Banks Need to Focus on Risk Management
allAfrica.com, November 14, 2007
This Day (Lagos)
INTERVIEW
14 November 2007
Posted to the web 15 November 2007
By Efem Nkanga
Lagos
Mark Harris, IBM's Country Manager for South and Central Africa and its Software Group Vice President, Dr. Robert Mayberry visited Nigeria recently in connection with the forthcoming report on IBM Global Innovation Outlook(GIO). They spoke with select journalists, including Efem Nkanga on the GIO and other issues.
IBM has been around for quite sometime now but you still appear to be rather small in Nigeria and you haven't expanded as much as one would think that you should. Can you explain this?
Actually we are not a small organization. Nigeria is a key market for us. At IBM, we are looking at what we need to do on a global basis and right now, we have something called the strategic growth base for Africa that is actually on the company's radar. We also just completed something quite important, known as the Global Innovation Outlook.
We believe that for innovations to be truly make an impact they have got to be open as much as possible. So you've got to be able to discuss everything. Innovation should also be collaborative which means that you can't just do it from inside the company; you've got to collaborate across different disciplines. And thirdly, innovations should be multi-disciplinary as we don't believe it should be restricted to just government or business for instance. We believe innovations should be such as cut across government, business, the academia and even students.
So we ran something called a Global Innovation Outlook (GIO) on the economic development of Africa and Nigeria was a key part of that discussion. And then we held a series of Deep Dives. We did deep dives sessions in China to understand the impact China would have on economic development; we did deep dives in Europe, both in Portugal and the UK as well as in France to understand exactly how they would impact innovation and economic development in Africa. We also did a number of deep dives in the U.S because there are lots of Africans in the U.S who have an interest both economic and philanthropic on what would happen in Africa. And that culminated in Cape Town where we went through all the input and tried to do an aggregation of the key initiatives that would facilitate economic development. So it has been a huge investment by IBM not only did we pay for those deep dives, we paid for those people who attended the deep dives, people from Nigeria, Uganda, Ghana, from all over Africa and all over the world who got together to understand the key initiatives that they can drive in order to help fast-track economic development across the continent.
We know that IBM played a key role during the bank consolidation exercise. Can you please shed more light on the role IBM played?
Good question. When I look at a lot of the banks who have had a need to invest in infrastructure, I am amazed at the progress that the banks have made in the implementation of technology in order to better serve the country. Now beyond the progress that they have so far recorded, the other thing that Nigerian banks need to start focusing on is better Risk management. IBM has a huge competency in this area and we could work with these banks in strengthening their risk management capacities, of course as part of enhancing the banking system in Nigeria. When you look at how we've helped other countries like South Africa for instance, you'll find that IBM is the key partner to most of their banking companies, and I see IBM as a key partner not just in the infrastructure and the technology space but also in the business solutions space. So that's the next phase for us within the Nigerian economy.
Are the banks aware of this? Are they responding?
We are doing things on a bank by bank basis. For example we took a couple of your CEOs, to the Global Banking Conference. We had a CEO from one of your largest banks at our CEO Summit which our Chairman holds and in that, lot of the value is carried across as to how we can help those banks progress through their journeys.
What would you say you've learnt from these deep dives?
By 4th of December we will produce a booklet and we will announce, exactly what the outputs of those initiatives have been. When we look at Nigeria, as IBM we have done extremely well in Nigeria. We were very much initially in the commodity space, but we have since moved from there to the space where we are a key partner with Nigeria's banking industry, for example.
So Nigeria is an increasingly important market for us. Now something which we would always want people to understand is that, it's not just about IBM. We are creating an ecosystem of partners and we are working to develop the IT capacity in a holistic manner that will be advantageous to Nigeria in the area of economic development. So we continue to make a lot of investment in Nigeria and the sub-region not only in people development but also in empowering them to sustain and grow the ecosystem of partners which we are nurturing and who will in turn provide optimum service to Nigeria. We've also invested in a 'Service Centre'.
But more than that, as we go through the GIO what we'll do is bring back to Africa many Africans who are in IBM in the rest of the world. And as a key part of our investment as we continue to build up capacity within Nigeria, we will launch very soon, a programme where we would take 20 graduates at the initial stage from the universities and train them in our technologies. We're also working with a number of South African based companies who are making investments in Nigeria. So Nigeria outside of South Africa is the largest other market that our particular organization focuses on and we believe it's an area we've got to make a strategic investment in order to ensure that we both help Nigeria but can also do good business within the Country.
The growth in the ICT sector across Nigeria seems to be riding very much on the explosion in the telecom industry. Do you see this as a natural development?
Nigeria to me is a wonder to be honest. I first started coming to Nigeria way before the telecom companies, mobile operators started coming and I had this feeling of despair because of the lack of telecoms infrastructure. The coming of the mobile operators into Nigeria for one has just been almost a miracle, when you look at how companies were struggling with the use of radio and just satellite in trying to get some level of communication to what we have today, with some mobile operators like MTN just transforming an economy. I mean, I say to MTN themselves, I cannot believe the impact that the mobile operators have had in Nigeria. We have companies now who are introducing world class systems using telecom technologies even though the necessary and line infrastructure might not be in place. So IT has become mission critical in most of the organizations that you find in Nigeria today.
When I speak to the mobile operators as an example one of the biggest inhibitors we have had is lack of a robust energy availability systems and I discovered the mobile operators are sometimes entirely running a world class mobile operation with diesel generators, now the rest of the world would have said that's almost impossible but Africans, being the entrepreneurs that they are have really looked at solutions despite the lack of key infrastructure on how we can move this economy forward. So I'm delighted to see the progress that has been made. Not only have they leapfrogged an entire decade of lack of infrastructure, but we are starting to see the total cost of ownership between certain types of telecoms versus others start to disappear which really augurs well for the future of the economy of Nigeria. It is great to see how that digital divide has started to shrink.
So do you see Nigeria being able to sustain the growth over the next few years?
Absolutely, I think with the type of raw materials we as Africans have that with the way we are starting to attract foreign investment into many of the countries, everything augurs well. But what we haven't even tapped into yet and for me that is the next stage is the human capital capability that we have got here. When IBM at the moment looks across the world, we have something called a global sourcing capability, so we move work, work flows to where the best skill at the lowest cost is and globalization has not yet reached Africa to the extent that it would over the next couple of years. The impact on Africa and Nigeria is going to be enormous and I think a lot is going to do with understanding what the human capital capability is. The ability to invest in people. Now the success of Africa, Nigeria is going to be founded on the investment in people, to have people who can do research, who can deliver technological services. Do we have a service culture and have we trained the huge amount of human capital which exists in Nigeria today? That's going to be key and everybody has got a role to play in that. The government, academia, businesses and the whole society, and the quicker we get that plan in place and develop our of human capital, then the more competitive would Nigeria become in the world.
You have almost answered my next question. I was going to ask if you foresee a possibility of Nigeria someday emerging as a hub for manufacturing of IT products just like China. What do you think we need to do to get to that stage?
To me, when I speak to African governments and I speak to Nigerians, I always emphasize that it's not about IT manufacturing. Countries across the world have different competencies. Right now China is the manufacturing hub of the world. They can produce goods there which you cannot produce anywhere else in the world at the same level of cost and capacity and scale that they do today. Now do you want to compete in that space? Of course, that commodity space does create a lot of jobs which could have assuaged unemployment in Nigeria, but there are other areas of competency that Nigeria could succeed in without going into manufacturing. When you look at the business process, outsourcing manufacturing is a small part of the competencies that the large global companies are looking for. Nigeria has got a wealth of other skills. If you look at R&D, I was amazed that even inside of IBM, at the number of Nigerians that work in our research area who have the types of qualification that makes them ideal for research. I think it's critical that the Nigerian government identifies the core capabilities that differentiate Nigeria from the rest of the world and makes sure those areas are nurtured so we can become the hub of competency for the world rather than just being a small manufacturer within the bigger scale of things.
We read about PriceWaterHouseCoopers being part of the IBM organisation. Now the question is; is there much integration between PWC and IBM at the local level for instance?
There's PriceWaterHouseCoopers consulting and there's PWC auditing. Now, remember that the companies split because of the corporate governance issue of not wanting to audit the same firm which you consult for. IBM bought the consulting arm of the business and it's been fully integrated into IBM and is now part of our consulting business which has always existed.
What's IBM doing in the area of corporate social responsibility? I know you have quite a few programs in South Africa but what are you doing in Nigeria and West Africa?
I've already talked about the current scheme that we have at the moment in which we are taking 20 graduates from the universities and putting them through an intensive training to enable them acquire IT and technological skills. The underlying idea is to gradually enhance the quality of the employable workforce. So it's a way of empowering people to move off the unemployment space and instead become gainfully employed. In this same light, we have also run a project in combination with Lenovo and the Federal Capital Development Authority to train university graduates in IT skills.
That project is still ongoing. At the pilot stage about 140 graduates were part of the program and after about 2 months of the program, they all got jobs, good jobs. So this is something that is going on quietly in Abuja. Very shortly, we will be making an announcement about one of our partners who will be implementing a similar project in Akwa Ibom State. So human capital development is very key to our CSR strategy, because its multiplier effect is very huge and touches on practically every aspect of our lives.
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