Isaac Mophatlane Talks About The Need For Diversity And Good Governance In South Africa's ICT Industry

South Africa's Information Communications Technology (ICT) industry needs a lot of transformation, particularly on the gender and race fronts, Telkom BCX CEO Lenamile Isaac Mophatlane opines.

The lack of growth is evident in the lack of diversity, Mophatlane adds.

"At 43, I'd like to think I'm a veteran in the industry and yet when I attend technology conferences I still see mostly the same faces I have seen over the years", he muses.

Back in 1986 when Isaac, and his late brother Leetile Benjamin Mophatlane got their first introduction into the ICT world thanks to the computer lab at the Christian Brothers College (CBC) in Kimberley, South Africa's ICT industry, especially at the ownership and management levels, was almost exclusively male and white.

An Early Blessing In Disguise

Coming from Ga-Rankuwa and being sent to a private school in Kimberley, the Mophatlane twins were fish out of water. As Isaac relates, they were not exactly good soccer players and definitely not athletic, having not been exposed to sports like rugby, cricket and hockey early on.

They did, however, play chess, and this opened several doors for them.

"One thing that was quite cool is we were both in the chess club", Isaac adds. "Our late father had invested a lot to make sure we played chess regularly, and we had a chess tutor when we were young."

Their interest in computers came through Paddy O'Brien, a Catholic brother, at CBC Kimberley who encouraged them to join the computer club.

The computer club's lab ran on BBC (British Broadcasting Corporation) manufactured computers on a network with a single file server.

This regular access to a computer lab at an early age allowed the Mophatlane brothers the time and resources to hone their programming (Turbo C++ and Pascal) and computing skills more regularly than many young people at the time. Looking back, it also set the foundation of what was to be an illustrious business career in ICT across Afrika.

Connections

Fast forward a few years and the Mophatlane twins were now moving on from high school and thanks to their good results at CBC Kimberley they received bursaries from the South African Breweries (SAB) Ltd to study Accounting at the University of Pretoria, but their interest for ICT would show itself again during their varsity days.

Now, if you were a programmer or electronics enthusiast in the mid to late 1990s in Pretoria, there were two likely places where you probably bought your books, manuals, software, compilers, electronics and other supplies from - either you shopped at Communica or Software Connection at the Sanlam Sentrum. If you shopped at Software Connection especially on Saturdays, you wouldn't be blamed if you regularly mixed up the names of the two sales people at the store.

Benjamin and Isaac Mophatlane
L-R: Benjamin and Isaac Mophatlane | Credit: DESTINY MAN

"The intriguing part is when we were at varsity we got to meet the Software Connection crowd, we actually used to buy our software from them in the (Pretoria) city centre," remembers Isaac."This is kind of where we blossomed. We were scholarship students with South African Breweries, we used to work five days a week at SAB and on weekends at Software Connection (as sales people)".

More importantly, working at Software Connection allowed Benjamin and Isaac Mophatlane the opportunity to "learn the ropes of the retail side of the IT business", setting them on an interesting path. As Isaac recalls, this was the early days of the Internet and they were at the heart of it, so to speak, in South Africa, getting to learn and play around with all the new hardware, modems and software as they became available on the South African market.

"It didn't feel like work and we had a passion for it," Isaac explains.

Then things moved on rather quickly from their Saturday sales part-time jobs at one of the Software Connection stores in Pretoria to being the youngest director, at 23 years old, on the board of the Connection Group which had just listed on the Johannesburg Stock Exchange, while his brother, Benjamin, was working at consulting firm KPMG.

The connection between the Mophatlane twins and the Connection Group founders - Anthony Delport, Steven Danker et al - seemed to be solid at the time and Isaac believes it is because they saw something in them, that likely no one else was seeing at the time.

So strong was the connection that the founders lent the Mophatlane twins R4 million to start an ICT business as things were likely to change in South Africa.

At this point, it is important to note that this is all happening during a period when South Africa was in transition from an apartheid government to holding the first democratic elections in 1994. There was both fear and hope about the future at this time depending on who you spoke to. Also, there were no Black Economic Empowerment (BEE) guidelines, white papers or policies at this time.

"We built the business (from the onset) to be one of the biggest Microsoft partners in South Africa."Isaac Mophatlane

"Our first office was a 200 square meter office out in Brooklyn in Pretoria. I asked my brother to leave KPMG and start this business with me," Isaac continues. From there they set their focus on being a Microsoft reseller and Microsoft Certified Solutions Provider.

Hang In There

With the loan from the Connection Group (now known as Incredible Connection) they went on to launch Business Connection in 1996, but three years later they had hit hard times in the business. Isaac retells the story of how in 1999, he and Benjamin contemplated and had discussions about shutting down the business.

"(The) First three years were hard and in 1999 we were asking ourselves if we should close the business", Isaac adds. While they considered closing the business, some buyout offers started coming in, most notably Datacentrix, which offered to buy Business Connection for R1 million in 1999. The offer was declined despite the hard times, and the twins decided to stick it out. They also made a conscious decision at the same time that if the year 2000 "doesn't come with good things, we are out of here!"

"I remember that particular December in 1999", Isaac explains, "because we didn't pass our salaries and we still managed to have a staff party and pretend that it (Business Connection) was a going concern. Also, the guys at Connection Group were always there telling us if this failed, we could always come and work for them."

Halfway into the year 2000, Business Connection was awarded a R100 million contract by Telkom South Africa for Microsoft related software and licenses. The deal proved to be a tipping point for Business Connection and a reward for the Mophatlane brothers for hanging in there, as they also landed another big deal with Eskom later in the year.

There was only one way from that year onwards as Business Connection continued to grow.

Never Made A Loss

Having put the bad days of the first three years behind them, the Mophatlane brothers grew Business Connection in terms of revenue and territories covered, and also through some mergers over the years.

One of those mergers was with another South African company, Seattle Solutions, in 2001. As Isaac recalls, Seattle Solutions was very similar to Business Connection but it only had clients in Kwazulu-Natal and the Western Cape, which they didn't have. It also only had private sector clients whereas Business Connection had both public and private sector clients.

The largest merger took place in 2004, when Business Connection merged with Comparex to form Business Connexion Group, a South African ICT juggernaut with R3 billion in revenues.

Since then, the company has grown to employ over 7,000 people in Africa, the Middle East and the UK, with a revenue of R7 billion. More acquisitions followed, most notably that of UCS Solutions in 2010, in a deal rumoured to be worth R614 million.

"Over the years this business has been amazing. It brings tears to my eyes every time I hear people say through BCX I was given an opportunity to build a career."Isaac Mophatlane

Quite interesting, as Isaac notes, is that over its existence, BCX as it is now known has never made a loss.

Another notable thing is that, as Isaac concurs, there were hundreds of black-owned ICT companies generating millions in revenues in the late 1990s. Companies such as New Dawn Technologies, Choice Technologies, and Lechabile, to name a few, yet most no longer exist in an industry that really needs transformation. Many reasons have been cited over the years on why these businesses closed their doors but Isaac believes it comes down to governance.

"We managed to separate business from personal and we put in governance processes from as early on as we could," Isaac explained.

It was not only BCX's size and reputation that saw Telkom make a failed bid to acquire the company in 2007, but likely also the company's longevity and governance processes as Isaac explained.

Telkom would eventually make a successful $200 million (R2,6 billion) bid to acquire BCX in 2014, with the deal being approved in 2015.

This was also the saddest and hardest time for Isaac in his business journey. In the middle of 2014, while the deal with Telkom was being negotiated, Isaac's twin brother and then CEO of BCX, Benjamin, passed away.

"This year in September would have marked 21 years since we started the business. We (Benjamin and I) had a tradition where we'd go together and grab a quick drink and reminisce," Isaac Mophatlane concludes.

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