Anton Herbst, managing director of Advanced Channel Technologies (A.C.T.) since March 2001, will be leaving A.C.T. with effect from 1 February 2011.

As a consequence of his resignation Anton will relinquish his position as a director on the MB Technologies main board effective1 February 2011.

Anton has made an outstanding contribution to the MB Technologies Group over the last decade and will be leaving to pursue personal interests.

In December 2000 Anton and his fellow directors presented a compelling business plan to the MB Technologies board to expand its offerings into the IT consumables market. From humble beginnings, but with an ambitious business plan, significant strides have been made in developing a formidable IT consumables business.

In his gentle and authentic way, Anton together with MB Technologies and his fellow directors and management team, have developed A.C.T. into a comprehensive business with deep management and significant relationships with vendors, customers, banking partners and staff. He has shaken the consumables market in his gentle manner and has created a winning team with a significant focus on its service offering.

“When we started A.C.T. we felt the need to build a business that would last forever. In striving to achieve that we have created a business that is sustainable, whilst being agile. We have also developed mutual respect between A.C.T. and its vendors and suppliers, and most importantly, staff that can see and chase after our big hairy audacious goal. My time with A.C.T. has been beyond my expectations and I will sorely miss the camaraderie of the team, the joy of creating strategies and then the involvement of all in their execution. I am looking forward to the change of pace though and am going to spend a good deal of time focusing on philanthropy, which will come as no surprise to those that know me,” says Anton Herbst.

Gary Pickford, who has held the position of sales director for the last decade and who has an intimate knowledge of the IT consumables market, has been appointed as managing director of A.C.T. with effect from 15 January 2011.

“Gary has made a significant contribution to A.C.T. over many years and has been well groomed under the leadership of Anton to lead A.C.T. into the future and grow the business further. In conjunction with Anton they will ensure a smooth transition,” says Glenn Fullerton, CEO of MB Technologies.

He adds: “Shirlinia Jacobs, who currently holds the position of enterprise sales executive and who has been with A.C.T. since inception, will assume the role of sales director effective 15 January 2011. Utilising  significant experience in the sales arena that she gained under both Anton and Gary’s mentorship, I am confident Shirlinia is well qualified to spearhead A.C.T.’s sales team”.  Helene Liebenberg, who has vast experience in managing A.C.T.’s logistics over the last ten years, will continue in her current role. No further appointments will be made to the A.C.T. board.

“The MB Technologies Board would like to thank Anton for his invaluable contribution to both A.C.T. and the MB Technologies Group and wish him everything of the best with his new endeavours,” concludes Fullerton.

Anton will continue to be associated with the group and will offer strategic consulting services to the MB Technologies Group.

By: Anton Herbst

While it seems like the recession is over, the impact of last year’s economic instability will be felt for some time to come.

And it’s no secret that the pressure stems from the massive disparity between the Rand/Dollar exchange rate during the first six months of last year and its level today.

From a currency that was trading at an average of R9.23 to the US Dollar during the first six months of last year, the first six months of this year will in all likelihood see us contending with an average exchange rate of R7.50 to the US Dollar.

Sadly, that will mean in order for our businesses to perform at the same level as they did during the first half of 2009, we will need to up our productivity (i.e. the movement of stock) by 20% without any increase in overheads – and believe me, the inflation rate of 8% means your overheads will be noticeably higher than what they were last year.

While we discussed the more generic way of overcoming this challenge last year, I’d like to start 2010 off on a very different note and suggest we tackle it by improving the engagement levels of our staff members.

Essentially, one’s engagement level is the degree to which you have a positive impact on the workforce that you are part of.

Largely speaking, the engagement levels of our staff in South Africa are alarmingly low, and while there’s no accurate figure to back this up, experts say that realistically 20% of the South African workforce is toxically disengaged – meaning their mere presence in the workplace is detrimental to their employers – while 40% of the workforce is disengaged – meaning they are at work but having a negligible effect on the businesses they work for.

A mere 18% to 25% of the workforce is truly engaged in your business, while somewhere between 15% and 18% are contributing some remote form of value to the mix.

By inference that means (at best) 40% of our workforce is responsible for 100% of the company’s productivity and 60% of the workforce is not making an impact at all – in fact, the worst case scenario says it’s being dragged down by those employees.

So I ask you then, why don’t we as an industry do something about changing that ratio of engagement? In my opinion it would make all the difference, since every positive 1% shift in engagement of our workforce will lead to between 3% and 4% increase in productivity.

It’s easier said than done – but we need to start somewhere.

To get this right, each business will need leadership, the ‘Madiba’ kind of leadership that shows staff that their engagement results in the achievement of a common set of goals, and benefit for all.

If each of our companies can get that right, it will be plain sailing.

And with the effects of the economic recovery due to hit us during the second half of the year, the combined effects of an increased engagement level and the healthier market will be awesome.

With the Rand about 20% stronger than what it’s been in previous months and the price of stock the cheapest it’s been in a long time, many stationers and resellers are predicting a natural upswing in the market as customers rush out to benefit from better pricing on hardware, consumables and other business essentials.

Unfortunately, the rising running costs members of the channel and their partners are experiencing throughout departments will scupper all hopes of that upswing transpiring.

Realistically, the market can expect the cost of electricity supply to rise more than 25% on top of last year’s 46% increase, the petrol price to climb another 10% to 20% by April and an increase in the consumer price index of between 6.5% and 7% (depending on how you calculate it) take any chance of increased sales volumes out of the game.

There’s also no way we as an industry can even begin looking at adjusting our margins downwards to create a more buyer-centric market – in fact, we should be doing the opposite.

The 20% reduction in the cost of stock has meant, should margins remain static, companies will be making 20% less profits than they did in previous years.

The only solutions are therefore for us as an industry to increase the volume of stock sold to customers by in excess of 20% (since 20% will only place us on a par with previous years), drop our service levels so our businesses reduce overheads and in doing so cope with the same margins as in previous years, or raise our margins so that good profitability and health returns to our businesses.

As we’ve already discussed, the first option isn’t plausible in current market conditions.

When it comes to service levels, I believe a company should never take a route that leads it down the path of lowering its service levels to customers.

The only option that remains is to raise our margins – and this is personally what I think we have to do in order to survive.

Besides this being the only way for companies to continue servicing their customers, it’s a move that separates the proverbial men from the boys, since the only companies capable of increasing their margins are those that are confident in the level of value they add to their customers’ lives. And quite honestly, those with customers that will be prepared to pay more by virtue of the service they are afforded.

If a company can’t raise its margins so as to remain healthy and capable of adding value to its customers’ lives, how much value is it truly adding and how good a relationship does it in fact have with its customers?

It’s a sobering thought but one that’s worth considering.

Rest assured, if you’ve remained true to the tenets of good business practice, you and your business shouldn’t have too much issue negotiating this adjustment. IF you haven’t however, it’s probably time you asked whether or not you truly want to be part of this business.

By: Anton Herbst

Despite the positive news drifting in fromUS and European shores about the end of the recession and returning confidence in the market, on local shores things haven’t looked as uncertain as this in quite some time.

On one hand, 2010 has seemed far more positive than the past two years, with good sales figures returning to the channel and daily sales volumes returning to the same, if not a better, level as what they were 12 months ago.

On the other hand, things haven’t looked worse for some companies.

And that’s the confusing part – all of that positivity should mean that market closures, bankruptcies and the need for bailouts should be a thing of the past.

Instead, the first couple of months of 2010 have seen a number of VARs closing their doors and others hanging by a thread, doing everything in their power to prevent their own closure.

It’s clear that the market is in limbo and the trends, patterns and history we have so often relied on in previous years for insight, don’t seem to apply.

While this uncertainty reigns supreme, it’s good to see more people realizing that we’re at the deep end of the pond and things aren’t going to get worse from here on in.

Over the coming months, I do believe we can expect things to become more upbeat in the market and for market factors to begin steadily improving.

As I’m sure everyone is aware however, it will take some time to deal with the issues the market has faced over the past couple of years.

Like the cocktail of factors we find afloat in the market today, the coming months will undoubtedly continue to be a mixed bag.

While those who were previously being crushed by their high-debt levels are getting some relief in that the costs of servicing that debt are on the decline, there’s not an abundance of disposable income to amortize those debts quickly.

The 2010 soccer world cup which South Africa will be hosting in a couple of weeks’ time is also drawing nearer and unlike many market pundits who believe positivity will flow from every aspect of this event, I’m a little more conservative in my views of what the world cup will bring to local shores.

I can’t dispute for one second what the event will do for the level of patriotism in our country. In think however the timing is unfortunate, since it will end up being a disruption in the progress the market has made this far in its recovery.

So what can we do about it? My personal belief is that we should do nothing more about the World Cup, but enjoy it. Hopefully what we can do as a country however is remember what we were busy with before the festivities hit and get back to it as soon as possible.

After all, soundly managing our businesses and focusing on what’s important is what’s gotten us thus far. And it’s what will get us through to the end of the year smiling.

By: Anton Herbst

With the World Cup over and as the harsh realities of the recovering market begin to set in, things are returning to somewhat of a state of normality.

But is it really ‘business as usual’? And should we let the same challenges we were facing prior to the World Cup madness continue to prevail?

I’d like the answers to those questions to be ‘no’. And my reasons for this are simple.

Leading up to the World Cup, the market took on a very transactional focus with companies vying for the big deals, sizeable tenders and attractive contracts the event brought with it.

But now those deals are done and those contracts are over – and for the most part, our minds must shift back to adding value to our customers in order to make a living.

And I think there are still huge gaps when it comes to solution provision in the sense of building innovative routes around the printers and consumables we sell, to not only make our customers’ lives easier but allow us to add something unique to their businesses that differentiate us and them from the herd.

And it’s clear that concepts such as cloud computing and the increased exposure of IT infrastructure as ‘services’ are shaping the future.

While many believe that printing won’t have a place in this world, I couldn’t disagree more.

The way we think about print services and how printing solutions are packaged just need to change slightly.

A perfect example of this is HP’s recently launched e-Printing solution, which is nothing more than the ability to e-mail your document to your printer’s e-mail address from anywhere in the world and swing by it later to collect the print-job, or simply tell your client it’s waiting for them at their printer.

This will undoubtedly change the way people print forever. But how will this apply to us in the consumables market?

Well, the important thing is that printing is still taking place, even though the printer itself might be located somewhere else than your client’s office. The fact is that a printer – possibly at the office of your client’s client – will still need its ink or toner cartridges to be replaced regularly.

It’s up to you to put the models in place that embrace this and many other new ways of working, so that you can capitalise on these opportunities when the shift comes.

And believe me, that shift is coming faster than most of us think.

Besides good memories, the World Cup leaves South Africa with more bandwidth than what it’s ever had before.

In fact, we as a country might finally be ready to embrace cloud computing on a local level. If we don’t capitalise on that, customers will move their cloud services offshore – and we will most certainly lose out.

While it’s difficult to map out exactly which business models will work, the one thing these kinds of changes generally herald is new cost efficiencies and more streamlined supply chains.

But if we don’t keep an eye on these developments, we’ll never know.

So in the spirit of knowing, let’s keep our eyes peeled and our ears close to the ground.

By: Anton Herbst, managing director of A.C.T

I’ve discussed strategy in this column a number of times before and in all likelihood, this won’t be the last time it comes up again.

That’s because a sound strategy is imperative to all companies’ success and often, companies that are in trouble as a result of any number of factors can turn to their strategy for answers on how to get through that difficulty.

While most business people understand the value of having a sound business strategy, few realise that unless their strategy is tightly married to the operational and tactical management of their company, it’s unlikely to get them anywhere.

Don’t get me wrong. Many companies are excellent at managing their business, and have neat, clean and efficient operations.

But, unless their strategy is present in the way they manage their operations, their company could potentially be headed in a direction that’s completely opposite to what the business heads want.

The strategy is after all where the understanding of who the customer is, what they need and how best the company can best service those needs resides.

The company’s strategy is also the place that the company’s posture towards opportunities and threats in the market, economy, legislative environment and business climate at large is defined.

If a company doesn’t marry its operational management to its strategy it’s likely to plod along year after year, missing out on opportunities or being broadsided by changing market forces.

Ironically, these are the companies that refer back to their strategies questioning why these factors affected them so badly, only to find that their strategy catered for these eventualities perfectly – the company just didn’t follow the strategy.

Marrying these two domains together is the only way to truly succeed, but it’s also far easier said than done.

It often means a complete re-engineering of a company’s measurement methodologies so that matters at a strategic level is translated into key performance indicators for staff.

This means, for example, where a stock-picker was previously measured on how quickly or accurately they picked an order, they will now be measured on how effective they are at building customer loyalty.

But can you imagine the reaction if you told your stock picking team that they will now be measured on customer retention?

That’s the reason the team’s key performance indicators need to be set up to drive the kind of outcome the business strategically required.

So, while customer retention is one of the strategic objectives of the business, the business will need to ask itself – from a stock picking perspective – whether it’s more likely to retain customers if stock is picked quickly or more accurately. And possibly entertain the idea that the answer lies in a combination of the two.

Figuring out what the tolerances or perfect combinations are, remains the challenge.

Knowing the answer to this however allows the company to operationally manage its stock-pickers to drive customer retention.

And that’s the reason the link is so important.

By: Anton Herbst, managing director of A.C.T.

Body copy: While it goes without saying that the single most important habit in running a successful business is evaluating its value proposition, every now and then it’s healthy to take some time, sit back and also evaluate the markets’ performance over the past while.

And what we can see from the past six months is that the enterprise market is recovering well from an extremely tough time, the SMB market is idling, the government market is dead quiet and ironically, the only market that’s showing some real mettle is the retail sector.

Broadly, it seems like the market sectors that traditionally relied on value-adds for their sustainability are taking the majority of the pain, while the sectors of the market with simpler pursuits, namely moving products into the hands of the consumer at low margins are doing well.

But that shouldn’t urge us to mimic what the retail sector does in our efforts to service the business market.

Instead we should note that the markets, which traditionally relied on value added services, are still slow and that maybe that’s because we’re not approaching those sectors with any real value proposition.

We’re still stuck in the mode of offering our customers cost-savings. In reality however, the market has been to hell and back over the past two years and by now, any costs that could have been cut by businesses, have been.

I think, we should be going back to our roots and looking to understand our customers better, so that we can figure out what they need and what we can do to deliver on those needs.

A sound understanding of one’s customer equips you with something every one of your peers doesn’t have and ultimately allows you to function in an environment where interesting new concepts, like cloud computing and software as a service, play.

Take Apple as an example. The company sold 300 000 units of its iPad – a product that didn’t have any precedent in the market – in the first day of it going on sale.

And this huge success was achieved in the aftermath of arguably the biggest downturn the world has seen in the last 100 years.

Apple somehow understood the market well enough to create something that was in demand, and understood their customers well enough to build and launch products that customers absolutely had to have.

In the same way, we should look a little further down the line – into the youth market – where the customer of the future and biggest chunk of the economy lives.

How are their needs and preferences changing? And more importantly, how is that going to shape things further down the line?

How does office supplies fit into this future, and a more sobering question, does office supplies even fit into this future?

The youth are using technology all the time and using it differently to the way it’s been used before. As an industry, we should aim to figure out how we do something to complement that new usage model so that our products are relevant.

Long-term sustainability is all about the future – and how what we do today allows us to remain relevant in the years to come.

By: Anton Herbst, managing director of A.C.T.

Body copy: While the triple bottom line is proving to be a great tool for companies and individuals aiming to be more responsible to the environment and their communities, it even has something to offer companies and individuals that are stuck in an archaic mindset that correlates success to financial performance.

That’s because, when one delves into the environmental and social impacts of your business, you find a number of steps you can take to not only reduce your environmental and social impact, but catalyse financial performance.

Logistics is just one example of this in practice.

Using a purely financial yardstick to plan your company’s logistics infrastructure, you would keep all of your stock in a centralised warehouse and send delivery trucks to each region, planning routes for the lowest running costs, while still maintaining a reasonable service level.

The triple bottom line approach to the same problem brings the community and environment into the mix – and thus seeks out innovative ways of maintaining acceptable service levels and good cost efficiency, while most importantly, having a reduced or neutral effect on the things around us.

And it can be a more cost effective way of thinking than purely focusing on the finances.

The fact that in the past, companies only looked at the financial aspects of their business and weren’t forced to be kinder to the environment and community around them, meant they never had to innovate. And innovation is where the real benefits are delivered.

So by contrast to the above example, since the triple bottom line would forbid waste, your company would in all likelihood analyze how much of its delivery fleet was running at half stock capacity and how much of it was full-up with stock on each run – and aim to increase the number of trucks running at full capacity, since this would reduce your business’s impact on the environment.

Inadvertently though, this would up the business’s efficiency levels and mean that on a per stock item transported basis, the logistics cost would be reduced – something that leaves more room for margin, or the ability to be more price competitive.

Your business would in all likelihood also look at the fact that there’s duplication of effort taking place in the channel.

Vendors, distributors and resellers all have logistics environments, and often these overlap – duplicating a ton of effort, cost and most importantly (in triple bottom line thinking) impact on the environment and inadvertently, the community.

By thinking innovatively about this, a distribution company can offer door-to-door deliveries to its resellers customers, thus bringing a new value added service on board, whereas a reseller can urge its distributor to create a door-to-door delivery service to their customers, since this will allow them to reduce their costs of doing business.

It’s important that all businesses realise the triple bottom line isn’t just about compliance – it’s about doing the right thing financially, environmentally and in the context of one’s community, and that it can be an opportunity for great financial performance.

All of these areas are mutually supportive and fuel each others’ effectiveness – and if your business’s financial reporting can benefit from being more environmentally aware and being a more responsible citizen, there’s little more reason one needs to embrace and focus on excelling at triple bottom line reporting.

For the longest time, shareholder value has been the primary driver for big business.

But an article I read recently in the Harvard Business Review, entitled “The Age of Customer Capitalism” disagrees with this concept completely, stating that it’s a fruitless pursuit, since stock prices (the key measure of shareholder value) are driven by shareholders’ expectations about the future, and these are uncertain at best.

In fact, the article goes on to say that historically, shareholders have earned lower returns since corporations adopted this as their guiding principle. Instead, companies should be making customer value the company’s top priority, just like Johnson & Johnson and Procter & Gamble have done, since these companies are generating some of the highest returns for their shareholders.

And giving this opinion some thought, I must say, I agree entirely.

After all, in a manner of speaking, one of the most powerful ways of delivering shareholder value is to be focused on customer value and this wisdom doesn’t only apply to large, listed entities – it applies just as much to small and medium sized businesses, that need their customers’ loyalty.

The concept is easier to understand than what it is to put into practice – mainly because putting these ideals into practice requires the answering of some sobering, uncomfortable questions.

Ask yourself whether the products your company sells are truly changing your customers’ lives or whether they’re, simply commodities your customers need in order to function?

More importantly, are you just going through the motions of supplying these products or are you looking for ways to deliver – what could well be a commodity product set – in a way that has meaning to your customers and allows them to function better than what they did before?

Are those products adding real value, or are you just reducing the price of them until they appeal to your customers?

And product aside, are you looking to add value in any way based on your abilities and understanding of your customer?

Right now, I’m sure the answers to all of these questions are no.

Our products are essential, but relatively commoditised and the way we’re delivering them to our customers don’t add any real value.

In the process, we’re leaving a ton of revenue on the table and are making ourselves susceptible to replacement by our customers, the moment a slightly sweeter (or cheaper) option presents itself.

Ironically, there are companies out there that are engaging meaningfully with our customers – and delivering value to them, under our noses.

They’re the ones coming up with ways to streamline our customers’ workflows and allowing them to get a handle on their internal processes. We’re just supplying them with the commodity printer cartridges to keep that business process flowing.

What we’re doing and what they’re doing differs substantially – and where we’re making a couple of points’ margin, they’re making healthy margins and annuity revenues – since as our customers’ businesses change, so the requirements for an adaptation to their workflow solution arise.

We’re missing a trick, and it’s only through asking ourselves the tough questions and moving towards a place where we aim to always add value to our customers’ lives that we will see the kind of success we all crave.

It’s in our scope of abilities – we just need to change our attitude.

As a small to medium sized business, your technology budget is precious. You can’t afford to squander money on solutions that don’t deliver real business benefit – and in the middle of protracted downturn, you’re probably more careful than ever about how you spend your money.

Yet there is a wealth of solutions that could enhance your business. So how does one go about choosing them? By remembering that technology is only truly useful to your business if it allows you to increase your revenues or decrease your costs. The worth of any technology to your business should be benchmarked against those goals.

No longer should you be seduced into buying a solution just because it’s new or to keep up with the Joneses – any solution you acquire must be measured against a clear business objective. Smaller businesses should probably take care not to buy into technologies too early in the hype cycle, but wait for them to offer tangible benefit. At the same time, you shouldn’t be left behind by technologies that could make a difference for your business. Keeping that in mind, what are the trends to watch for in 2010?

One element of your business that you should certainly be looking at is your online presence. According to the latest statistics from respected research firm World Wide Worx, more than 10% of South Africans are now online (some 5 million) and the number of connected people can be expected to double over the next five years.

Falling data costs (a gigabyte of ADSL data costs far less than it did just a year ago) means that your customers will do more online in the year to come and that you can do more online as well.

You don’t necessarily need to be setting up a major electronic commerce portal – that depends on the business you’re in – but you should be looking at what people are saying about your business using social networking tools like Twitter and Facebook and on customer service sites like HelloPeter. It’s an easy way to keep tabs on what your customers are saying and to respond to them, and the only cost is a little time.

In addition, you should also try to set up a web site if you don’t already have one and ensure that it’s up to date if you do. Thanks to innovations like Google AdWords, the online world also offers you some economical options for advertising.

Another important technology for the year ahead is mobile communications. Smartphones are finally at a point where they are easy to use and offer decent battery life; what’s more, data costs have fallen to a point where they are affordable. There is no reason for your managers and salespeople not to have email and calendar access wherever they go – this is a big potential money-saver since your employees can all use your time more efficiently.

They don’t need to come to the office to check email between appointments, for example. Receiving an email in a timely manner while you’re away from the office could sometimes spell the difference between closing a deal or not. It’s the sort of technology that is ideal for an SME – cheap and practical.

The world of technology is constantly changing and evolving, but the basic business principles remain the same. Choose technologies that are simple, affordable and have provable business benefits and you’ll reap a real return on investment from them without breaking the bank.