Leading the way in transforming operations in East Africa

NEFC Group is a Dubai-based holding company that operates dealerships supplying machinery and heavy equipment in the Horn of Africa. It has nine subsidiaries and has more than 1,000 employees. The company supplies heavy equipment from major brands, including Hyundai CE, Massey Ferguson, Nissan and Cummins. It has recently deployed Infor M3, a powerful equipment-focused enterprise resource planning (ERP) system to help it gain greater control of its business while raising efficiency and agility. Intelligent CXO spoke to Eiad Abushaireh, CIO at NEFC Group, and Mohammed Mandil, Heavy Equipment Business Managerat NEFC Group, about the company’s own Digital Transformation and how it is focusing on helping its customers embrace digital.

Eiad Abushaireh, CIO at NEFC Group:
Can you give me a brief overview of NEFC Group?

NEFC Group is strongly engaged in the construction, infrastructure, transportation, agriculture, mining and power generation industry in East Africa. We specifically focus on ensuring that we are delivering to our customers a reliable product with local support, which maximises the value of each investment. The group has established its presence in five different countries with a collective population of over 150 million and GDP of US$100 billion. NEFC employs over 1,000 staff members across nine distinct companies. Our annual turnover is approximately US$100 million and has a rich history of presenting and expanding a diverse range of leading international brands.

How has the company grown in recent years?

We have experienced significant growth in recent years, expanding our presence to several countries in East Africa, including Ethiopia, Djibouti, Somalia and South Sudan. Our subsidiaries, which were established in Ethiopia back in 1965, have played a key role in the economic and infrastructure development of the country and Ethiopia remains the biggest market for us. Djibouti is also an important trading hub and the NEFC presence there has been critical to its geographical expansion.
In Somalia and South Sudan, we have established local companies to access the significant growth opportunities in these countries, including road construction, power generation and primary services.
Despite the instability in Somalia, we believe in nurturing local talent and establishment to drive growth and deliver massive potential in these countries. Our position is to provide a high standard of service that enables us to build the trust with our customers and grow as a key player in the development of East Africa.

Describe the Digital Transformation journey in NEFC.

As a CIO, my primary goal is to ensure that our organisation’s IT infrastructure and technology system are aligned with the overall business strategy and goals. When I first joined NEFC, my immediate focus was to start our Digital Transformation journey, which has been a challenging task, especially since East Africa is still a green field in terms of Digital Transformation.

To kick off our journey, we began by implementing the Infor M3 ERP system in one of our main subsidiaries, Reis Engineering. Infor M3 has provided us with a lot of functionalities and features that have helped us adapt our processes and make them lean. It has also enabled us to manage our inventory supply chain more efficiently, which has resulted in better decision-making and cost-saving.

Our next step in the Digital Transformation journey is to implement the Infor Customer Lifecycle Solution. This will enable us to carry out a range of essential tasks, including managing customer prospect information, keeping track of competitors, creating opportunities and managing customer issues and resolutions. Also, we have planned to roll out the Infor M3 system to the other remaining subsidiaries to align our operations and the processes and to provide a full enterprise solution to the company.

In NEFC Group, we are proud of our use of modern technology to improve our customer experience. We regularly update our digital tools to stay ahead of our competitors in East Africa and lead in our industries and products.

Mohammed Mandil, Heavy Equipment Business Manager:

Describe your customers and their appetite for digital.

Our customers are all in the Horn of Africa. Through the appearance of cellular network, the Internet really picked up in Africa in recent years. We’ve seen tremendous growth in terms of consuming digital content and seeking information about our products. Our customers often use the Internet to seek best practices from other companies, contractors or other major projects happening internationally. In terms of social media, it’s a bit like everywhere, people connect to social media to connect with their peers. We see it more and more in the application of business opportunities and marketing.

In our neighbouring country, in Kenya, I don’t know if you have heard of M-Pesa, it is a digital wallet and online payment services. We started seeing it appear in Djibouti this year. So, this is very much an infancy phase in our region. We haven’t seen any of it in Ethiopia or South Sudan or Somalia yet, but we do expect it to soon. And we do want to be ready for this as we see massive opportunity.

If I was to describe our heavy equipment customers today, people purchasing heavy equipment don’t just want to purchase a machine. They use machines in very harsh applications and machine uptime is very important. Important factors to describe customer behaviour is all about product support. As a dealer, we support the customer to ensure the machines are reliable.

Training and job site assessments are also key challenges that they have. A good 90% of our customers are not versed in technology. Technology is something that they fear because it’s complex. If it goes wrong, they don’t know how to repair it – it is something that they avoid at the moment. Machines that they purchase are simple, and they’re reliable.

If I was to describe the buyer personas, many of them would have the tendency to follow what works for their peers. The day that somebody trustworthy uses technology and finds its application easy, I expect a lot of our customers will start transitioning towards adopting technology on their machines. That would enable the aspects of the digital use of our machines, which is getting data on machine utilisation, how to best predict its maintenance schedule, how to analyse different areas of the job sites, which operators are efficient and less efficient. We expect the mining industry to lead the way because these are customers that are a lot more versed in managing these machines.

If I was to summarise our customers’ appetite for digital, I would say what makes a good customer experience for them? I think there are three aspects that really matter. It’s feeling secure – our customer needs to feel secure about the purchase and their ability to utilise a machine properly. They want the feeling to be appreciated. It’s important that our customers have a customised attention. And finally, a key aspect is ease of doing business, and I think that in that sphere there will be a lot to do in terms of digital.

How do you plan to increase your presence?

I would categorise three pillars for growth strategy in the region. The number one is focus on regional growth. Ethiopia really is the economic powerhouse of the region. The country has gone through a lot of development already. The key areas of strategic importance economically for Ethiopia are the industries of exports, agricultural exports and mining minerals exports. These are going to be key markets for us.

Djibouti is geographically a very important and strategic country in the region. It’s a gateway for Ethiopia into international trades and the gateway into Somalia. Somalia is a very difficult country to access so being present in Djibouti opens up these gateways. Djibouti really is an international market.

We then have Sudan and Somalia. These countries have tremendous growth opportunities. Instability within the region is a big detractor in the potential for these countries. But being there, being present and being established before the big growth happens is extremely important. It will build company reputation. In terms of primary sectors in Somalia and South Sudan, agriculture transport is extremely important for us to focus on.

Number two and number three are really key and together they form our competitive advantage. Number two is developing local talents and as a representative of world-class brands in construction machinery, power generation, agricultural products, it’s almost a duty of ours to not just throw the products there and hit and run. It’s about developing the presence because people locally are the ones building the relationship locally with the customers. They’re the ones who bring value to the customers.

Lastly, investing our local capabilities – putting investment in producing, constructing and maintaining world-class facilities for workshops where people can bring in their machines for repair. And not only that but a rental fleet. Not everybody has the capability, the ability to purchase heavy equipment worth hundreds of thousands, if not millions. Rental services are very important.

In summary, it’s all about our customer growth. Our customer growth is what is going to enable our growth locally and for the group. We believe there is opportunity to position ourselves before mass adoption of these services. Really the initial phase of our Digital Transformation is about the employee experience and now the next phase is going to be about reinforcing the customer experience by staying core to our value proposition, which is delivering high standards and premium services to our customers, while focusing on the growth.