How Softnet won new frontiers

Softnet Chief Information Officer Gilbert Herman speaks during an interview with The Citizen. PHOTO|PETER EDSON

What you need to know:

  • The revenue for Softnet Technologies Ltd, which was the overall winner of the 2015 Tanzania Top 100 Mid-Sized Companies Survey, rose by 16 per cent to reach Sh12 billion in 2017.
  • The firm’s profit also rose by 33.3 per cent to reach Sh750 million, largely because the company’s deals are transparent as required under the Tanzania Top 100 Mid-Sized Companies Survey

Dar es Salaam. The overall winner of the 2015 Tanzania Top 100 Mid-Sized Companies Survey, Softnet Technologies Ltd, saw its revenue and profit increasing significantly in 2017, thanks to their participation in the survey.

The 12-year-old company recorded Sh12 billion in revenues and Sh750 million profit, an increase of 16 per cent and 33.3 per cent respectively in 2017 compared to the previous year.

The Top 100 Mid-Sized Companies Survey, which started in 2011, is the brainchild of Mwananchi Communications Limited (MCL) and KPMG, a top audit, tax and advisory firm.

Speaking to The Citizen in an exclusive interview, Softnet chief Information officer Gilbert Herman said their participation in the Survey exposed them to more clients.

“We started getting more contracts because of the increased visibility and trust,” said Mr Herman ahead of the eighth Top 100 Mid-Sized Companies Survey.

NMB Bank Plc is the main sponsor of this year’s event, which was officially launched on July 10. Other sponsors include Dar es Salaam-based Hyatt Regency Hotel, Dar es Salaam Stock Exchange (DSE) and Azam TV.

The purpose of the Top 100 Survey is to identify Tanzania’s fastest growing medium-sized companies and highlight their entrepreneurship success stories.

“Top 100 has been helpful to us. In combination with other growth strategies, it has contributed to our 2017 good performance,” says Mr Herman.

They also tightened controls in expenditure and shifted their focus to products that yield bigger margins, paving the way for growth. As the business expands, the number of Softnet employees has also grown from 70 in 2015 to 100 currently.

About 15 per cent of their revenue goes to research development and training. “We train our staff so they can offer quality services to our customers. We are trying to deliver what we promise to create and maintain a good relationship with our clients,” Mr Herman.

He believes that the company will be able to grow its revenue and profit by between 25 per cent and 30 per cent this year like in the previous one.

“We have what it takes to hit the target. We are now seeing light that gives us hope of accomplishing more,” says Mr Herman.

Softnet, which was registered in 2002, started operations in 2006. The first time they participated in the Survey was 2013, and the reason they did so was their belief that it was a good opportunity to gauge themselves against peers. They never dreamt that they would one day emerge as overall winners of the Top 100 Mid-Sized Companies Survey.

The 2015 success was not an overnight thing. The company moved from 89th position in 2013 to 37th in 2014 before they became overall winners in 2015.

Dar es Salaam-based BQ Contractors were the inaugural winners of the Top 100 Survey in 2011. In 2012 and 2013, the Mwanza-based Kipipa Millers won the accolade. In 2014, it was Arusha-based Helvetic Solar Contractors that emerged winners and were followed by Softnet Technologies Limited in 2015. Flightlink Ltd and Dar Ceremica Centre 2001 won in 2016 and 2017 respectively.

The winners of the eighth edition of the renowned Tanzania Top 100 Mid-Sized Companies Survey will be announced in October this year at a gala dinner to be held at Hyatt Regency Hotel in Dar es Salaam.

Companies covered in the Survey are those whose turnover ranges from Sh1 billion to Sh20 billion. This is the main criteria for participation. The companies also have to provide past audited accounts. Banks and insurance companies are not eligible to participate.

Why participate in Top 100?

Most ICT companies in Tanzania at the time were foreign owned. Softnet saw the absence of locally owned ICT companies as an opportunity.

“We saw it as an opportunity partly because we understand the culture. We can serve customers better,” says Mr Herman.

Challenges

Access to credit facilities to enable mid-sized companies to grab emerging opportunities or fund long term projects is a big challenge, according to Mr Herman.

Another challenge is delays in getting paid when they do business with public institutions. It takes six months to one year (instead of 30 days) for them to be paid, Mr Herman claims.

Lack of qualified staff is an issue. He calls for higher learning institutions to provide students with skills which match the job market.