Business Transformation

Last week Livingstone hosted the Joint Annual Business Conference collaboratively organized by the Zambia Institute of Chartered Accountants, the Association of Chartered Certified Accountants, and the Chartered Institute of Management Accountants. The theme of the conference was ‘Innovating for a Sustainable Future’. Under this theme, the spotlight fell on the challenges of ‘Transformation of Businesses for a Sustainable Future’.

Businesses in Zambia today are faced with many challenges in their quest to grow and remain viable for the foreseeable future.

The rapid pace at which information flows across the globe, and the constantly evolving technology age that we live in, offers no mercy to businesses that stagnate or ignore the demands of the market.

In Zambia, we have seen a proliferation of Fuel Stations along our roads and highways. The consumer demand now, is to be served within a few minutes of arriving at the pumps. If this demand is not met as expected, the motorist will drive off to the next Fuel Station for more efficient service. The Fuel Station proprietors that have responded positively to this challenge have embarked on a training program on customer response in order to meet the rising demands. This phenomenon is prevailing over Internet Service Providers, Mobile Phone Service Providers, Supermarkets, and Restaurants. The banking industry provides a special service that impacts on how the private sector is being serviced and facilitated in its quest for growth. With the advent of five new banks opening their doors to the public the scramble for better services to customers is on, and new innovative products are being marketed every day. The looming competition has already brought products such as personal loans and house loans on the market with very easy to apply guidelines.

Modern day business demands puts pressure on businesses to disclose the company’s business dealings to staff in an effort to empower the staff to make the company more productive. Any company that is looking to borrow money from the banks will need to acknowledge that Management Accounts are a basic requirement by the bank to ensure that the money made available to the business is being used for the intended purpose. Accounting staff are therefore required to have open access to the company accounts to provide the necessary information to the banks. Accountants are expected to keep a tight control on company income and expenditure in relation to fiscal budgets. To achieve this, companies must allow relevant staff access to bank accounts and documentation of all business dealings.

Successful private companies that are proprietor owned can only cross the barrier to corporate business if the systems in the company are predictable and pro growth. The systems must be universally understood, should have clear levels of delegation, and should have open systems for reporting. Staff must be held accountable, clear goals should be set, training systems must be in place, and methods for monitoring and evaluation must be constantly at work. Opportunities for re-engineering of the company and movement of obsolete stocks are constantly being looked at to keep the corporate vibrant and competitive.

Technology impacts greatly on modern businesses. The use of Local Area Networks, Virtual private Networks, Access Controls Systems, and Internet Banking are tools that can lunge a company way ahead of its competitors. In addition, Technology offers the opportunity to create new knowledge and services that keep a business viable and profitable.

Customer care is fast becoming the ‘big’ booster to many businesses. Customer care means quick response on issues, calendaring appointments and meetings, keeping useful knowledge about the service provided, transferring tasks to another colleague when overwhelmed, engaging in team work, being courteous, showing commitment to work, letting an issue go when the cost is too high and, effective communication. Customer care is a cross cutting service in all sectors of the economy and businesses, and in many instances either brings in new customers or pushes existing customers away.

Collaboration in developing economies is essential if businesses are to evolve from small and medium enterprises into large corporates. Strategic partnerships assist companies to share their business risks and burdens. Collaboration allows small companies to tackle big business and focus on regional trade. Consolidated imports from the Far East make the cost of the goods cheaper for each member of the consortium due to the lower bulk purchase pricing and large volume shipment discounts. The Newspaper vendors at the traffic junctions have had to collaborate or perish because the customers want to purchase three different papers from one vendor. The vendors sort out their accounts at the end of the day when all the newspapers have been sold.

There is always room for innovation and new products in the world of business. For instance in Zambia the option of integrating Tourism with Mining has not been explored. The option of turning Zambia into a hub for goods and services to supply the eight neighboring countries is only talked about but not acted upon. There are opportunities for developing Zambia into a regional telecommunications hub with options for building International Call Centers. Business opportunities abound in Cultural and Traditional Tourism beyond the well known Kuomboka Ceremony and a few others. Food security is a major concern for all countries and Zambia is no exception. Opportunities for growing large scale rice and fish challenge our minds every day. The processing of our local fruit has still not been established in any meaningful way.

Businesses are now challenged to get more involved in policy development and planning of the local economy. Zambia is plagued with the burden of European Union Economic partnership Agreements, SADC Trade Protocols, COMESA Free Trade Area rules and, the World Trade Organization global trade regime and rules. The private sector should be the instrumental player in all these negotiations but seldom turns up at the discussions. Decisions are made and documents are signed and the private sector is expected to comply. The business that intends to survive into the next decade will have to be an active participant in these negotiations so that the business interests are taken into account and decisions are made that will support and facilitate the growth of businesses. Currently, we see very little input from the private sector in the formulation of the National Fiscal Budget. The challenge is to develop sincere and strategic partnerships amongst the Government, Private Sector and Civil Society that will address the concerns of all three parties.

There will be much give and take but at the end of it all there will be consensus on the way forward such that private sector will forgo some issues but benefit on others. With time the businesses will flourish and meet the larger expectations of the National Vision.

At the top level, companies must be alert to issues of corporate failure that have been highlighted in the big corporate scandals around the world. The value of impartial Annual Audits cannot be over emphasized. The futures of businesses are usually reflected in the quality of the Audits done. The Audit reports are the single documents that are drawn up solely for the good and use of the Board of Directors and Shareholders of a company. Any compromise in this activity undermines the future of the company as we have witnessed in the Enron scandal and many others.

It is quite clear that the Accounting profession at all levels plays a pivotal role in facilitating the transformation of businesses such that they become equipped to grow in the face of global changes and various domestic pressures.

It can be argued that Accountants could be held singularly responsible for the success of businesses or the demise of a company because of the strategic positions that they hold from which all major business decisions are made.

The Zambia Institute of Chartered Accountants, the Association of Chartered Certified Accountants, and the Chartered Institute of Management Accountants are challenged by the nation to continue to collaborate, but more importantly, to promote their members to take up the responsibility of being in the forefront of business decision making.

This challenge is in line with the universal principle that states ‘Information and Knowledge is Power’, and the use of ‘Valid Information and Knowledge leads to powerful and appropriate decisions to ensure a prosperous and sustainable future’.

Published 12 August 2008