A significant amount of time has been spent refining and revising the strategy for EOH to ensure that the Group is well positioned to take advantage of the next wave of South Africa's changing ICT industry, while at the same time ensuring the business is stabilised after the events of the past year.
A major focus of the year included a critical analysis of the portfolio, both in terms of refining the Group's focus and clarifying drivers of value over the longer term.
The initial phase of the portfolio review showcased, at the half-year, a more streamlined business comprising three major pillars with clearer alignment of focus and groupings of value:
An ICT business focused on the traditional technology system integration.
The NEXTEC grouping of a variety of businesses at various stages of incubation for growth and scaling.
A group of high potential IP companies with scaled technology, ready to be taken to market with partners.
This was accompanied by a significant scaling back of our international operations, selling those businesses where we had limited competitive advantage or scale (e.g. international SAP operations) and integrating high potential businesses back into the major pillars.
A further in-depth review of the Group's capabilities has led to further evolution and clarification of the business model.
ICT ('iOCO')
The ICT business has been successfully rebranded as iOCO. The following businesses have been launched under the iOCO umbrella and form the core of the business:
Consulting and advisory business to support clients through the journey of digital transformation, demystify choices and facilitate the design of custom solutions for client needs.
The traditional ICT business comprising enterprise applications and systems integration, hardware and network solutions businesses, and software reselling supported by an extensive managed services offering.
The next evolution of the systems integration business offering: extensive application development, data and analytics intelligence, digital automation of industries, cloud advisory and implementation.
NEXTEC
The collection of NEXTEC businesses includes a wide range of businesses at various stages of maturity covering business process outsourcing, through to ioT devices and digitisation of engineering and construction businesses. This portfolio requires further scrutiny to determine the appropriate growth path and will result in a significantly smaller and more focused NEXTEC:
The business process outsourcing is being assessed in terms of the ability to scale the IP.
The engineering and construction business is challenged by the Group's capital structure.
IP
The IP portfolio comprises a series of companies which are ready for the next stage of scaling.
The recent sale of CCS to RIB Limited represents the future template for growth of these businesses. The partnership with RIB allows EOH access to a global partner with international scale that offers cross-selling opportunities for EOH and access to a previously inaccessible customer base.
This approach, aimed at expanding reach and scaling faster, will be replicated for the other IP companies and we are therefore currently actively pursuing partners for Sybrin, Syntell and Information Services.
Under the new operating structure, the Group is well positioned to support client needs while balancing its portfolio diversity and focus.
1 70% of Construction Computer Software (CCS) was sold to RIB Limited for an amount of R444 million as at 31 July 2019.
