Day 1: African FOSS Business Models

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This section summarizes the outcomes of the workshop discussions (as recalled afterwards), and provides an opportunity for you to share your comments, edits, additions and further thoughts and ideas.

This is a temporary project wiki for ict@innovation, until the programme will have its own web-section connected to the FOSSFA portal.

FLOSSBusiness - provides detailed thoughts on the issue by one of the working groups and a venue for wide collaboration and knowledge sharing.. The topic of African FOSS Business Models was explored. What are good business models for FOSS in African countries? What are the experiences of participants? And which topics should therefore be among the contents of a business-related training, that would be helpful for ICT/FOSS-based SMEs to learn about?

Outcomes of Discussion:

Possible topics for business-related FOSS trainings:

Financial Support

 -Access to adequate financing for IT-SMEs (see module of InWEnt-PROCESS on this)
 -Learn how to complete a  business prospectus and cashflow for financing
 -Learn how to leverage IT skills with capital market


Market Intelligence(Research)

 -Learn how to conduct relevant local  market intelligence (research) for IT and FOSS in particular (market research first step to viable business model,
 -Determine size of market
 -Assess the exact needs of customers by sector

Sales and Marketing

 -How to create a distinct FOSS brand for Africa
 -Learn fundemental marketing skills
 -Create strategy to employ political pressure of IT-SMEs to have a positive FOSS procurement policies
  NOTE:  Article on procurement issues  see  [http://wikieducator.org/FLOSS_Business_Curriculum

]

Operations

 -Learn  basic financial accounting and management (not to be dependent on external help for
  financial management)
 -Human resource management, particularly how to upgrade your workforce in customer relations, soft     business skills  ie. communication skills, 
 -Develop strategies for internal training
 -Effective succession planning
 -Craft a viable business plan and brief business prospectus necessary for funding)

Resources: Balthas: see here the training material available by DEG bank and by infodev

Resources:

Cooperative vs Competition

  • Co-opetition: Working together will enable local FOSS companies be able to get bigger tenders = win against multinationals, make client feel that there is critical mass of support available.
  • Also big discussion around missing co-opetition: Sometimes companies turn down clients, if they themselves do not offer the services, instead of transferring the customer to „friendly“ fellow-company.

-Discussion on the issue why should FOSS businesses share experiences with your fellow FOSS-businesses who share the same challenges and problems), why the „co-opetition“ models is important for FOSS businesses (work with your competitor on mutually interesting issues, e.g. to build the market for FOSS by lobbying together, for that you need trust among the competitors, or: outsource all marketing together to be more effective e.g. several companies hire one lobbyist / FOSS-marketing person

Note: See best practice of a Cooperative business organization:

Open Source Consortium in the UK The OSC is a trade organisation representing IT companies providing products and services around Free and Open Source Software. We aim to help our members by helping them find business directly and by working to increase the overall size of the market for Open Source Software. This guide covers one aspect of the OSC's work : how OSC members can gain work through the OSC [1]

African FOSS business models:

  • It seems that for African FOSS-businesses, it will be particularly important to offer a „basket“ of FOSS related business models to be able to react to an erratic market for one model and to have at least one model with immediate revenue stream to build up the others. In this case, you have to have a „margin optimized business design“, meaning that you always check, which part of your business is most profitable, and where you do not really make money to focus on margin- optimized parts.
  • promising FOSS business models in African countries are:
  1. Training (high margin possible)
  2. Support (Dorcas: here upgrades are a good market)
  3. Software Integration/Customization Services
  4. Software Development (Wilfred: is underexploited, would be big market in Africa, is easier than customizing Western software sometimes. Dorcas: market has not yet understood this model.)

Other points:

  • „first to market“ was stressed as an important point for FOSS businesses.
  • Other need in African market, that could be targeted by FOSS solutions: „stationary“ is second biggest cost item in companies after personnell (example Thulani, who made all bank printers print paper on both sides)
  • It is normal practice for VAR software channels to provide a marketing toolkit which includes of sales slicks, presentations, promotional items, swag etc. This produces a professional impression in the marketplace

See Also

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