How COVID-19 has impacted local tech distributors and what the rest of 2020 holds

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The impact of COVID-19 and the extended national lockdown is proving difficult to quantify at this stage, but it cannot be argued that it is having, and will continue to have an impact on a myriad industries in South Africa.

We’ve already seen the local publishing and printing industries impacted, with a handful of publishers and publications shutting their doors as a result of COVID-19, and recently local consumer and computer technology distributor RebelTech suffered a similar fate.

In fact, the local tech distributor industry has proved an intriguing sector to watch during the COVID-19 pandemic and phased lockdown exit, as some have adopted new strategies to cope in these testing times.

Others have pivoted to supply businesses and consumers in the country with essential medical gear, answering a requirement for the nation, as well as ensuring commercial viability.

To find out how COVID-19 has impacted the local distributor market, we spoke to three firms specialising in the consumer and software technology side of things – Syntech, Syspro and Westcon-Comstor.

Each are facing both similar and different challenges, along with taking unique approaches, so this is the insight they’ve been able to share with us following the recent weeks of frenzied activity.

One of these was preparing for lockdown, with tech distributors given little time to adequately develop strategies, much like many South Africans struggled with too.

Taking care of the essentials

For all three organisations, the focus was two-fold – staff and technology – ensuring that both elements are taking care of, especially as they will prove critical post-lockdown.

“Our key priority as a company was to ensure the safety and wellbeing of our staff as we shifted towards a remote working framework. We also took into consideration the need for personal connections, realistic work schedules and continuous skills development as a crucial motivator,” explains Syspro chief product officer, Paulo de Matos.

“In order to make this a reality and make sure that there is almost zero disruption to our customers we had to ensure that our staff were equipped with the appropriate technology, platforms and connectivity to effectively operate remotely from home and provide continuity of service. at home to ensure the continuous of services,” he adds.

Syntech also found that lockdown highlighted issues that the distributor had not encountered previously, but director Ryan Martyn notes that it has provided a great opportunity for the tech distributor to look for innovative solutions to problems.

“The lockdown presented challenges which we had never imagined. Although we previously thought that our business operated efficiently, we quickly learned that some of our processes were very cumbersome,” he says.

“We were fortunate to have a firewall with VPN security and Office 365, which allowed us to access our emails and systems. During the lockdown, we migrated to a cloud-based PBX system which meant that we could use our phones remotely and have been holding regular meetings using Microsoft Teams,” Martyn continues.

In the case of Westcon-Comstor, CEO Rakesh Parbhoo, notes that his organisation were already advising employees to practice social distancing a week before the lockdown announcement was made by the presidency. His team were able to use that valuable to time to find the best way of working remotely, as a result.

“Luckily for us, we had already taken additional measures in our offices and had been encouraging people to work remotely across the continent for over a week before. That gave us time to test remote working,” he notes.

“But without a doubt, despite all the planning, no one has ever had to deal with something like this before. It’s an environment where not only is one business affected, but all businesses, both suppliers and customers simultaneously,” stresses Parbhoo.

The (supply) chain

Looking at how COVID-19 will impact the technology we use, and hope to to use, day to day, the biggest hurdle currently is the supply chains.

The presidency has explained that for essential goods, supply chains remain unaffected, but that is hardly the case when it comes to technology.

“The supply chain effects are global, and from the beginning of the year, there have been shortages of materials resulting in extended lead times. A lack of flights means limited space to get goods into the country, and we have seen costs increases between two to over five times normal carrier costs. And then with only essential services being allowed at this point, many shipments are still waiting to ship, or clear for delivery,” says Parbhoo.

There have been massive delays on all of our supply chains because many of the companies and government departments that we depend on for logistics have not been operating at full capacity,” adds Martyn. 

Perhaps of greater concern is some of Syntech’s non-tech product also being effected, with the distributor recently pushing to get medical gear into the country and turning to local businesses to assist as well.

It’s worth noting that we lost about 102 000 masks in transit while customs was clearing a shipment. With the reduced workforce, we have noticed inefficiencies along with poor controls,” he points out. 

Embracing the pivot

Looking at other industries, and ecommerce in particular, it is the firms that have been able to pivot, that are still remaining viable at the moment. The likes of Takealot have customised its site and delivery options to comply with government’s lockdown regulations, and sites that sell tech hardware have also found reasons to deem its inventory as essential.

For tech distributors, a similar pivot has been embraced, and in some cases greater collaboration and consideration is being called for.

“These are some of the product ranges that we have expanded into. Infrared thermometers and 3-ply masks have been some of the first successful products. We do believe that it is important for any new initiatives to be relevant for longer than an immediate hype in demand,” says Martyn about Syntech’s recent product diversification.

“We (Westcon-Comstor) already have our ecommerce platforms for our customers as well as integration with other broad ecommerce sites. However, the categories of essential services are what defines what can be sold and delivered, and essential services so far have very limited IT technologies/products for the broader market. Large, widespread e-commerce sites have been very vocal about this as it has severely limited their capabilities,” highlights Parbhoo regarding the hurdles that his organisation currently faces.

In the case of Syspro, which specialises in the software side of things, it is looking to assist those companies wanting to make the pivot from a technology perspective.

“SYSPRO ERP can support local manufacturers to make this pivot by providing the systems and platforms that resolve the biggest areas of impact; remote workforce enablement, implementation and automation of business systems to handle procurement and sourcing policy changes, distribution and lead time planning; and analytics providing data real-time to support improved decision-making,” de Matos illustrates.

Outlook for the rest of the year

Given the amount of uncertainty at present, all three tech distributors remain weary of what the future holds, and what a post-COVID-19 will be like for their own industry, as well as the country at large.

For some, the road to recovery is difficult to determine at this stage.

We anticipate that the market will be sluggish for the remainder of the year. Many consumers have already lost their jobs, others will be forced to accept lower salaries as businesses try to rebuild. At the very least, consumers will be more thoughtful before making a purchase,” Martyn believes.

Others are seeing potentially paradigm shifting opportunities as a result of this global pandemic, particularly as it pertains to how businesses will operate moving forward, and the need to enable remote working.

“Companies will be rethinking their office environments and how to maintain interaction with staff who can work remotely. Technology has a massive opportunity to enable the new way of working that has been talked about for a decade but never been the necessity it has become in the last few months,” says Parbhoo.

“While no one can accurately predict when the COVID-19 pandemic will end, one thing is certain, the world of work will be changed forever. People will continue to remain our top priority following from the suspension of the lockdown,” concludes de Matos.

[Image – Photo by Ruchindra Gunasekara on Unsplash]

Robin-Leigh Chetty

Robin-Leigh Chetty

When he's not reviewing the latest smartphones, Robin-Leigh is writing about everything tech-related from IoT and smart cities, to 5G and cloud computing. He's also a keen photographer and dabbles in console games.