The mass transportation option in Nigeria and what it means...

The recent edict of the Lagos state government to invest in rails as a form of viable mass transportation must be regarded as a potential business boom that it represents for many sectors of the economy. The typical ratio of the size of Lagos compared to the population it supports means that the traffic situation will only compound as more people move to Lagos in search of the proverbial golden fleece.

With a population that falls between seven million people to fourteen million people - there is always a constant movement of cars and people from one end of the city to another. Due to the pressure in the city centre there is a perceived movement to the suburbs to manage the crowding and noise - however since most people still work in the city, they require to get into the heart of the city and this can take anywhere between thirty minutes to three hours depending on where your reside.

The rail project will provide the ability to transport people and goods across the length and breath within estimated times without the attendant traffic while conserving fuel and time.

The estimate is for a rail system that will ferry and estimated 1.5 million people across the city scape while generating significant revenue for the state government.

The potential benefit of such a project especially in the arena of toll collection or fare collection would be a business that would see constant revenue flowing in to any potential operator. A typical fare would be between 50 to 200 naira depending on where the passenger's destination. If tolls/fares where collected electronically - there would be savings on printing costs for tickets as well as income derived for the toll/revenue collector on a daily basis that would easily surpass 50,000 naira daily.

The use of prepaid transport cards that could be bought with a  fixed value that is reloadable or probably can be used and disposed. At each use - depending on the location - the deduction via a terminal would be made from the card automatically when the card is placed against a receptor plate.

The company that brings this technology and platform in-place would undoubtedly position itself for the lucrative toll collection market.

The Role of system integration as a business strategy

System Integration - the word already sounds tech related.
That isn't quite the point but it probably helped you appreciate the choice of this topic.

What is system integration?
If we opted to break down the definition on a word by word basis - System would probably refer to diverse parts working together to achieve a task(s), function(s), goal(s), objective(s) or aim(s) - which may equally be part of a larger system in itself.

We have biological systems, mechanical systems, electrical systems, electronic systems etc
This list is positively endless but at this juncture i believe you get the point I am trying to make. Each system is normally a sum of its parts working to deliver a solution via a set of components coupled together.

Integration refers to the "coupling"  - the glue that binds one system to another.
Think Computer controlled intruder alert systems, sprinkler systems etc

In business - this is the means by which income can be generated.
It would be so easy to take a computer and say: hey, look this computer has quad core processors, 16Gb of RAM, 1TB of hard disk space (has Hybrid technology bundled with the hard disk), 256 MB of dedicated memory for its Display adapter and integrated cooling system.

All that's good and fine but the question is: What good is all this if I am NOT using this as a part of a larger system to achieve Does it integrate into a home network and carry out computations used to optimize grain feed in large scale robot controlled farms?

Does it monitor the temperature in 320 hotel rooms of the Hotel Raj and activate the air ventilation system when temperature levels become too high?

Even after such systems have been created - how does one monetize this vast creation and leverage it to earn income in today's business centric economy - where great ideas compete against the scale of economy and a good business plan?

Technology is a business tool and it depends on the creation of a good business proposition to leverage technology and utilize its vast potentials. Technology is not often for the mere beauty of creation but for practical and monetary terms

Innovation is first finding a means to solve a problem (sometimes technology wise and other times through processes - which are equally part of systems) and thus providing a means to generate income.

I am a strong advocate in system integration - I have a fundamental belief that integration is the heart of technology and a major driver of business - without it we would be content to sell one tool for every problem on the face of the earth - that might not be bad for business but it won't be good for other business considerations such as the scale of economy and efficient use of resources and materials.

We will continue this discourse with practical examples.

The DISCOUNT marketing strategy

We all know business is tough these days.
Consumers are on the prowl like hunger jackals looking for the dead or "out of business" to make a quick feast out of. Not to mention that mantra that says: the customer is king.

This means that competition has gotten really fierce and they who manage to convince the customer to part with hard earned cash need to do a pretty darn good job during the sales pitch otherwise - no sale translates to no income or simply another potential: OUT OF BUSINESS sign in the making!

Enter the solution: DISCOUNTS!
Yes! I know you've heard the term and probably used this tool - a time or two.
But did you use it properly? That's the real question.

That's why I'm here to suggest a trick or two.
Discounts are very lovely devices that serve one purpose - to get the customer to set foot into your shop or business and more than likely make purchases. However - that is not our real objective (No sir!)

Our real objective is to impress it upon our customer to make more than one purchase while in our store by offering items that compliment the initial sale at a better bargain than the original item he/she solely intended to buy. This is the secret of a cross sell - a sell that does not interfere with the initial purchase but compliments it.
And what better way to do that than to offer a better bargain if two complimenting items are purchased as opposed to one! Better yet why not offer higher discounts when more purchases are made?

Thus as a seller or business person - it has become my new job to "assist" my customer to make better buying choices or decisions while in my store. I will also offer the best service that will assist this choice and will help the customer save his/her hard earned cash in this time of want. So far this is done in my store.

The discounts are designed to encourage volume purchases across all brands not just a particular brand.
I am also expected to get the customer details and to keep them informed of special offers - especially offers that will provide more gains when utilized.

In this age of the shrinking margin - the speed and volume of sale is considered far better that hefty profits that might take forever to arrive or that depend on one specific type of customer that comes in once in six months. Bad business is when a bulk of your stock is still hanging on the shelf two months after purchase with no sales in sight while your competitor across the street has sold his stock twice in this time span.

There are other variations to discounts that can equally assist sales and provide incentive for improved customer loyalty and brand awareness.

Recently group buying web platforms have come into the fray and have become the new Mecca of merchants and customers alike - sites like Groupon and its hundreds of variants all over the globe.

They basically harness the power of group buying and leverage a volume strategy directed at merchants that guarantee a definite purchase for the merchant while offering customers a discount incentive.

To this end various companies have joined the fray of creating derivatives of the same group buying software towards offering alternatives with addons and other business and service specific enhancements.

For instance - I have evaluated and recently purchased scripts from UniProgy Limited, which is a Groupon Clone development company. They offer Groupon Clone Software tools and Group Buying software for daily deal websites.
Their web site is located at: http://www.uniprogy.com (perhaps you can review the website and see if it meets your business and service requirements)

Their prices are fairly affordable when compared to the alternatives and they have a good customer service interaction as I have had reasonable responses when I had engaged them with some additional requirements.

However it would be pertinent to ensure that a consistent service track record and the ability to customize the scripts is equally available - if you have those additional requirements that the basic script does not immediately meet.

If you want to learn more please feel free to drop a comment - we can offer more than just advice!

Mobile money - a gold mine waiting to be tapped.

I work in the card payment industry and for a fact can acknowledge openly that card issuance has gone a long way. My company primarily processes VISA cards in Nigeria and currently enjoys a sole acquiring status on Point Of Sale terminals. These devices are fairly lucrative and depending on the total number deployed could earn substantial income - considering the fact that we had the sole POS acquiring license in Nigeria.

The downside to this business model was the return on investment required to justify a profit which was almost impossible considering the number of such terminals deployed and the other inherited costs such as communications and manpower required to deploy and maintain such terminals.

At best the numbers did not justify the spending especially as the merchant in question rarely bore the cost for either the deployment or the cost of purchase. The only beneficial thing with regards to such terminals was the potential to use them in such places like hotels (a main income stream for such terminals) and now government related spending - as part of the e-Government initiative to track spending patterns.

However the deployment and use of such terminals operate on the premise that card holders would be of sufficient numbers to justify costs and eventually provide a profit center for such devices.

The card issuance market is picking up steam and even with the limited number of cards readily available (an estimated ratio of about 1 card to Fifty people) - the spending patterns have drastically changed because of the availability and ease of use of cards.

If the ratio was to improve to the point where there was one card for every ten people - we see a electronic cash fueled economy operating on steroids.

The truth however is that we are at the brink of that point - the fact that mobile phone owners far outstrip card owners is an indication of trends. Communication and spending are key components of a population center.The premise of technology is a major driver and these two sectors: E-Payment and Telecommunications have various over lapping and interdependent areas.

There is talk of standardization but that will require several interfaces to facilitate between the disparate systems inspite of their high reliance of technology.
If the mobile phone became an additional tool fro making and receiving payments - then almost immediately one would see a high uptake in spending and therefore more goods and services. Just imagine the current 30 million plus mobile telephone density being able to make payments, receive funds, send funds from the comfort of their cellphones - that would literally jump start a new wave of commerce.

The issue is how to define parameters to ensure safety and completion of such transactions.
No matter what we are well on the way.

Mobile Money - the new payment method

I'm sure we've heard about it and read alot on it and I can say with a definiteness of conviction that it is here - the principle behind mobile payment is basically the mobile phone.
We now have above an estimated 1 million cards doing transactions on multiple channels and yet the physical challenges of issuing cards or producing cards is rather complicated. Compare this to the over 30 million subscriber base and the already established platform of mobile telephony. equally compare the integrated services that are currently leveraging this vast platform and the possibilities are endless.

To be continued...

Idea One: Amazon

I was looking at the Amazon site for some business inspiration:

Here are a few facts for your consideration:

They are into the web retail service sector.

They warehouse a wide variety of goods from diverse places and categories.

They do not currently cater to the Nigeria market due to fears of payment fraud and Nigeria's reputation with card  and web related payments.

Alot of Nigerian banks currently issue VISA cards which can be used for direct online payments but these cards are not accepted by many web merchants (Amazon for one) due to the potential for charge-backs or fraud.

My Idea is relatively simple:

Amazon currently has among its services:

The Bulk purchase of gift coupons.

These can be customized and sold with or without the Amazon brand.

A Minimum order is for 5000 dollars worth of coupons.

These bulk coupons can be obtained via the following ways:

• directly as access codes (via CD or download) or
• via web service that provides coupon directly (programming expertise required)

I believe that if Amazon is approached directly and a direct business relationship is established - we can obtain the bulk gift coupon and act as their sole representative in Nigeria  - we can then bypass their restriction of the payment via debit or credit cards from Nigeria as the payment would already have been made for the coupons by our proposed establishment.

Therefore:

Individuals or organizations can then use our services directly and thus facilitate their customers to shop directly on Amazon but this time making payment via the gift coupons, which will in turn be purchased directly from us or our proposed business establishment.
There is no risk to Amazon and we assume direct risk as the purchases of such coupons will be done directly through our site - or better yet, a gateway payment service can be built that will facilitate payment by debit card and then purchase the gift coupons  by the card holder which will then be used to complete a payment to amazon. 
We may then again chose to only sell to wholesalers or big organisations directly.

This model can of course be modified to cater to more business opportunities.

If we obtain the franchise for Nigeria - we can in essence corner a very lucrative market.

Banks intend to start customer loyalty programs (using debit or credit cards) to encourage card usage or bank patronage.

This gift coupon can be tiered and applied to each bank individually - we can thus handle fulfillment and other services that are direct tied in. It can also be sold as a service concept to banks and we can thus setup the required infrastructure. 

What do you think?

Can we talk about this -is there any potential pitfall that has NOT been explored?
Please indicate where necessary.