Group structure

Our mission, group structure and nature of business

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NEW COMPANY STRUCTURE

What follows is a description of a rationale for the changes made to the Altron company structure as outlined in the new company structure diagram. When reading this description and interpreting the diagram, it is important to refer to the diagram key at the bottom. Furthermore, it is important to note that this discussion covers only the changes that have been made – it does not provide detail on structures, divisions, businesses and operations which have not changed.

BACKGROUND TO THE NEW STRUCTURE

Altron’s long-term strategy to create a single listed entry point for investors, and to optimise its portfolio and capital allocation was realised during the year when it acquired the remaining minority shares in Altech at a three-year low share price, and delisted the Altech entity. This watershed move has paved the way for the reorganisation of Altron and the alignment of its various business assets, allowing it to capture the full benefits of scale and integration, and ultimately drive the next growth wave for the group.

The structure of Altron has changed such that Altech and Bytes have been integrated under a new entity called Altron TMT (which stands for Telecommunications, Multi-media and Technology). As such, the Altech and Bytes entities have been most significantly affected by the change. The sub-holding company known as Powertech, on the other hand, has undergone very little change. It now falls under the entity called Altron Power.

ALTRON POWER

Altron Power comprises the divisions of Powertech Transformers, Powertech Cables, Powertech Batteries, Powertech Systems Integrators and Powertech Business Development.

During the year two new structures – Powertech Renewables and Powertech Rail – were created under the Powertech Business Development division. While these are not new businesses per se, the formal structures to house Altron Power’s activities in the renewables and rail sectors are new. These are two important new growth areas for Altron Power and the formalisation of the Powertech Renewables and Powertech Rail divisions will allow the company to dedicate focus and energy on capturing the significant value available in renewable energy and rail projects.

ALTRON TMT

OBJECTIVES, FOCUS AREAS AND OUTCOMES

The structure will deliver a number of benefits. The design of a joint Altech and Bytes Telecommunications, Multi-media and Information Technology (TMT) business model and organisational structure will limit duplication to improve profitability; incubate growth businesses and coordinate our international growth strategy; pool together specialist or scarce resources to fully leverage skills and drive innovation and economies of scale; and organise the sales force to maximise cross-selling opportunities.

The formation of Altron TMT will also enable us to become a more customer-led organisation and to maximise the significant cross- and up-sell opportunities that exist between Altech and Bytes. Integrating the two entities will allow us to develop a more holistic view of the needs, roles and responsibilities of the customer interface and to identify our top 15 customers. From there, we can implement a joint customer engagement model to facilitate the cross-selling and up-selling of services.

Finally the integration of Altech and Bytes will facilitate better cost management and the removal of unnecessary duplication. The understanding, design and implementation of a shared services facility has been a key priority in this regard. The adoption and implementation of the shared services model has been accompanied by clear mandates, priorities and structures.

 

 

To achieve the abovementioned objectives we have developed a clear roadmap with five different workstreams, each with its own focus areas. These are outlined below:
   
   
1. Sales enablement and cross- and up-sell
     
  Prevent revenue slowdown during the implementation of Altron TMT
  Incubate initiatives to increase revenue through cross-selling and up-selling opportunities that will be facilitated by the new organisational structure
  Leverage relationships in key accounts across the group
     
2. HR, Culture and Organisation
     
  Ensure top talent retention
  Design core organisation processes
  Deal with employee compensation and incentives
  Define the future culture of the new organisation and implement a culture change programme
     
3. Communications
     
  Rigorously communicate our plans to our employees, customers, suppliers and partners
  Co-ordinate communication updates to employees
  Manage various electronic sites for internal Q&A purposes
     
4. Corporate
     
  Manage the transfer of assets
  Manage BEE structures
  Manage non-core asset disposals
     
5. Shared Services
     
  Design and implement a shared services organisation to optimise costs across Altron TMT
 

STRUCTURAL CHANGES

The structural changes to each division, and the rationale for these changes, are discussed below.

TELECOMMUNICATIONS DIVISION

Altech Netstar

No changes made.

Altech Autopage

Altech Autopage is now a mobile and internet solutions provider (ISP).

Autopage ISP was formed by combining what was previously Altech Technology Concepts together with the BytesNet business that was split out of Bytes Systems Integration.

Mobile wallet solution, Altech Eyenza, has been moved from Altech Business Development following its successful incubation there. Its move into this division was motivated by the fact that it will allow us to leverage the extensive retail presence of Altech Autopage to extend the reach to more customers, and because it will facilitate the bundling of Altech Eyenza mobile payment solutions to Altech Autopage pre-paid customers. They will now be able to buy pre-paid electricity as well as pre-paid airtime from their mobile devices.

Altech Radio Holdings

No changes made.

BYTES SYSTEMS INTEGRATION

Previously held under the Bytes Technology Group, Bytes Systems Integration has been split into three. As already discussed, the BytesNet ISP business has been incorporated into Altech Autopage. The software and IT assets in which we own the intellectual property (IP) have been moved into Bytes Core Business Software (discussed further below under ‘Information Technology Division’). What remains is therefore those aspects of the business in which we act as a reseller of hardware for original equipment manufacturers (OEMs).

Bytes Africa, which was previously part of Bytes Systems Integration, has remained part of this division.

BNTech, a new acquisition in biometrics, physical and other security solutions, is housed within Bytes Systems Integration.

Altech Card Solutions was split and the e-security, crypto and managed solutions aspects of the business have been moved from Altech into Bytes Systems Integration. Doing so removes any duplications that previously existed between Altech and Bytes in this line of business.

Finally, Altech Collab which houses our Huawei business, has been moved from what was Altech Business Development into Bytes Systems Integration, after having been successfully incubated and commercialised. This will allow us to leverage the sales capacity and existing systems integration capabilities within Bytes Systems Integration.

MULTI-MEDIA AND ELECTRONICS DIVISION

Altech UEC

No changes made.

Arrow Altech Distribution (AAD)

No changes made.

INFORMATION TECHNOLOGY DIVISION

Bytes Document Solutions

No changes made.

Bytes Managed Solutions

No changes made.

Bytes Core Business Software

This is an entirely new operation that combines certain IT assets from both Altech and Bytes where we own the IP. It combines Bytes Universal Systems , the IP-rich applications of Bytes Systems Integration, Altech ISIS and Swisttech.

Its focus is to sell high-value software and end-to-end business solutions to customers. These include security solutions, border control systems, big data and forensic analytics, and municipal applications, to mention but a few.

This operation also houses those software and IT assets where we own the IP, from what was Bytes Systems Integration before it was split in three operations (discussed earlier).

Swisttech has been absorbed into the South African and French parts of Altech ISIS which have been moved from Altech into this operation. There are similarities in the skills sets and solutions these businesses provide to customers. Examples include business analysis, billing platforms and big data applications.

Bytes Secure Transaction Solutions

This new operation combines Altech’s payment, transaction and switching businesses together with Bytes Healthcare Solutions.

As discussed earlier, Altech Card Solutions was split. The aspects of that business that are now housed in Bytes Secure Transaction Solutions include Verifone and Gemalto EFTPOS terminals business, as well as the transaction switching business that chiefly services the financial and retail business verticals.

After year-end, we acquired all the minority shares in Altech NuPay to allow this business to be moved into Bytes Secure Transaction Solutions. Doing so removes duplication and leverages synergies that exist, chiefly between Altech Card Solutions and Altech NuPay.

Bytes People Solutions

After year-end, Bytes People Solutions launched the Bill Venter Academy. Based on the philosophy of the old Altech Academy, the Bill Venter Academy has two areas of focus.

On the one hand the Bill Venter Academy will deliver all the internal training, capacity building and skills development programmes to all Altron companies. In doing so it will house all such programmes that were previously run independently through Altech, Bytes and Powertech.

On the other hand, Bytes People Solutions will act as a commercial people solutions business, delivering the training and capacity-building services that have always formed the core of Bytes People Solutions’ business. It will also house the Business Process Outsourcing part of Bytes People Solutions.

Bytes UK

In April 2014 we disposed of the Bytes UK Document Solutions business as this had been identified as one of our non-core assets. No other changes were made to the Bytes UK business.

BUSINESS DEVELOPMENT DIVISION

The role of the business development division is to incubate new businesses and innovations to the point that they can be moved into the appropriate Altron TMT division and successfully commercialised.

Altech Eyenza and Altech Collab, moved into Altech Autopage and Bytes Systems Integration respectively, are two examples of how successful this division has been in achieving its objectives.

It previously held Taxi Payment Solutions which was due to be piloted in the mining communities in the North West province. However, this project has been put on hold following the unrest and political instability currently being experienced in this region. We still own the IP in this business and will bring the project back on-line when it is appropriate to do so.

The Business Development Division therefore currently houses only Altech Stream Broadband Communications. This business is developing an innovative, converged, end-to-end solution that is expected to be launched in the consumer market in the coming year. As such, we are actively looking for new opportunities and innovations to incubate through the Business Development Division in the year ahead.