Dimension Data is pulling the plug on two of its biggest brands, Internet Solutions and Britehouse, in a major restructuring exercise aimed at putting the IT services group back on a solid growth footing and removing unnecessary friction and duplication.
Internet Solutions — a company launched more than 25 years ago — was an early pioneer in South Africa’s Internet industry; Britehouse is a well-known software development house. Dimension Data subsidiaries Merchants and MWeb are unaffected by the changes — for now.
The decision to terminate the two brands — in favour of the overarching Dimension Data name — is part of a clearly thought-out strategy, said Dimension Data Middle East & Africa CEO Grant Bodley in an exclusive interview with TechCentral ahead of the announcement.
The sweeping changes, which will include a management shake-up and the removal of inefficient systems and processes, will result in job losses, but Bodley said it is too early to say how many staff will be affected. A clearer picture of the impact on jobs should emerge by the end of the month.
“Will there be efficiencies and people impacted? Absolutely,” Bodley said. “But this is a growth strategy. I talk about going ‘zombie-hunting’. What are the processes, systems and tools that are not value-adding to our business? If there is excess capacity, there will unfortunately be consequences of that.”
Costs will be cut
The changes affect the South African operation only for now. The group employs 8 000 people in South Africa and 12 000 across the Middle East and Africa. “I don’t expect the redundancies to (be big). This exercise has not been about numbers; the primary driver here is not a cost-reduction play… You can’t save yourself to greatness. But no business can afford to have excess. There will be costs out. I can’t tell you if it will be 100 people or 300 people.”
It is important, he said, that there is no impact on clients.
He emphasised that his entire executive management team is backing the restructuring. “The most important thing is we do it properly and do it right, but quicker is better to ensure minimal disruption.”
Though the changes could lead to uncertainty internally, Bodley said they are necessary for the company to improve its focus on customers and to deliver quality earnings growth.
“We sit in front of a client and spend 15 minutes explaining who Internet Solutions is, who Britehouse is. But customers say they buy from Dimension Data, and they only want to deal with Dimension Data. They don’t want to have to deal with our organisational design and structure.”
Another problem is that the different brands in the group have often competed for the same client business. “We should be competing in the market, not internally, but we see a lot of that is happening,” said Bodley.
Technology convergence is also a factor in the decision, he said.
The move, he added, should reduce internal confusion about which business unit does what. “If you ask someone in Dimension Data who owns ‘cloud’, you could have 10-15 different answers.” Bodley hopes these changes will help resolve this “internal conflict”.
“Clients would procure an end-to-end service and we’d spend time cobbling it together as best we could, with different execution plans, tools and systems, which made the client experience not as optimal and seamless as we’d like it to be. In many cases, it wasn’t as seamless as the promise we made.”
The changes, announced to staff on Tuesday morning, form part of Bodley’s five-year strategy for the Nippon Telegraph & Telephone (NTT)-owned group and are part of a plan to become “the most preferred ICT organisation on the African continent”.
‘Clarity of purpose’
He said Dimension Data is a “people business” and bringing employees together under one brand “will unlock a whole lot of value and provide a better experience to clients”.
“It will give us clarity of purpose and focus. Any operating model we bring to bear must be about increasing quality revenue and earnings. It must improve the client experience and it must reduce costs of some sort — or it must improve our go-to-market relevance. A lot of it, for me, is about making sure we become a lot more agile and agility comes with clarity of accountability, with a simpler operating model.”
Bodley has set tight deadlines to complete the restructuring. By 1 April, the group’s year end, a new executive structure will be announced, with new reporting lines in place. By then it will also know how many retrenchments will be necessary.
Between April and July, the group will complete any corporate restructuring that is required. “We are aiming to have retired the (Internet Solutions and Britehouse) brands by October.”
Duplicate systems will be decommissioned or merged, a process that could take between 12 and 18 months.
Asked why Dimension Data is keeping the Merchants and MWeb brands, Bodley said MWeb is a consumer play. “The way you engage and sell to consumers is different. In the future, who knows, maybe it will become Dimension Data Home. For now, while we are crystallising that strategy, it will stay MWeb and somewhat separate to the core enterprise business,” he said.
“Merchants is very much a standalone top-to-bottom BPO (business process outsourcing) business. It’s a good business for us, and strategic, but we are reviewing where we take it in the long term. It’s somewhat separate from the core business. They almost sit on the side of the core business.”
The group is also ditching its tagline, “Accelerate Your Ambition”, in favour of “Let’s Do More”. Explaining the change, Bodley said: “Dimension Data wants to win; it wants to be the best. It’s simple language. ‘Let’s’ is about a community, ‘Do’ is action, and ‘More’ is we want to be more than just another technology company.”
‘This is a choice’
With the Internet Solutions (including ContinuitySA) and Britehouse brands gone, the group will have five “Dimension Data go-to-markets” (GTMs), including Intelligent Security (a new practice) and Intelligent Infrastructure (a combination of Dimension Data and Internet Solutions assets). Each GTM will have an executive leading it.
“Over the next week or two, I need to formalise what the new executive structure will look like. Until 1 April, people stay in their existing roles.”
He said although the changes are significant, he is “excited” about them. “This is a choice. We could have stayed where we were.” — © 2020 NewsCentral Media