure for startups or big businesses and we manage a fleet of technicians who service our stuff.

What are the challenges and obstacles being faced both from the startup side and from the view of more developed businesses?

I think that there’s this eternal debate about sales focused businesses, concentrating on profit now and not profit later. I believe we’re in the market for a long time, I’d rather make a little bit of profit for a long time than a lot of profit once, and  for me the biggest obstacle is finding and coaching and working with people who believe the same thing.

The industry has had a tarnished background, there’s a lot of people out there that have been stung by businesses trying to profiteer on them and a lack of understanding of the ICT space. The costs of everything are coming down, things like cloud, VOIP and things like that are all very cost effective, but again the shops in the business are messing people around. So the biggest thing is education of clients, education of our staff about how we’re going to do business.

From your clients’ perspective, what are the challenges they are approaching you with as technology develops, and the move to digital solutions becomes more prevalent?

I think a lot of people are cost oriented and they want to know how to save money into the future. If you believe in various tips and sources, then printing is dying. However companies still need to print so what are we going to do? How are we going to mitigate against that? Those are the sort of questions they come to us with. How do you integrate your costs? How do you manage cost in terms of cost-effectiveness? From your communications all the way to office management and how do you manage it? We specialise in that, so those are the questions asked.

How do you see the whole business environment and marketplace in SA changing as new tech developments come along?

I think it remains something that people want to capitalise on but I see the best businesses going into that space are the ones that are not capitalising so much as partnering with businesses really. I see a lot of the big multinationals are saying we’ll develop facility management or whatever it is and we’ll become experts in that space. So, the environment is starting to steer people towards that, and those are the biggest changes.  

People don’t know what the future’s going to be like. I mean, if you’re selling swimming pools, you could say we’ll put a fountain in and we’ll change the colour of the water, but there’s a limited amount of innovation, and in the tech space there’s unlimited. So for a lot of people I think understanding is one of the things that in the South African environment that we fall behind in.

What are the benefits being reaped by companies as they start to implement tech solutions?

I think a lot of them are seeing new avenues in terms of marketing, social media is a platform that didn’t exist five years ago. In terms of cost tracking and cost management, efficiencies in businesses are changing.

Think about Unilever or another big multinational with 35 lines of products managing the different brands across different countries and different cost centres and now they can aggregate it, and manage it within their own ERP, they can manage their own content management system remotely, and all those kinds of things are bringing costs down.

But its also pulling out the human element, so we’ve got to reach that nice balance in the middle where it’s good for both.

Are you seeing that one particular technology which is having the biggest impact across the board?

I think that big data is huge. We’ve now got the tools to manage meta-data. For us it’s a small middle layer, we don’t manage the reams and reams of information that these other people do but we might manage a big multinational’s printing output; about 70 or 80 million pages a month of what they’re doing, how they’re doing it, whether in colour, 2 sides, should they be printing at all. If you go back with all this information you’re able to tell them what they could be doing differently, so it’s the one area. People don’t realise what’s actually available for them.

Your organisation covers a lot of areas, is there one particular niche which has seen the biggest uptake?

Yes definitely. I think that managed print services and communications. Absa – our biggest bank – their sundries cost in a year is ZAR1.3 billion, which means that’s unaccounted for telephony, stationary, and internal stuff. ZAR1.3 billion could fund 100 startups. So the one thing we sell the most of because of traditional business, and communications, are the two areas we focus on.

What are the pros and cons of businesses having to constantly introduce new innovations and keep up to date?

The cons are understanding and nervousness of change. The pros are the fact that a lot of what used to be traditional hardware stuff is moving to software, so Cisco Systems and those kind of guys have all got big PODXs but they’ve all got  software upgrades. So it’s a bit like you get an operating system, and then you can upgrade to the next one and you’ll be OK. You can use your same old telephone but you’ve got a quality data packet that comes in and upgrades all of your customer relationship management software or whatever it is.

The pros and cons are our biggest learning and how to tell customers what the businesses need when they come to us is an understanding, and a hand-holding through that process. They almost want to outsource.  How do I manage my business it’s growing so quickly? We’re the party that does that so, the pros and cons are good. It’s hard to have all that understanding but if you do have it it’s a big pro.

From your clients’ point of view, what is the biggest barrier to innovation?

I think it’s the understanding but it’s also the current systems. For me, our business should be a huge part of your strategy. You know, when you’re sitting there at the beginning of the year thinking how should I manage my business, then we should be sitting there talking at your conferences.  

People see a lot of what we do is a guy in a snappy suit in a fast car coming in to sell a printer and then walk away, but it’s not like that anymore and I think we’re changing that feeling.

How is the tech boom affecting startups?

Well in our space, we’re able to aggregate costs for startups. A lot of guys go, right, I need an office I’ll sign a three year lease, I need computers, I need… and 200,000 dollars in the hole and they still haven’t put their product out there. And one of the things that we can do, is that we say for a monthly rental, we can give you a capped amount of data,  we can print documents that you need, we can manage a space and give you access to it. So for a couple of thousand rand you can be operating like a big business even though you’re not one yet.

Have your VoIP services seen a strong uptake?

I think with VoIP in itself, the problem has been the last mile. Delivery to the offices themselves. Telkom has been in the ground for 15 years, copper is the biggest way to get to a business. To get more megabytes per second you still need a very fast last mile, whether that’s fibre or satellite.

It’s about understanding that the VoIP product, a lot of them are good, but in South Africa we need to get that over the last mile. We pride ourselves in the last mile.

Do you think the last mile problem is uniquely South African?

I think it’s African. Look, it’s worldwide, but I think in a lot parts of the world, the costs are aggregated by governments which have put in hubs. We’re growing, the big four cellphone companies are doing more and more and getting better quality fibre to business hubs so you don’t have to do that yourself; or even satellite dishes to hubs, but I think the African part of us means we’re definitely behind that curve.

Are you seeing many differences between the different African markets or are you seeing anything which is a specifically South African trend?

I think mobile technology has been huge. Kenya is fascinating. I think the southern part of Africa is a mix, we’re a little bit like what’s happening in Kenya, we’re a little bit like what’s happening in Europe, we’re a little bit like what’s happening intra-Africa. I see differences in all of them, but I think those are going to be addressed by people on the ground.

Do you have plans to expand across Africa, or further?

Yeah, we have 47 offices in Southern Africa and two in the UK. We’re hoping to grow those pretty quickly. I suppose we’re going to concentrate on what works in Africa, but also  where and how in Europe. We’re partnered with some pretty special businesses over there. We think we can deliver in Africa, we think we can deliver in the UK.

What are your predictions for the future of the tech sector, but also for the market more generally in South Africa and Africa?

Mobile is massive, I think we’re going to see tablets and smartphones being used in search and acquisition of knowledge very quickly. I think we’ll see people trusting their cellphone companies more for data and communication. I think we’ll see a lot of online retail, and things like right now we use our credit card as a very separate thing from your mobile phone, but you can merge them and then you’ll have a secure pocket on your cellphone which is your credit card. I think it’s just going to accelerate and accelerate.

I think in the business space people are going to have less IT managers, and more facilities and infrastructure management partners. Because I think the management of those businesses is vital, and that you have someone that knows those areas not just someone who used to procure computers, procure phones and whatever.

Will business go fully online or will some elements remain more traditional?

No, there’s huge traditional business remaining the same. Look at Etsy and those kind of things, craftmarkets, sure they’re online but you’re still going to have traditional business, a traditional marketplace. I think media will open up and be the nexus of the two. If you’re truthful and honest online it’s the same as being truthful and honest behind a counter. The people that benefit from the one will benefit from the other.

Which aspects of business do you think will remain traditional?

I still think that people like to deal with a person, so your user interface/the person who you deal with will still have to have a character. But I think efficiencies will drive what people will use. In South Africa we went through a phase of buying electricity online and it’s actually become easier to do it online that it is to do it in a cafe or a garage or whatever. Now nobody does it any other way than online at home, whether on their phone or what. You see things move all the time.