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Gerhard Nortje.
Gerhard Nortje.

Technology offers retailers respite in shrinking economy


By Gerhard Nortje: Business Development Manager, redPanda Software - Jul 6th 2018, 14:18

As business confidence in South Africa plummeted six points in June on the back of disappointing gross domestic product figures for the first quarter, South African retailers battle to achieve profitability, compounded by a PwC survey that names South Africa as the country with the highest rate of economic crime in the world. 

However, according to an expert in enterprise software and business process monitoring, the smart deployment of technology offers retailers the answer to chasing that elusive profitability in an environment where consumers are holding onto their hard-earned cash and economic crime is crippling businesses.

The RMB/BER business confidence index fell six points on June 13. This drop followed sharply on the heels of reports that that the economy shrank by the biggest margin since 2009.

Agriculture, manufacturing, mining and retail all registered negative growth in the first quarter, and Statistics SA figures released in June show retail contracted 1,2% in April, battling increased VAT and tough economic conditions.

Add the world’s highest rate of theft and fraud into the picture and it is no wonder business confidence is fragile. PwC’s 2018 Global Economic Crime Survey found that 77% of South African companies report that economic crime affects them, the highest figure in the world.
Gerhard Nortje, Business Development Manager at redPanda Software - a specialist enterprise retail software developer with operations in South Africa, Botswana and the UK - said that companies are turning to technology in their battle with theft and operational inefficiencies that directly throttle the bottom line.

PwC agrees, and in its Economic Crime report, it concluded that: “On the fraud defence front, organisations have a wealth of innovative and sophisticated technologies aimed at monitoring, analysing, learning and predicting human behaviour… Others jump in too late and find themselves behind the curve in the struggle to catch fraud or flag potential trouble spots.”

“At redPanda Software we work very closely with retailers. The amount of money lost through economic crime is astounding. We have a client who lost money to the tune of millions because of cleverly conducted fraud by its own employees. We are able to end that in real-time with technology. Others complain about asset misappropriation or cumbersome operations and inefficiencies that result in huge amounts of money being lost,” said Nortje.

“Business process monitoring offers businesses an affordable and effective way to be proactive and manage their businesses, cutting the leakage off at the cause.”

The socio-economic situation in South Africa is at a precarious point, and as ratings agencies decide the fate of the country’s sovereign debt rating, companies are forced to look inwards in order to tighten operations in order to survive and thrive in the uncertain environment.

Monitoring has evolved to where it offers near real-time interventions. Latency costs money, and monitoring of business processes gives companies a chance to react immediately and prevent losses, whether they come in the form of theft of negligence.

“There is very little latency in our solutions. Everything happens on a near real-time basis. In other words, a company can stop the theft or wastage as it happens. It is too late once a recon happens - the money’s gone and time is lost,” said Nortje.

As companies all over the world, and specifically in South Africa, focus on reducing operational costs, one of the biggest barriers to deploying technology, such as software monitoring systems, is the high cost.

In its economic crime survey, PwC concurs, saying: “Technology can be prohibitively expensive to buy and adopt across a large organisation, and the decision regarding what to purchase, and when, is a delicate one.”

“All-inclusive enterprise solutions come with great capabilities and monitoring of your IT estate,” said Nortje. However, companies operating on tight margins cannot afford to wait for real returns on investment.

“redPanda Software has a very modular solution. You don’t need to buy an enterprise monitoring system, instead, you can monitor just that element of the business process that needs focus. We believe that is the future - not all clients want to be tied into a massive vendor solution. They want to pay for what they actually use."

“As you grow, or as your requirements change, you can add devices and expand the services you use. In other words, we can compartmentalise our solutions and the return is almost immediate.”

Currently, monitoring broadly focuses on devices and IT infrastructure said Nortje. “What we feel is missing is the monitoring of business processes and transactions. We monitor a device, let’s say a point-of-sale device and card payment device, and at any time that the device is unplugged, tampered with, goes offline or displays any other anomaly, we flag that device and create an immediate alert that goes to the operational manager within the client environment who is able to deal with the situation immediately."

“A company we know of was losing almost R50-million because of staff that found an operational loophole. Our solution closes loopholes such as these.”


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