Founder and Group Managing Director,
You are the founder of
What actually propelled the business growth?
Yes there is tremendous growth in our business, but I think the first thing is to learn through experience, innovation and intuition. Intuition is basically what you cannot explain when you are at the right place at the right time. Innovation is also important because everything works for a while, and thereafter, things could change. Before now, everywhere in
There was a time when there were travel agencies everywhere. Now you can book your flights directly on the Internet. To remain in business, travel agencies need to innovate. At CWG, innovation is our passion, and it has, among other strategies, kept us in business. That was why we came up with CWG 2.0 platform.
CWG started as a Dell PC supplier and supporter but today, everybody can buy Dell PCs and maintain them. So, we now went into what we call 'Enterprise System', which is big data for banks. Even today, everybody can do that as well. The next step we took as a company was to go into managed services, where, as I talk to you, we have over 100 people that resume and close at MTN work places as if they are MTN staff, but they are employees of CWG, handling Managed Services for MTN.
They supervise all our clients' Information Technology (IT) facilities. They are the ones that enable all the calls we make as telecoms subscribers to work. They work in the data centres and today, we are taking some steps forward by discussing cloud computing, putting software as enterprise solution to use. That becomes the purpose but the issue is in helping to reduce IT expenditure for businesses, in order to better the lots of entrepreneurs.
I see this as future investment, but under what class of investment would you categories it?
This could be categorised under social impact investment. If out of the 17 million registered
From the service we offer at CWG, money making is not our sole objective. We are in business to make social impact investment, which will eventually spin into money making ventures. So the secret in business growth is innovation.
I will give you a good example:
Another example is the Research-in-Motion (RIM), makers of BlackBerry smartphones, which latter rebranded to BlackBerry. At a point, Blackberry was the only mobile phone that could offer e-mail services. With such service, you could take a picture and e-mail it and then, the company added the Blackberry Messenger and later stopped innovating. The truth is that Blackberry stopped innovating and that was how it started dying. If CWG had stopped innovating, it would have gone into extinction long ago.
Dangote started not as a manufacturer, but as a trader who buys and sells. But at a time, he started manufacturing sugar and cement and today, Dangote has innovated itself into one of the biggest companies in
CWG recently built and opened its Tier-3 data centre in Lekki,
We actually got the idea of the data centre, first for our old products; which needed to be hosted in a data centre. Then after that, we had more space and we brought in other companies to collocate with us and when we did that many major companies showed interest.
We had FirstBank Mobile Money that we are hosting and we had
So, what we have is a 50- rack capacity data centre, which can, at least, take a space of seven banks to be collocated with just the cost of cooling of power and so on. We now discover it was a brilliant idea because they were now buying into it. That was why we opened the data centre, but the primary reason was because of the SME/ERP I have described. It is a state-of-the-art data centre because a lot of life-saving businesses are put in our hands. Most people have not seen the
Why is the data centre described as
It is Tier-3 because it presents a global standard. For instance, it has two authentications for security. It has precision Air Conditioners and the data centre has power from two independent sources so that if something happens to one power source, the second takes over to prevent downtime.
As I speak, we have five generators that feed two
More importantly, if you want to do something for your country or leave a legacy or footprint in the sands of time, you need to have passion for what you are doing, because you are not only making profit but also serving the people, and that really fertilised the birth of our data centre project.
We launched the state-of- the-art CWG data centre by the special grace of God and our special guest was Dr.
So, for the banks, the data centre will help them in disaster recovery, but for others, it would be their primary data centre.
Where is the backup data centre located. Is it in
We have the
This is necessary because if anything happens, we would scale over to
Who are your existing and prospective customers?
As I said earlier, we have First Bank Mobile Money and
We also have interest from insurance, banks and technology companies. We are not actually marketing because the first rack is filled already. As I said, it's 50-rack and once it's taken, then it's full and we have to build another one.
You recently got listed on the
I think the most important thing to us is succession. If you look at many Nigerian businesses owned by individuals, once the founder passes on, the business collapses. But we have had the situation where the CEO of GTbank passed on and there was a smooth succession perhaps because there was governance. It was listed and global standard was guiding it. There was no fighting. So, for us, the first thing was succession, saying we have had an entrepreneurial business for 21 years and we need to institutionalise it into a corporate organisation that is global with many shareholders controlling it and not just one small family controlling it. That is what really informed the decision.
But secondly, you would see that companies on the stock exchange are open to more scrutiny and they are also open to more governance. They have to put their forecast out there and they would have to say why they don't meet it. And if the shareholders don't like what is happening, they punish it by dumping its shares and the share price goes down and this will touch the company directly in its pocket. So, at the end of the day, it also makes us more cautious and play by the rules because we know that we are being watched, not just locally but globally.
So we can't even afford to have any scandals or governance issues. That makes us highly accountable, and accountability also builds trust in people.
People believe more in a listed company and do business with it. We were able to attract foreign partners and local customers and the last one, of course, is that getting listed gives opportunity for liquidity. The shares are listed and it's not just a list of papers in your pocket, it is currency. If you have 100 shares at N6, that is N600. So, it is no longer paper, it is money. Also, when you want to do all these projects a I have earlier talked about and you want to raise money, it becomes easier, because if you were able to convince the
Some technology companies that were listed in the stock exchange are not doing well and their shares are not attractive, and some are even out of business. What strategies have you put in place to avert such ugly situation?
The poor performance of earlier listed Information and Communications Technology (ICT) companies is due to a lot of factors, but you should know that the world is full of factors. There were factors yesterday, there are factors today and there will be factors tomorrow. So, it's not enough to say there are factors. The issue is that they are all back to the nominal value of 50 kobo. As I said before, it still boils down to your being happy in your state of comfort and not innovating.
These companies are basically one-legged companies. It is either they are hardware company or software company or they are technology companies. But what we have at
That one-stop-shop helped even when Nigerian banks were consolidating in 2005. People bought our Finnacle software, which processes about 65 per cent of all banking transactions. They could get their banking software from us, their hardware and the communication links. So, it was simple, we could do an implementation between six months or less. Their hitherto banking solution providers were doing 18 months or less, that is why every bank is now obtaining from us.
What profit margin do think shareholders of your company would be making from their shares?
When we went to the market and rang the closing bell, we traded only for 15 minutes. Before we rang the closing bell, in those 15 minutes, 100 million shares were sold and it has already touched the 5 per cent uplift thresholds. We started at N5.48k and it reached N5.95k.The next morning, it went to N6.00 and the interesting story is that we started with
Some people bought our private placement shares in 2009 at N3.40k and the day of listing, the same share they bought at N3.40k was sold at N5.48k. So, I feel that if we continue to do these things I am talking about, in the next five years, those that even bought at N5. 48k would probably be looking at a minimum of times two. That is why we believe we are not going to go in that fashion of those ICT companies that have been listed before us and are not performing well today.
You earlier talked about innovation and specialisation. So what aspect of technology solution does CWG specialises on?
We said we won't be everything to everybody but we are going to focus on the sectors such as telecommunications, banking and finance as well as oil and gas. Look at what happened in
Again, we put all these risk management business strategy in place to give the shareholders comfort and the strategy also gives our staff comfort. Our business e told ourselves and then went to
Again, we put all these risk management business strategy in place to give the shareholders comfort and the strategy also gives our staff comfort. Our business is a people business and people know that CWG is good and they come to us to safeguard their businesses.
What level of skills training is CWG involved in?
We create an academy where we train 200 people every year. It is not as if it is a school where you have teachers but these are people that are doing the work. They do more of practical work after one or two months in class. Otherwise, we would have been grounded. It makes no business sense to have all the ideas and you don't have trained people that will carry out the job.
We moved from hardware business to managed services and we are now looking at cloud computing that I earlier talked about.
How would you assess ICT Growth in the country?
Well, I think we need to measure the growth in the industry with respect to Gross Domestic Product (GDP) growth. In 2010, the ICT market was about
But the question is: Are we on course to achieve the
In terms of GDP contribution, Nigeria GDP today is about
Do you think this is achievable considering the nation's prevailing economic challenges?
The challenges are known and are being resolved. The major challenge, if you ask anybody, is power and once that is solved, you will be surprised how the economy will take up. Even small business such as vulcanising, hairdressing and barbing all rely on power. So, our businesses rely on power. If I tell you the amount of power that is supplied to IT companies, you will be surprised at that. If we solve the power issue, which is on the verge of being solved, then, we will have more small and medium enterprises springing up.
Today, there are 17 million micro small and medium enterprises that cannot access bank loans for two reasons: They do not have transparent books and they do not have collateral. So, when they go to banks for capital to invest in their businesses, the banks cannot give them because the banks are spending people's money and they cannot loan out such money when they are not sure the money would be paid back.
How best can the banks address these issues you just mentioned?
The issues have already become serious challenges to banks. So to solve them on behalf of banks, CWG, as a company, has launched CWG 2.0 technology. The CWG 2.0 is to tell those 17 million companies that they should not bother to buy their own computer systems to do their accounting because this approach is very expensive to buy and run. So, just like
With ERP in the cloud, it means the ERP system is going to sit in our data centre and businesses can subscribe to it to do their accounting, inventory, access management and so on. So, automatically, as a business owner, you then have enough time to concentrate on your key business operations. Also, with the ERP and at any point in time, your stocks and sales, are being managed so that when the banks comes and look at your books over the last three years, they would know exactly what have been going on. Invariably, we have solved the problem of transparency of books with the CWG/SME ERP, as we call it.
So, how can the second issue on collateral be addressed?
Yes, the next problem that needs to be solved, as I earlier said, is the issue of collateral. If the banks ascertained that the SME books are clean, how can the banks lend money to them without collateral? To address this, we are saying directly to the government and its agencies such as the
That way, all entrepreneurs will benefit from this small money and it will be sustainable. If you take N9 billion and share among 17 million businesses, how much will each person get? Of course, it is a little money. For me, this one is a already big problem and if they now had to add the challenge of power to it, what then do you think would be left for them to run their businesses? Aside the loan, they also need broadband because, they would need to take their businesses on the internet for wider customer reach. The reality is that, just like Jumia and Konga, all businesses need the internet to enable other people to do business with them. They do not need to maintain a big shop.
By so doing, you will start witnessing growth among the 17 million SMEs. For instance, if 10 per cent of them is able to bring themselves to a point where banks can invest in them, then that is about 1.7 million people or companies and out of these, if we are able to take 10 per cent to become companies that could be listed on the stock exchange, the equivalence of that will be 170 companies.
Currently, records show that there are about 200 companies listed on the
So, we at CWG believe that instead of having 10 billionaires, it is better to have a thousand millionaires, or, better still, have a million people with
How would you advise government on ICT growth in 2014?
Government should get out of business. Government should be a regulator. I have said it in many fora. If you have a government company that is competing with private sector, it is an unfair advantage that will be on display. If I want to do business, I go and borrow money from the bank at 21-23 per cent interest rate. At what interest rate do think Galaxy Backbone, a government parastatal borrows money? It is being funded with public fund by government. So, how can I compete with that kind of government company?
When it wins a project, it says it has won a project, but in the actual sense, they have not won the project, because it was only given to them. If I was running Galaxy, I will win all governments' projects. So, government needs to get out of the business where private sector is running. There are some places where private sectors are not operating. If you take for instance the
Government should only do business in the situation or area that is not ripe for commercial viability. If it does that, you would see that everything will be going on fine. Come to think of this: Why is it that we don't have a government portal where we can do business with government? I think government should put services onto the portal so that citizenry can secure their drivers' licence, pay their taxes, their utility bills, secure passport online and also register their companies online instead of spending three nights in
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