East African Breweries Spends Billions On IT to Grow Business
East African Breweries has spent Sh1.6 billion on a SAP installation in its last budget year, and it also plans to spend an additional Sh600 million on more IT systems in coming months. "We have seen the need to use technology to analyse data and make informed decisions in day-to-day management and operation of the business," said Wamoni Mwangi, director of Information Systems at East African Breweries.
"Companies are increasingly depending on technology to help streamline supply chain deliveries and inventories and are monitoring and realigning company resources to manage their inventories," said Mr Mwangi.
The company, which is now utilising a state-of-the-art software installation to optimise its operations, says technology has become an important part of its business and that the realisation prompted the company to embark on an aggressive digitalisation plan aimed to streamline operations and bring down operating costs almost two years ago.
The pay-off has been measurable in increased internal and external customer satisfaction. "ICT is seen as a strategic business enabler. All key processes - manufacturing, procurement, inter company transactions and HR - are IT driven," said Mwangi. In coming months, EABL will be sourcing for additional hardware, software and consultancy applications to streamline operations.
In particular, the firm hopes to use technology to respond faster to customer demands, enhance product quality management and overcome physical geographical boundaries to operate its business seamlessly, with hopes of facilitating cross-country bench-marking.
It will join other local companies who now reportedly spend at least half a billion a year on technology solutions, in what industry analysts believe is a signal that Kenya firms are at last warming up to technology use to manage key processes in the business.
In a bid to capture a significant edge over their competitors, local analysts say companies are now spending more on ICT solutions than ever before, with budgets exponentially increasing - and in some industries such as the banking sector, doubling - every year.
"Without doubt across the board, IT budgets are increasing. The trend is being driven by the need to embrace technology in all aspects of any business operation - irrespective of the nature and size of business. It is now increasingly difficult for a business to run and progress without IT," said Mr Mwangi.
Private sector spending is likely to rise by 20 per cent this year, as the financial services and telecommunications sectors move towards the introduction of customer relations management systems. Other sectors plan to integrate existing systems to support expanded Internet services such as online transaction.
But a survey by IT research firm All Covered found that small businesses are in danger of being left out of the shift towards embracing technology as a business enabler. Around the world, small businesses are investing more in IT systems, yet only half of the companies see IT as a competitive or strategic advantage.
Of the companies that viewed technology as a source of competitive advantage for their business, most reported above average anticipated revenue growth.
"Business owners and decision makers are familiar with how "tactical" solutions will work for their business, but for strategic solutions, they need to better understand how technology links to their strategic business objectives," said the All Covered report.
"Businesses that have successfully utilised technology yielded higher results and a competitive edge over their competition."