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LSE-listed company Sage has close historical links with South Africa, having acquired the South African Softline in 2003, a company that included VIP Payroll and Pastel, and was founded locally by Ivan Epstein and Steven Cohen.
Sage in South Africa now falls under the company’s Africa and the Middle East region, headed by executive vice president, Pieter Bensch.
But the historical link is still seen on many payslips in South Africa today, where payroll documentation managed on Sage’s products may still carry the Sage Pastel or Sage VIP logos.
This is because Pastel remains a strong brand within South Africa, says Bensch.
Therefore the gradual change to Sage Pastel locally, with Pastel to eventually fall away. Sage’s Africa and the Middle East region includes East Africa, primarily focused on Kenya and Tanzania; West Africa, mostly Nigeria and Ghana; and the Middle East, mainly the seven emirates of the UAE, as well as Saudi Arabia.
Bensch says there is a strong focus on growth in these countries.
However, South Africa contributes 90% of the region’s revenue.
Here, Sage has 500 clients on its enterprise management products – medium-sized and large companies with customers including the likes of Cape Union Mart and Mr Price.
The South African market is in the top five in terms of Sage Enterprise Management revenues for Sage, says Bensch.
Yet, he says, there is still huge potential for growth.
“We aim to grow this division by 30% per year – in South Africa alone.” Adding that, “our ambition is to continue to grow at 30%, or more, indefinitely”.
“For Enterprise Management in the rest of the region, in Kenya, West Africa, the Middle East… triple-digit growth. 200%,” says Bensch.
The differentiatorSage’s biggest differentiator, says Bensch, is its SaaS (software-as-a-service) financial and payroll solutions which allow for rapid deployment and make enterprise-class technology accessible to businesses of all sizes.
Another differentiator is its independent software vendor (ISV) and partner community.
By calling on the skills and experience of these independent business partners, Sage can provide tailor-made products to different clients, as those business partners come with specific skills and products for specific client demands.
“We don’t try to do all the implementation ourselves. The majority of implementations is indirect, with a business partner.”
It is “an advantage that our competitors don’t have”, he explains.
“We’re 1 400 employees in South Africa, but the local Sage ‘economy’ is another 4 000 – counting in all our business partners.”
Capitalising on strengthsSage provides services within three broad sectors. The first is small businesses with zero to ten users.
“Small and medium businesses, plumbers and the like,” explains Bensch.
“And there we have more than 210 000 customers – not users – in South Africa. That’s a lot.”
The next level of focus is on medium businesses and, lastly, large businesses.Bensch says in terms of enterprise management, Sage is “really strong” when it comes to providing services and solutions in distribution, manufacturing, agriculture and services.
At the same time, he sees agriculture and distribution as two sectors in South Africa that are really ripe for a data-driven revolution.
“When you look at what some of the big distribution … and warehouses in South Africa do with the Internet of Things… And we’ve got an open platform. We can integrate with them.”Gaining traction in agriculture in South Africa is one sector that “we’ve missed. Until now,” says Bensch, adding that they do already have “most of the agriculture sector on Sage’s payroll products”.
Now Sage is hoping to start generating customers within the agriculture sector that could benefit from products that they’ve developed elsewhere.
“It doesn’t have to be mega farmers. Sage Enterprise Management can work for a farmer with 20 employees. When you look at the wine sector, you’ll find 100 farmers falling into that category.”
To gain traction in the local agrisector, one of their business partners in the Middle East, Aritmos, has expanded its office in South Africa.
Aritmos, a Spanish company, developed software for the Abu Dhabi-headquartered agribusiness Al Dahra.
Al Dahra has operations in 20 countries, and Aritmos developed and adapted software that helped Al Dahra to streamline it’s farming, processing and supply chain management systems.
Growing when the economy isn’tAccording to Bensch, Sage in South Africa managed to largely escape economic pressures over the last two years.
“We’re still growing at double digits in South Africa,” he says. Over the last year, Sage has, in fact, noticed growth picking up, and he says that is because it is focused on “solution selling”.
“We’re not selling in isolation. You’re selling a solution to the customer.”But Sage has noticed a slowdown in growth in small businesses – “one-man and two-man businesses”.
“Let me give you an example. If our telecentre phones a one-man organisation, that owner says: ‘I’m busy splitting my budget at the moment… Will I buy a generator, or should I buy software?’
“So, that’s tight. But we continue to grow there.”
Medium and large enterprises will, however, continue to seek ways to become more efficient, he says.“If you can get more efficiency in your business, you can save on costs, and you can continue to grow. That’s where we are getting traction.”
His biggest challenge in South Africa, therefore, isn’t lack of growth, but rather a shortage of the right skills that Sage needs locally; specifically development and implementation skills. Some of Sage’s products are developed in South Africa, and Bensch says the company experiences a shortage of skills locally when looking for developers.
“And the skill to implement. Our business partners are looking for skills… We’re looking for skills...”
Getting to know Pieter Bensch
Best business advice you ever received?
A senior mentor that I had very long ago told me that I should focus on listening, and the answers will come. Listen to your customer. You’ve got two ears and one mouth.
Listen twice as much. That’s what I tell sales people.
Your advice to South African business leaders?
The South African culture is such that we can push through anything. It takes a lot to force a South African out of business. So: How can we use that to our advantage, and to grow business?
Businesses that want to grow should invest smartly. Automate your business. Create a foundation that will allow you to grow. And it’s not just relevant in tech – your foundation is in the entire process of your business.
Many businesses have grown without having processes in place. When you reach a certain level of growth, it becomes difficult. Then the wheels come off.
Also: Service.
Service. Service.
Tell us about your management style?
Open and consultative. I don’t see myself in an office. I want to be able to go and talk to people. People must be able to come and talk to me. My job is to solve people’s problems and to remove obstacles in their way.
What differentiates a good business leader from the rest?
That’s a loaded question! I think a good business leader focuses on customer service. Service first. If you deliver a good service, you’ll have that customer for life. And once you’ve got that in place, you can start charging a premium for your service.
What do you read?
I read business books and autobiographies. Steve Jobs.
The most recent one was the book on Amazon’s Jeff Bezos.
I think we can learn a lot from people who started small businesses and managed to grow them into big ones.
So you read to learn, not to relax?
Yes. If I want to relax, I cycle. [Bensch recently completed the Joburg2C race, covering 900km in 9 days. And it’s not the first time.]
What is your favourite holiday destination?
We always try to visit new destinations.
Our country is enormous. There are so many places to see. We still haven’t seen it all yet. It’s difficult to choose between the ocean and the bushveld.
It’s a toss-up between Paternoster and the Okavango Delta.
Anneli Groenewald interviewed Pieter Bensch at Sage’s Enterprise Management Partner Summit in Dubai and attended the event as a guest of Sage.
This article originally appeared in the 20 June edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.
