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Why in-House R&D Often Beats Acquired Tech when it Comes to Giving Customers Great Software
By Andrew Bourne, Region Manager, Africa, Zoho Corporation
When it comes to choosing technology providers for their businesses, CTOs and IT leaders have two options. The first is adopting a ‘best-of-breed’ approach, which involves hand-picking several disparate apps and products by different vendors, each one serving a specific need effectively. The second option is to take a ‘single vendor/integrated stack’ approach, choosing one tech provider who offers a suite of pre-integrated applications that addresses multiple business requirements in one go. Customers today increasingly prefer the second option to streamline their business processes.
In a bid to cater to this demand for unified software suites, technology companies—especially those that provide best-of-breed apps, are racing to expand their capabilities. Often, they do this through mergers and acquisitions (M&A), buying up apps to satisfy customers’ growing needs. While this approach has some appeal — most notably, it allows vendors to quickly secure market share without building something from the ground up — this is inherently flawed.
By making extensive use of M&As, software vendors risk ending up with a poorly integrated “Frankenstein’s Monster”-style technology stack which falls short of the promise of application consolidation and doesn’t really add value for customers.
The trouble with M&A – Cultural and technological integration issues
M&A activity comes with an array of complications, including culture clashes, redundancies, office politics, increased attrition rates, and tech integration challenges. In fact, a 2016 Harvard Business Review article went as far to say that “M&A is a mug’s game, in which typically 70% – 90% of acquisitions are abysmal failures.”
Those failures ultimately impact the customer, by putting them in the same situation they’d be in if they were trying to work with a string of different products.
Even the biggest companies struggle when it comes to successfully integrating acquisitions. In the consumer space, users know this all too well. Take Yahoo for example. When it bought Tumblr for US$1.1-billion in 2013, it thought it had a surefire winner on its hands. Yahoo’s idea was to strengthen its social media platform services by integrating Tumblr’s blogs more tightly into its network using the former’s personalization technology and search infrastructure. Unfortunately, Yahoo never managed to properly integrate the micro-blogging social network and even stripped it of some of its most celebrated features.
Similarly, Microsoft’s difficulties with Skype are well-chronicled. Having acquired the peer-to-peer calling and messaging service for US$8.5-billion in 2011, Microsoft initially planned to integrate Skype’s telephony architecture into its user communication platform and a few other services. That integration took so long and had such flawed execution that consumer confidence took a massive hit. As a result, when the Seattle-based tech giant launched Teams in 2016, it developed its own video-calling feature in-house instead of leveraging Skype’s capabilities to ensure aesthetic consistency as well as a more streamlined fit among its enterprise collaboration solutions suite.
On observation, it is typically public companies that spend billions acquiring disparate technologies, in order to inherit massive customer bases and expand sales to satisfy investor demands for constant growth. Unfortunately, when an acquisition fails, it’s the customers who bear the brunt of incompatible integrations and broken user experiences. Rather than banking on high-profile acquisitions that hold higher odds of failure, vendors that have their customers’ best interests at heart could also consider investing in developing their own software and services.
The case for going in-house
Developing native technologies and building products in-house surely takes its sweet time. Of course, an integrated suite of business solutions that’s built on a unified tech stack can take even longer, and also religious investment across in-house R&D/innovation capacities, homegrown talent, and resource upskilling. But the investment is worth the effort. Not only does it save big money and make things simpler, it also projects trust and credibility, helping build long-lasting customer relationships.
Creating complementary applications from scratch also ensures that they contextually integrate with one another from the get-go. It also provides a consistent look and feel in performance, making its customers more likely to accept the new product. On the other end, customers too benefit from a set of applications that work in perfect unison to drive better organisational processes and improve collaboration.
When it comes to building great enterprise technology that lasts, therefore, it’s much better for vendors to build in-house than to try and buy their way to growth and expansion.
Commercial banks in Nigeria closed 2.021 million bank accounts in the first quarter of 2024, Q1’24, to clean their books of questionable accounts and comply with regulatory orders on the linkage of bank accounts to the National Identity Number (NIN).
This is contained in a report by the Nigerian Interbank Settlement System (NIBSS), which also indicated that the number of inactive bank accounts grew month-on-month, MoM, by four million or 2.0 per cent to 19.7 million in March 2024 from 19.3 million in the previous month, February.
A bank account is classified inactive when it records zero transactions including deposits, withdrawals, transfers or point-of-sale transactions for six months.
However, details of the “Industry Bank Account Database”, a monthly data reported by banks, and compiled by the Nigerian Interbank Settlement System, NIBSS, also indicated that the number of active bank accounts grew by 6.62 million or 3.0 per cent to 219.64 million from 213.02 million in February.
Recall that in December 2023, the CBN issued a directive to all commercial banks in the country to restrict tier-1 accounts without proper Biometric Verification Number (BVN), and National Identity Number, NIN, that are not linked by Thursday, March 1st, 2024.
According to NIBSS data on BVN enrollment count, 61.6 million Nigerians have BVN as of April 2024.
Credit: Vanguard
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Dubai-Based Citizenship Firm Imperial Citizenship Expands to Lagos, Targets Africa’s Growing Wealth
Imperial Citizenship, a Dubai-based firm specialising in Citizenship and Residency by Investment (CRBI) solutions, has set its sights on Africa’s burgeoning wealth with the launch of a new office in Lagos, Nigeria.
This strategic move positions Imperial Citizenship to capitalise on the continent’s growing population of high net worth individuals (HNWIs) seeking international investment and mobility options.
Imperial Citizenship boasts a proven track record of success, having secured over 2,000 approvals for clients seeking alternative citizenship and residency pathways. Their partnerships with over 15 governments worldwide provide a diverse portfolio of investment opportunities that adhere to strict international regulations.
With its Lagos launch, Imperial Citizenship begins its foray into Africa. The continent boasts a burgeoning HNWI population, according to PwC, presenting a lucrative market for investment firms like Imperial Citizenship.
According to the World Bank, African economies are projected to grow by 3.4 % in 2024 as the African Development Bank Africa has reported that Africa will account for eleven of the world’s 20 fastest-growing economies in 2024. Highlighting the market’s potential, Mr. Zaid Al Hindi, Founder and CEO of Imperial Citizenship, says, “our expansion into Lagos allows us to directly cater to this affluent segment, offering them strategic solutions for global asset diversification, optimised investment opportunities, and enhanced global mobility.”
“At Imperial Citizenship, we do not operate through intermediaries, as we differentiate ourselves through direct government partnerships. This ensures transparency, legality, and efficiency throughout the application process, providing peace of mind for investment-minded clients” Zaid stated during the launch event in Lagos.
Speaking on the company’s approach to CRBI, Zaid mentioned, “At Imperial Citizenship, we prioritise a client-centric approach. We go beyond simply offering programs; we provide dedicated advisors who understand the unique needs and aspirations of each client. This personalised service ensures clients receive tailored investment options that align with their financial goals and risk tolerance”.
The launch of the Lagos office underscores Imperial Citizenship’s commitment to global expansion. With physical offices in Dubai and now Nigeria as well as operational representatives in Mexico, Algeria, and Turkey, Imperial Citizenship demonstrates its ability to cater to a geographically diverse clientele.
Looking ahead, Zaid highlighted that Imperial Citizenship plans to broaden its service offerings and expand its reach into new markets. By strategically targeting Africa’s rising wealth, Imperial Citizenship is well-positioned to solidify its role as a leading player in the CRBI industry, offering investors a gateway to global opportunities.
In a recent gathering, organized by 234Finance, key stakeholders and HNIs came together to discuss the theme “Fueling Progress in the South East.”
The conversation highlighted the rich heritage, entrepreneurial spirit, opportunities for growth and the potential of the South East to be economic powerhouse.
During the discussion, the Managing Partner of 234Finance, Ezinne Nwazulu unveiled plans for an upcoming event of significant impact: the 4-week intensive SME Bootcamp and Mentor Matchup Challenge South East edition designed to empower SMEs. The program aims to empower SMEs with the knowledge, tools, and capital for rapid expansion and global competitiveness.
This initiative is building on the success of previous Mentor Matchup Challenge events, which equipped SMEs with actionable strategies and one-on-one mentorship, resulting in winners of the pitching competition securing grant funding to scale their businesses by 4x-10x.
The SME Bootcamp will feature an array of activities, including physical and virtual training sessions, onsite industrial training, and a pitching competition.
Ezinne Nwazulu emphasized the rigorous selection process, where the top 100 applicants meeting the criteria will undergo intensive training at two training centres in Abia and Anambra. From there, the most promising 15 participants will have the opportunity to pitch their business for grant funding.
Dr Chima Anyaso, Chairman of Caades Group, expressed his commitment to the region’s development and encouraged entrepreneurs with innovative crafts to seize this opportunity.
Criteria for selection are uncompromising, emphasizing technical expertise in core sectors; Agribusiness, Manufacturing, Supply Chain & Logistics, Fashion & Textile, and Retail, with a particular focus on businesses operating within the South-East region for at least three years and significant growth potential of 4x-10x.
The Bootcamp is set to commence from May 14 to June 14 2024 with Southeast-based entrepreneurs encouraged to visit the 234finance bootcamp to apply.
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