As a niche market enterprise, Sekunjalo TSL provides effective information communication technology (ICT) business solutions and services that enhance business performance in government and corporate customers. Sekunjalo TSL comprises businesses that are leaders in their respective niche markets, have solid client bases and achieve high levels of sustained organic growth.
Sekunjalo TSL offers a range of ICT solutions well suited to the health care industry, hospital information and laboratory systems, pharmacy information systems. This is backed by the necessary professional services such as consulting, technical expertise, professional services, system integration, engineering of bespoke solutions, business intelligence, software development and engineering. Included in this sector is mobile inspection management, mobile field service, property inspections, franchise evaluations, cloud solution architecture, mobile banking and commissioning. Digital marketing, digital content redistribution for the publishing and media industry as well as commercial, industrial and agricultural solar PV solutions are included in this sector.
Sekunjalo TSL companies have international partnerships with leading technology suppliers, including InterSystems Corporation, JAC (UK), Microsoft and Fujitsu Computers.
2016 OPERATIONAL PERFORMANCE
The Sekunjalo TSL Group is in the Top 3 ICT integrator in Africa and holds 25% of the market share in the public hospital sector. They have developed their in-house hospital information system as well as long-term Value-Added Reseller Agreements with international partners. They have an exceptional track record with successful implementation in hospitals and laboratories across the country as well as servicing blue-chip clients.
Despite low economic growth, the Sekunjalo TSL Group’s performance was ahead of budgeted expectations yielding a 15% increase in operating profit. With the completion of the laboratory implementation in one of the business units during the financial year, they switched to maintenance income for the remainder of the year. This will continue into the next financial year with sustainable annuity revenue being generated from their Service Level Agreements.
VISION 2020 VISION – SEKUNJALO TSL DIVISIONAL CONTRIBUTION
In 2015, the Sekunjalo TSL Group aligned is strategy in terms of Vision 2020 Vision by setting strategic levers, goals, activities and milestones with clear deliverables for each business unit.
As part of Sekunjalo TSL’s Vision 2020 Vision, they aim to unlock shareholder value through listing their IT assets.
The Sekunjalo TSL Group is on track to achieve its strategic objectives and milestones. During the year under review, progress was made against its strategic objectives and target areas.
2016 Achievements to date include:
- Penetrated the African market outside of South Africa, with the implementation of Laboratory Information Systems in Tanzania and a procuring a consulting engagement on telemedicine in Ghana;
- Extended business outside of South Africa by signing a support agreement on health care solutions in Dubai;
- Raised the profile in the South African Public Sector by working with the Council for Scientific and Industrial Research on integrating patient data at national level in preparation for the National Health Insurance;
- Embarked upon a modernisation drive for existing systems in the Western Cape to ensure longevity and sustainability of systems;
- Formed a joint venture company to market state-of-the-art telemedicine solutions as part of the strategy to expand on its product range and services;
- Developed and sold new products which include rail tracking solutions and mobile applications;
- Constantly achieved more than 95% compliance on Service Level Agreements with customers;
- Improved processes and procedures improved resulting in increased sales;
- Controlled costs on project and supply chain management;
- Further expand into Africa – entrenched as supplier to African subsidiary of a major mobile operator – achieved in Cameroon, Ghana, Zambia and Uganda;
- Renewal of key contracts at major customers and expansion of footprint to increase customer base across the IT Group;
- Closed Rail Tracking Project for customer in the petrochemical vertical;
- Reinvested in new and existing product development associated with digital publishing; and
- Ongoing roll-out of digital transformation of print sales team at major publishing Group.
PROSPECTS AND FUTURE OUTLOOK
The Sekunjalo TSL Group is very successful at retaining its client base in the long term and its established foundation has set the platform for future business growth. These strategies have paid dividends and are a cost-effective way of providing a short- to medium-term source of income and growth and remain an integral part of their core strategy to develop new opportunities.
Acquiring and developing their own intellectual property is a key strategic focus area, will ensure better margins with resulting profitability. Increasing revenue is generated through the launch of their own products and services into local and international markets. By extending their footprint into the South African Public Health and Private Sectors and replicating their successes in other parts of Africa, this will ensure the sustainability of the Sekunjalo TSL Group’s businesses. As a medium-term opportunity provide implementation services to first-world countries such as Australia and the UK. Opportunities are actively pursued to increase their market reach through partnerships and are culturally aligned with complementary businesses.
The future outlook for the various business units are as follows:
- Reducing dependence on the South African economy by investing in structures to expand activities into Africa. This strategy is aligned with the concept of South Africa being a gateway into Africa with the intention of using the most appropriate South African and imported products to meet the needs of their customers in Africa.
- Increasing the amount of business in the private sector and other African customers in order to spread the risks arising from slow and erratic payments by government customers as well as the long intervals between issuing of tenders for large new ICT projects.
- Continued organic growth coupled with acquisitive growth of complementary businesses and the acquisition and/or development of additional products.
- Rewrite of InspectionOne Mobile in Android.
- Ongoing roll-out of digital transformation of print sales team at major publishing Group.
In the medium term:
- Providing products and services into selected African countries;
- Acquiring and developing their own IP;
- Increasing annuity revenue through the launch of their own products and services;
- Creating search engine marketing;
- Creating new product opportunities to existing clients;
- Tailoring their software to be globally competitive;
- Launch initiatives to feed their renewable energy solutions provider; and
- Increasing market reach through partnerships and acquisitions.
In the long term, Sekunjalo TSL needs to ensure that it remains relevant in its various sectors by investing in research and development. Providing niche products and services into selected African countries is seen as a major opportunity. They intend to grow their renewable energy solutions provider business and to position the Company as one of the leaders of renewable energy solutions providers in the country.
The Sekunjalo TSL Group has a service delivery footprint in all the cities of South Africa and has expanded into the UK, the USA, Dubai, Tanzania, Ghana, Nigeria, Zambia, Uganda and Cameroon.
Through their various business units, they work closely with the following brands:
- InterSystems Corporation who is an internationally renowned manufacturer of Database Technology and Health IT solutions;
- JAC Medicines Management is a world leader in the space of Medicines Management Software with large implementations across the UK;
- British Telecoms South Africa – project completed in Ghana; and
- SYSPRO ERP Software – implemented in the Western Cape.
Detailed information about Sekunjalo TSL Group’s business model, stakeholders, risks and governance is available on the website at www.aeei.co.za.
Sekunjalo TSL’s business model continually seeks innovative ways to sustain its existing businesses by adapting to changing environments through their acquisitions and new business development approach where at its core; there is a social contract for responsible business between it and society.
This enables Sekunjalo TSL to add value through their extensive expertise and networks, while promoting an entrepreneurial culture within its various business unit structures and employees. Their businesses become efficient on a sustainable basis with some of the businesses working on a retainer-based and consultancy services approach while generating revenue and cash flow. As part of their services to new investors they provide solutions and ancillary services.
With Sekunjalo TSL’s risk management approach and the impact of changing markets, competitors and the economic environment, management is constantly aware of how they can improve sustainability through constant change. In addition, they consistently broaden their market opportunities by diversifying services in order to spread the risk.
Through the application of policies and structures within the AEEI Group, the Sekunjalo TSL Group complies with all sound governance and regulatory functions and has had no reported fraud or deviations in the application of these principles in the current period. The continued training and exposure of employees to the ever-changing regulatory environment and regulations of the Companies Act ensure that all employees are fully informed of their responsibilities.
STRATEGIC PLANNING AND MONITORING
Sekunjalo TSL manages its businesses strategically following a process, which includes an annual review of past performance, products/services, markets as well as a review of the internal and external environments. This review is followed by the setting of strategies and action plans, aimed at both growth and sustainability in current markets.
In addition to the annual strategic planning exercise, quarterly reviews of strategy achievement and how changes in the internal and external environments may positively, or negatively, affect each business unit, are held. Strategies and actions are adjusted to ensure the growth and sustainability of each business units.
In this manner, each business unit and the Sekunjalo TSL Group can monitor its financial performance against strategies set for the year and evaluate this against the key performance areas of management and key employees. Through this process, the sustainability of operations are ensured.
The Board of each business unit in Sekunjalo TSL has an approved formal delegated authority schedule, which informs executive management of the necessary levels of approval for all key business transactions. In this way, the Sekunjalo TSL Group ensures that there is a senior manager or the Board itself reviewing each key business transaction/initiative to ensure that key business activity is aligned with the Sekunjalo TSL Group strategy, is lawful, will contribute to the Company’s sustainability and will not be harmful to any stakeholders and/or the environment.
Sekunjalo TSL aims to deliver sustainable returns to all of its stakeholders. Trusted relationships with their key clients and increasing the awareness of their brands as innovative and high-quality offerings, positions the Sekunjalo TSL Group well for continued growth. By increasing the value of their range of activities will result in reducing the cost of products and materials purchased internationally and focus on internally developing and acquiring a set of core products.
A measure of the value created by the Sekunjalo TSL Group is the amount of value added by its wide range of activities to the cost of products and materials purchased. Trusted relationships with key customers and increasing awareness of their brands as innovative and high-quality offerings position them well for new opportunities and continued growth.
The various business units in which Sekunjalo TSL operates is not considered to make particularly heavy demands on the natural environment in which their community stakeholders live. Management is consistently mindful of reducing CO2 emissions, reducing paper usage and appropriate electronic waste disposal in operating decision-making.
Sekunjalo TSL has an investment in a renewable energy solutions provider, Emergent Energy (Pty) Ltd, to contribute towards reducing South Africa’s consumption of and reliance on fossil fuels and improving its footprint across its value chain. Beyond the inherent benefits of delivering a carbon-free energy production solution, they continuously look at improving their footprint across the whole value chain with specific care being given to internal procedures and practices.
Sekunjalo TSL subscribes to a sustainable approach in conducting its business.
For Sekunjalo TSL, corporate citizenship goes beyond legislative compliance. It recognises the rights and responsibilities of businesses within a broader societal context and reinforces the mission of the Sekunjalo TSL Group to implement a social contract between business, government and civil society.
The Sekunjalo TSL Group is well aware of the critical role that a business has to play in the upliftment and development of the previously disadvantaged majority. It is for this reason that they give back to the communities in which they operate by contributing to the following initiatives:
- Implementation of recruitment policies that encourage the recruitment of appropriately skilled, previously disadvantaged individuals;
- Development of staff within the various business units and to grow human capital;
- Implementation of learnerships to assist with elevating the skill levels of previously disadvantaged individuals;
- Financial and in-kind contributions to the development of various early childhood development, youth centres and adult teacher training;
- Organisational involvement and sponsorship of start-up workshops held annually;
- Partnership with the University of Cape Town’s Commerce Faculty to provide relevant, updated course content for their second-year students;
- Participation on the University of the Witwatersrand Information Systems industry advisory board to contribute to the industry relevance of university course content;
- Investment in a number of emerging, black-owned technology enterprises at an enterprise development level through business incubation programmes;
- Learning programmes within the digital space;
- Partnership with the Cape Peninsula University of Technology to provide mentorship and collaborate with previously disadvantaged individuals.
The Sekunjalo TSL Group is an active member of SETA and strongly believes in internal training and development. During the year under review, staff attended seminars and training programmes in their relevant areas to further grow and develop.
With the changes in the new BBBEE codes, each business unit continually strives to meet and exceed the benchmarks set by the BBBEE codes of good practice.
KEY CHALLENGES AND RISK MANAGEMENT
At present, their strategic focus is aimed at overcoming the following potential challenges:
Risk management is integrated into each business unit’s management process. Each business unit maintains a risk register, which is compiled and maintained by the executive management, with the risk status and execution of planned actions being reviewed monthly. Executive management is responsible for the identification, classification and management of all operational risks.
Significant strategic and going-concern risks can be identified at all levels in each business unit. However, the responsibility for directing the actions necessary to manage these risks is the responsibility of the board of directors of each business unit. Strategic and going-concern risks are reviewed at the quarterly Board meetings and the executive directors are charged with the execution of approved risk management actions.
In the year under review, although a number of identified risks could not be avoided, the pre-planned management strategies for these risks were successful in mitigating or avoiding the severity of the impact on the respective companies and overall Group financial performance.
The Sekunjalo TSL Group recognises the importance of constant engagement with stakeholders. The principal stakeholders for the Sekunjalo TSL Group are shareholders, employees, customers and suppliers.
A key element of their strategic planning process is the documenting of the values and the culture of their business units.
Stakeholder-oriented values include:
- honesty and integrity;
- passion for customers;
- quality in all that we do;
- development and respect for employees;
- accountability and commitment; and
- protecting/conserving the environment.
The Sekunjalo TSL Group has various procedures in place with regard to stakeholder management. These are summarised as follows:
The Sekunjalo TSL Group aims to be a competitive and attractive employer in the marketplace. Remuneration and benefits are important drivers, as are career opportunities, personal development, culture and values, leadership, Company performance and reputation. The Sekunjalo TSL Group complies with applicable laws, agreements and industry standards on working hours and compensation.
The Sekunjalo TSL Group has various incentive schemes in place in order to retain talented and experienced staff.