Samuel Ssettumba (SS) sat down with Mustapha Bernabas Mugisa (MBM), aka Mr Strategy, the Team Leader at Summit Consulting Ltd to discuss how Small and Medium Enterprises can win through digitalization. To watch the video, click here:
Below are the excerpts:
SS: What does digitalization entail for an SME?
MBM: To digitize entails using electronic business and electronic commerce and online tools to run the business. Digitization transforms your business to become more agile, nimble, and efficient. The starting point is to adopt digital records management and reduce time wasted in tracing up documents and invoices. The next phase is to install software to capture day to day business transactions. For example, when you install an accounting system to capture all your daily sales and expenses you ease your financial management practices. Then you can install a system to manage your human resources. Another to handle stock management etc. As you mature, you could install an enterprise resource management system that combines all the systems in your business into one – thereby leverage from full automation and integration. A more advanced system links the internal systems with the external systems of suppliers and business partners. For example, you can access your supplier’s systems, place orders which are updated into your ERP automatically thereby saving you time.
SS: With the Covid-19 induced crisis what are the possibilities for digitalization (as in how far an SME can go?)
MBM: COVID-19 has fast-tracked digital adoption. Companies that have failed to respond, have lost. For example, DHL has launched a fully-fledged online shopping like Amazon or Jumia to respond to the new normal. Now when you visit the DHL Africa website, you are prompted to download their app to do shopping from different retailers and wholesalers of leading brands. As a logistics company, they have evolved to leveraging from their strategic core to win. When you shop from Amazon, the order is fulfilled through DHL or any other logistics company of choice. Now DHL has also created a platform where customers can buy from any vendor but only get fulfilment for last-mile delivery through DHL – this increases revenue and is a great response to the likes of Jumia and Amazon.
You expect that Posta Uganda must transform likewise. To create an ecosystem business model. The traditional model of waiting for people to send parcels or documents has been overtaken by the times. Now with a country-wide presence, Posta Uganda strategy must be creating a digital platform where selected vendors across the country can log to the Posta Uganda and list their products on the digital e-commerce portal, and whenever one buys, Posta Uganda delivers and assures order fulfilment. The ability to use technology that way is what digital transformation is all about. Actually, by now Posta Uganda would be getting all farmers to produce to the market by removing the middleman and negotiating directly with farmers.
At Summit Consulting Ltd for example, we had to let people chose where to work from – home or at the office. And this enabled us to reduce our floor space rental costs. Now we are working around the clock to deliver our training online. The point is, business is about evolution. You cannot keep a rigid business model and survive.
SS: What are the risks and how can an SME protect itself against the risks?
Every time you enter your car, you become exposed to the risks of a car accident. Someone could knock you from behind or you could have a flat tyre. If you are brilliant, you anticipate such risks and attempt to manage or mitigate them. For example, you buy insurance in case of a car accident or theft such that if your car is lost for some foreseen reason, your insurers would replace it. However, if you had not bought insurance, you take the loss. You may never recover. Also, to avoid flat tyre while on the road, you drive a serviced car which his in good working condition. Of course, you also don’t drink and drive.
The same thing happens with business digitalization. If you invest in e-commerce or an enterprise resource planning system or just an accounting system, you expose your business to many risks of data loss and cybercrime from insiders or outsiders. You must take precautions.
The first is accountability. Who accesses what and for what reason? We call it RACI – responsible, accountable, consulted, and informed. You want these people to sign somewhere to acknowledge their roles through ongoing training. And of course, investing in tools for real-time monitoring. If your IT administrator has access to your critical servers and core business processes like financials, you must surely do a thorough background check on such people, know where they come from, their parents, teachers, villages, and also insure them as your key men. And that is not it. You must make them sign to acknowledge the user credentials in their possession and their responsibility to handle such accesses with care. Even more, you must restrict the times they may log into the system. If for example, your IT manager uses their username to log into your core system at say 3 am, as the business owner, you must set the system to send you a notification for such abnormal time access so that you can check in real-time.
That is what trusting after controls are all about.
Left to their own devices, people we trust will abuse the trust. And the cost could be catastrophic. Trust after controls.
To watch the video, click here:
By Mustapha Bernabas Mugisa, aka Mr. Strategy is Team Leader at Summit Consulting Ltd, www.summitcl.com.