NETCOM Africa: We are changing our business model to meet the current realities of the market

In an ever evolving market, there is always a need for organizations to be ahead of competition. In line with this notion, NETCOM Africa, an information communication and technology (ICT) firm based in Lagos has changed its business model to meet the current realities on ground and to meet the demands of the consumers and prospective clients. 

Speaking with the media, the Chief Executive Officer of NETCOM Africa, Sean Hsu said:

The transition is a matter of economics, the margins on data are small, it’s around three to four percent and this is not sustainable. The cost of doing business is high and as an organization, for one to still stay afloat in a highly competitive market, there is a need for evolution. Let us look at this example; data sales need so much volume now compared to when we entered the market 14 years ago. The internet penetration in Nigeria is in major cities and the rural areas need satellite and they are not economically viable. But in managed services, you can make some decent margins. That is why we have to diversify, and in technology there is constant evolution.”

“At the end of the day we have to look at costs, prices, and margins, and that is why we did a transition. When we started out, the culture in the company was like “we are fine, why change.” As of today we have embraced change because we are trying to predict the future of business, which is business intelligence, analytical intelligence” Sean Hsu added.

With the change in the business ecosystem, especially in the ICT space where innovation and automation is the order of the day, companies are beginning to come to terms that as they mature they might not have that 10% profit or more, the profits would shrink because of the ever evolving market, sophisticated customer base and competition especially in a stable environment. With this thought in mind, NETCOM Africa business model is tilting from Capital Expenditure (CAPEX) or hardware based to Enterprise resource planning (ERP), IT consultancy and automation. 

This is the new narrative; NETCOM Africa is going to use technology to Nigerians advantage. Instead of high hardware costs, which would eventually be outdated and need replacing, the firm would dwell into a lot of Managed IT Solutions. It’s not just about cost anymore. The question decision makers would ask is how much can I increase my productivity which equates to revenues by making this investment?  This is the type of questions NETCOM Africa would be answering for Chief Information Officers (CIOs) and Chief Executive Officers (CEOs).
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