A week ago, Mr John Waibochi was having drinks with his peers at a Nairobi hotel discussing his child’s birthday party held the previous weekend.
‘Murats’ (as his peers call him), concerned about what the future held for his child, spoke passionately about how he wanted to create opportunities for the millions of unemployed youth in Kenya. And on Wednesday night, the 40-something former St Mary’s graduate was catapulted to the world stage when he received a Sh80 million ($1 million) grant from mobile manufacturer Nokia for his software creation.
“In the future, success will depend on ability to adapt to technology and embrace mobility. This is one of the avenues that companies can now easily use to ensure real time access to the entire supply chain,” said Mr Waibochi, the chief executive of Virtual City, a software company, which he founded in 2000.
The firm’s solution dubbed Mobile Distributor — aimed at streamlining the supply chain for distributors and retailers of fast moving consumer goods in emerging markets — emerged the winner in the Nokia’s Growth Economy Venture Challenge.
The product is designed to improve distribution systems for small and medium enterprises (SMEs) in the fast moving consumer goods market.
The solution aims to boost profitability of SMEs by increasing the number of transactions and improving inventory management, the accuracy of records and reporting from the field.
“It enables distributors and retailers to sell in the market using the Nokia mobile phones for their sales, deliveries, orders and cash collection,” said Mr Waibochi.
The Nokia Growth Economy Venture Challenge calls on innovators from around the world to create mobile products or services that can improve the lives of people in developing nations and compete for the chance to win venture capital investment of $1 million.
But industry analysts point to the fact that Virtual City beat 54 other products from around the world to win the challenge as an indicator of wider developments in the country’s software industry.
Although official figures from the ICT Board indicate that the country makes just over Sh700 million from software development on an annual basis, the figure is said to represent just a fraction of what several Kenyan firms make from the sector.
Local software house Compulynx, which develops point of sale solutions for the retail sector, said it made Sh400 million in software exports in 2009.
“This is definitely a growth market for Kenya. The software industry has recorded almost double growth annually for the past couple of years. The challenge is for us to create solutions that the world does not already have,” said Mr Brian Ambajah, the head of marketing and business development at Turnkey Africa, a local software development house.
Analysts say that the country is carving a niche for itself in designing unique mobile solutions such as the one for which Virtual City was honoured.
This is attributed to the relatively high uptake of mobile services in the country and the availability of a rising crop of young university graduates specialising in technology-related fields.
Export destinations include countries such as Sweden, Nigeria, and India, reputed to be the world’s software development hub.
For the last five years, international firms such as Google, Facebook, Nokia and Blackberry have combed Kenyan universities searching for developers able to create unique solutions for mobile phones or the internet.
The company’s host annual conferences where they ask students to create solutions for world problems, offering them the opportunity to be absorbed into the companies or to interact with global thought leaders on future trends, with Strathmore University emerging as a popular venue for recruitment drives.
“There is significant entrepreneurial, innovative and technical talent in East Africa that can be harnessed in this area,” said Judith McHale, US Under Secretary of State for Public Diplomacy and Public Affairs.
The US Department of State is one of the most recent entrants into the race for a larger share of the local software market, which aims to become part of the global software sector currently estimated to be worth $1.2 trillion.
In the last year, a string of initiatives have been launched, aiming to position Kenya as a global software hub, hoping to tackle industry challenges such as how to get financing for ideas and creating links between companies and individual developers.
Some of the biggest challenges developers face include finding financial backing, sourcing equipment, and bridging the divide between industry and education systems.
Revenue earners
In recognition of the potential of the sector to contribute to economic growth, the government has hinted that it will shift its focus from the business process outsourcing industry to the Software and Animation sectors, as both have proved to be attractive revenue earners for local developers.
The ICT Board plans to adopt a cluster approach, using an incubation programme to focus on upcoming entrepreneurs who want to grow in applications development both for local and export markets.
“For the established, a software developer standard that is globally accepted is in the offing to ensure that products from Kenya and the region are competitive and give the client assurance on quality. We believe this will set the country off on a success trajectory and acceptance as a global player,” said Paul Kukubo, ICT Board chairman.
Analysts view Mr Waibochi’s achievement as the trigger needed to boost Kenya’s software development aspirations.
Ten year-old Virtual City has designed technology solutions that have enabled local and international organisations to maximise the value of their investment by aligning IT with their business requirements, increasing agility, managing risk and making full use of IT infrastructure.
Mr Waibochi said his goal is to help companies realise the need for innovative use of technology that would save them money, instill efficiency, boost productivity and improve their bottom-line.
For Nokia, the $1 million award provides a “solution that will bring value to a large number of beneficiaries comprising thousands of small and micro enterprises in the fast moving consumer goods (FMCG) market through the smart application of mobile business and cashless payment technologies,” it said in a statement.
The project is expected to generate revenue for the partners Virtual City and Nokia, while increasing the income of the stakeholders in the supply chain by opening up increased product sales coupled with additional benefits of mobile payment capabilities, transaction fees revenue and loyalty programme benefits, facilitated by inexpensive and affordable mobile phones.
The money will be invested in venture capital and carries a commitment from Nokia to help turn Mr Waibochi’s idea into a business reality.
According to Mr Waibochi, mobile solutions such as the one that won the award allow managers to make informed decisions at any time of day since they are accessible to what is happening in the field real time.
“For instance, a manufacturing company can easily adjust production depending on the latest demand statistics on the market saving on losses in revenue due to less stock or waste resulting from unsold stock,” he said.
Virtual City has developed a number of mobility solutions to cater for the needs of supply chain companies locally and beyond.
The tea industry has taken up some of these solutions and the firm is targeting half a million tea farmers by the end of the year.
“We have already covered 60 per cent of the tea farmers and going by our progress, we intend to bring on board the remaining by the end of the year. This will see tea farmers benefit from revolutionary technology that improves efficiency and transfer of data at tea buying centres,” said Mr Waibochi.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
