… but what about the reality of dealing with corruption
Asking the top 10 most influential executives in the South Africa IT distribution sector (this month’s cover story) to provide insights into the future and to answer some retrospective questions about themselves, is always going to be an extremely interesting exercise.
Given the fact that the individuals who qualified for the top 10 ranking represent something approaching a quarter of a century of collective experience in the IT industry, with the majority of that time spent heading up their respective companies, it would have been a safe assumption to expect them to provide priceless gems of wisdom in answering the questions put to them by my esteemed editor.
To a large extent they did not disappoint and provided erudite comments on the challenges facing distribution and the channel as whole based on trends such as the rapid commoditisation of technology, the trend towards “Service-as-everything” and the emergence of cloud as the future.
They also noted that the current harsh economic climate is going to weigh heavily on the channel and that only those companies capable of achieving critical mass through size or the ability to constantly recreate themselves by focusing on unique, differentiated offers would survive in the long term.
One particular question the top executives did not handle particularly well, in my opinion, was how they went about dealing with corruption.
Understandably they steered clear of getting into detail by simply expressing their abhorrence of the practice that is endemic in South Africa.
As an honourable league of gentlemen who have been around forever, we should not question their integrity. However, it would have been interesting to hear whether or not they are faced with the following scenario and how they woukd deal with it.
A major open tender has been issued by a public sector entity or private sector enterprise for hardware and / or software.
A horde of business partners / resellers in the channel enter fray by approaching all the relevant distributors to provide pricing in order to enable them to respond to the tender.
In this fairly routine scenario, the following questions could very easily arise and have to be dealt with by the distribution management team:
- Are you prepared to pay a commission to a third-party as a condition of being awarded the deal?
- Are you prepared to sign up a company as a reseller that you have never done business with before?
- Have you been asked by one of the vendors concerned which business partner to favour with special pricing in order to win the deal?
- Have you been told what price needs to be quoted in order to guarantee winning the deal against competitor distributors?
Any one or a combination of all these questions could very easily be an indication that the tender may not be as “open” as it should be.
The questions to be put to our top executives should then be:
- Would you walk away from the deal if any of these issues were raised in the course of responding to the bid?
- If your response was to walk away from the potential deal, was it because of any suspicion that some sort of bribery or corruption was involved?
- If “Yes”, did you follow up with any inquiries in an effort to establish whether or not the tender was eventually awarded to a deserving bidder based on strictly objective meritorious criteria?
Against a background of pervasive bribery and corruption throughout all spheres of economic endeavour in this country as well as the thuggery that is more politely referred to as “State Capture”, commercial leaders are also faced with having to trade in an environment influenced by transformative legislation.
Given the introduction if the ICT Charter last year, there are always going to be questions about how to conduct business with new and emerging small-to-medium black-owned resellers as opposed to the more traditional mainstream business partners and well-established corporate resellers.
In some cases, new companies that suppliers are being asked to deal with or forced to trade with are emerging. In isolated instances they may not be all they claim to be given the fact that black economic empowerment credentials are sometimes nothing more than a front for yet another corrupt deal created by a “tenderpreneur” on behalf of a State Capture network.