Managing Director of Chams Plc, Mr. Olufemi Williams, in this interview, talks about the journey of the information technology firm in the last 30 years, the state of the Nigerian economy, and his plans for the company as he takes over as the new helmsman. Excerpts:
Nigeria recently had a changeover in government and the new administration has yet to unveil its economic agenda. How has the situation affected business activities and what is your assessment of the Nigerian economy today?
It is a mixture of prospects and uncertainties. Over the years, the GDP was on the rise but petroleum prices have been on the decline for some time now and the GDP growth slowed down tremendously. At the micro level, we have not done a lot business this year. The country focused on preparations for elections in the early part of the year and the new government that was inaugurated after elections is just settling down. It is still trying to find its feet. So, companies that operate in the public sector arena must be suffering now. The Nigerian economy witnessed very few activities in Q1 and Q2 but for us in Chams, we thank God that the future is beginning to look very good.
How would you assess the information technology sector where you operate?
The sector is an extremely dynamic one. The sector is one of the few that are least affected by the slow pace of government because of its global nature. In the IT sector, every product is global and there is no way anyone can stop products from going across boundaries. Facebook does not have an office in Nigeria but it has millions of users and clients and the company is making cool money from here. Uber just got here and I am not sure if they registered an office in Nigeria. Operators in the IT sector must be prepared to operate in a global environment. The industry is unique because we do not work with the conditions of the local economy. It is true that the purchasing capacities of Nigerians could go down but IT operators understand that they must have a global vision.
Do we take it that Chams has a global vision?
Yes, that is our vision and the board has approved this as well. We have operated long enough in this economy and fortunately for us, we were able to dominate every segment of the IT sector that we ventured into. We used to be the leader in maintenance of personal computers before we moved on to networking which we dominated and later, we moved into card technology. We have now chosen identity management as our core area of business. I want you to know that identity management was virtually non-existent before our entry. It existed only in government offices in a rudimentary manner but it was the intervention of Chams that turned it into an industry. Before then, nobody paid attention to identity management. But now, state governments have been using identity management solutions to reduce their wage bills and we have launched some major private sector driven projects in this area that will help the industries involved to become more visible and possibly export to other parts of the world.
Why is identity management important, and how has it evolved in the last few years?
Identity management is the key to efficiency in any organisation. There is no way I can manage all the employees of Chams if I don’t know them. There is no way I can reasonably plan any strategy if I don’t know the people that are going to work with me in achieving the company’s objectives. In Nigeria today, most of our problems are difficult to resolve because we don’t know ourselves. Sir Demola Aladekomo (Founding MD of Chams Plc) loves to ask the rhetorical question of what will happen if a black man is caught at the border committing a crime and he claims to be a Nigerian. Nothing will happen because we look alike. Therefore, it is important to have cumulative information about people so that they can be responsible for their actions and transactions in a way that cannot be repudiated. We focused on identity management because saw it as a major challenge and also as a big opportunity for entrepreneurs to build successful business ventures.
How does the recent Chams restructuring and business consolidation address the evolving needs of clients? Does this have something to do with the recent closure of ChamsCity?
Over the years, the board of Chams Plc has paid close attention to succession planning. I was the Deputy Managing Director for a long time and I have been on the board of Chams Plc for some time too. Even my successor is being planned as we speak today because at the end of the day, this institution is bigger than all of us and will outlive us. The succession planning is based on the concept of built to last which was why the founding MD could retire from the board. We have heard and read stories of great institutions that collapsed immediately their founder moved on. It was the same concept of built to last that took us to the stock exchange. Chams is now a publicly quoted company with over 6,000 shareholders. Going public has subjected us to strict corporate governance principles and practices. We are regulated by the Nigerian Stock Exchange. We publish our audited accounts annually and in a timely fashion because if you don’t submit your account statements at a particular date, you get a penalty. The company has a life of its own and is completely detached from the founding MD.
ChamsCity was a peculiar case because it was an offshoot of a project. In 2008 when the structures were built, we got a concession from government to do the national ID card project. Former President (Olusegun) Obasanjo decided to implement the project using PPP (Public Private Partnership) and we submitted a bid. It was an international tender and we won as one of the two service providers. Then, we began work and invested billions of naira but it just didn’t work out. And in our characteristic style, we tried to make alternative use of the facility but we found that it was no more profitable. So, we took the difficult decision to shut down the business unit and take out products that are still profitable for relocation to other premises because but the need for 1,000 people to converge in a place is becoming less attractive to consumers.
I think the last user of the facility must have been JAMB (Joint Admissions and Matriculation Board). We wish JAMB well now that the infrastructure has been shut down. In other parts of the world, governments protect businesses. We got our fingers burnt but we have moved on as a business.
Chams Plc provides solutions in several areas including Membership Solution, Chams E-Educational Solution (CEEDS), Marriage Registry Solution and even Internally Generated Revenue. Can you give us an overview of these solutions? Where do you see the greatest growth?
Three years ago, at the end of our retreat, we agreed that we are going to balance our portfolio. We realised that the portfolio of Chams Group was tilted more towards the public sector. Now, it is 50-50 and by next year, we will tilt it more towards the private sector than the public sector.
Based on our core competence in identity management, we created a product called ConfirmMe because we know that there are a lot of non-functional database that are very difficult to access and use for operations all over the place. So what we have done is to build a complex gateway and a web based system that links all these databases together for the benefit of consumers. We linked our portal with the credit registry and some universities in the country. We also linked it with BVN as one of the first aggregator. So, if a prospective employee is invited for an interview and he claims to have graduated from Covenant University, for instance, I will not need to see his original certificate before I confirm that he actually graduated from there and the class of degree he graduated with.
if we want to extend credit to you, I can check your credit profile and I can even do it remotely because this is the IT world. Banks cannot give remote credit in Nigeria until you go to their premises physically and provide some means of identification but if it is possible for the bank that once you submit your application, they profile you even without submitting any information, check your BVN, check your credit information, check your other credentials, you will realise that it is possible for people to give better service even remotely without you coming to the bank to write a single application.
Recently, there was a report about somebody who hired a domestic maid through a website and the maid kidnapped the person’s child. If it was possible to have performed some background checks on the girl or access the information in a register like the BVN database, the ugly incident could have been prevented. Drivers are fond of claiming that they are jobless because their last employer travelled. They say things like, “I was driving an oyinbo man and he travelled.” There is no way you can verify such information because the oyinbo is out of the country but if every employer had listed out all the staff, it will build what we call responsible behaviour. Apart from responsible behaviour, it will also make transactions easier and more credible. If I had given you my BVN before you start to deal with me, if I come back in 20 years’ time I will still come with the same BVN number and you can aggregate my transactions with you to form your opinion. ConfirmMe is in the market already and we thank God for all the successes it has recorded. We also went into academic institutions to assist them in building consolidated databases and that is also going on.
The second product is the membership platform. I belong to a lot of professional bodies and I am contacted at the beginning of every year to pay association dues and contacted again when we have to go for conferences. But people join associations for networking, communication, mobilisation, support, advocacy, and all that. So we have built a portal to manage such needs so that interaction can be better, mobilisation and networking can be easier among members. We embedded facilities for private communication so members can chat and communicate with one another on a mobile app.
We also developed the Chams E-Educational Solution (CEEDS) for active students in educational institutions. You must have registered as a student, you must have paid your fees, and you must have registered for a course. So what we created was a huge, highly intelligent, and highly customisable portal that would do those three things and we offer it as a service to institutions. You can build your website but anytime you want to confirm or deal with me, Femi Williams, you know that on this portal there will only be one Femi Williams. If you want to know my status, you can check whether I have paid because payment must be made on that portal. You can check whether I have registered for courses because I will register on that portal, and finally that I have registered as a student in the school. So those three attributes are what we try to manage and are the core of the identity management of any institution that we provide the service for.
We have also developed, tested, and demonstrated the Marriage Registry Solution. It is a simple solution to manage and automate all the processes involved with marriage consummation from intention to signing the dotted lines. So, the process of application, back-end processing, approval, scheduling and taking of date of appointment have been incorporated into the portal. Lately, there has been a lot of interest from religious institutions that conduct weddings. So, we recently added counselling because it is an important part of the process of marriage in such institutions.
We have one, two or three other things that we are going to roll out in January. I may not talk about them now but they represent a huge opportunity to provide services which were not available before to Nigerians to make life easier. We want to ensure what we call You-are You, meaning once I know you with a set of credentials, I don’t need to doubt you each time you present them in future. In other parts of the world, you know that it is not the bank that gives most of the credit. There is no reason why Shoprite would not do hire purchase and it is available in other parts of the world. You walk into Shoprite and you pick a furniture that you like, you don’t have the money in your pocket, you only provide your unique number to which they can check your record in the bank, know how credit worthy you are and they advance credit to you to the level of their risk capability and that is how the economy can spin off. Banks have been declaring billions of profit before and after tax, banks are not in the business of keeping money, they are in the business of lending but who will they give the money to? Is it a Femi Williams that can become a Femi William tomorrow? Now, with the BVN that will stop and banks can confidently advance credit to people. At my level, I doubt if any bank will give me N100, 000 and there are a lot of people with brilliant ideas, even people with assets yet their businesses are suffering. They cannot take their businesses to the next level because they don’t have good collateral to access credit. We strongly that innovation around identity management will boost businesses generally.
As an identity management focused business, how do you ensure that customers or clients’ data are secured and are not easily hacked?
I will answer the question from two perspectives. First is the security of the engine itself. We have employed the best security tools and equipment both physical and virtual to protect the engine. We also subscribe to third-party organisations to perform hacking services on our portal regularly just to keep us on our toes and to be ahead of possible hackers. If they succeed on any of our portals, they get a bonus, so they are motivated to keep on hacking while we try to keep our portal intact. That is one way of staying ahead.
The second one is that ConfirmMe is meant to be a multi-threaded bridge between various data sources. Many of the data sources don’t reside on our server; we pick them on demand from the server of the authority that is constitutionally empowered to hold it. For example, we are about concluding discussions with JAMB. Their information does not reside with us but when you request for the credentials of Femi Williams, it is then we go to JAMB to confirm or give you that information. So it is the body that is constitutionally required to handle or to manage a particular data that is actually confirming to you, not us. We provide a bridge between the consumer and the data source but I assure you that the portal is well secured. We have encouraged a lot of hackers to try breaking in and we pay professional organisations that provide such services on a regular basis.
Big organisations and successful online businesses suffer from cloning whereby somebody will just create a portal that looks like yours. Yes, we have an institution that is providing this service for us. Anytime a fake site comes up it will be shut down. We are aware of the risks that are involved and we are spending heavily in terms of the security.
Chams is a key player in the Biometric, Smart Card and Identity Management and is therefore in a unique position to understand some of the current challenges facing the IT industry. What would you say some of those challenges might be?
Generally, we face challenges of electricity, communication and data. Other sectors also suffer the same fate. I think the body language of the current administration seems to be helping because suddenly electricity is getting better. We thank the telcos for what they are doing. It is still a bit expensive but the cost is coming down gradually. But in terms of government policies, we suffered heavily in the IT industry. Most of our tax laws were made before 1970 but they still don’t understand that when a business makes N100 as revenue, the profit may be a mere one naira. It is unfortunate that tax officials still use best of judgement most of the time and not the position of the law. But the biggest challenge that is unique to our industry is the globalisation. While government was still looking at how to regulate taxi business in Lagos, Uber came in quietly and is becoming very popular. IT business should not be subjected to two straight-jacketed local laws because there are global players that will come in and operate whether government likes it or not. I don’t know what Lagos state can do about Facebook because they don’t have an office here. So we need to relax and allow IT companies to compete effectively with global players. We need protection from the government in this regard because regulation tends to constrict IT practice.
Now, if we operate in Ghana from here, where do we pay that tax? The position of the law on such things is not clear which is why tax officials use best of judgement and often times it is not favourable to the organisation. Law-making should think global now and find a way to protect local companies to prevent double taxation.
What key partnerships have you entered into within the public sector and private sector that have defined your growth trajectory?
We see our customers as partners in Chams. We don’t manufacture a lot of things apart from the software technology that we use and most of them are developed by Nigerians. In the case of hardware, we have a lot of partnerships and we are very loyal to many of them. We have been with DataCard for 16 years now. We have been partners with Dermalog, the company doing BVN, for over 10 years. We have been doing good business with NeuroTech for more than six years. Locally, we have some states that we have partnered with. We have been providing them with identity management solutions over the years. Some are specific projects while others are long-term relationships.
A lot of government sector enterprises know how to collect money from the private sector but they are at a loss on how to collect personal income tax from operators in the informal sector. Tax payment is a function of the profit you make in a previous business year in the formal sector but how do they compute the profit of someone who sells pepper in the market? So tax officials simply harass people and demand for money with no logic as to how it is done. The IGR solution developed by Chams is unique. It is based on identity management. When you pay N10,000 this year, the following year we are ready to accept N10,000 from you with an explanation. So over the time you realise that the IGR system gets more intelligent and it is not much difficult for people to pay or even to assess themselves. It is also not much difficult for government to prove that you paid in 2001, jumped in 2002, and you are coming to pay in 2003, what happened to you this year? So that is what makes our own offering and solution unique.
Majority of the taxes that our people pay are repetitive. Tenement rate is repetitive. Once you pay tenement on this, you are meant to get the invoice next year without somebody running after you. So we have created a platform that will deliver your invoice to you and alert you that your invoice has been done. With that kind of solution, you will realise that the cost of implementing the IGR has gone down. The volume of collection is going up and there is a lot more intelligence for government to know who can pay, who has paid, where should we put pressure, who should we encourage and the money they will get from such platform would be used to develop the state. Money from the centre is reducing for obvious reasons. So it is time for state governments to invest in a system that structure the unstructured markets.
What is the relationship between governance, regulation and compliance (GRC) as well as access control, and identity management?
That is a big topic but identity management is the platform. You mentioned governance, regulation, compliance and access control but I will call it people, people, people, people and if you don’t have a system to know and to manage the people, all these will fall. Take corruption for example. When we implemented a solution for the elimination of ghost workers for government, we were told that “most Nigerians are even light hearted ghosts.” What did they mean? They understood that the system will not bother to catch them. So, they did it freely and some of the people who do these things are highly religious but the day they know that they would likely be caught, most of them would not do it. So, we must understand that identity management is the fulcrum or pivot of all these because there cannot be meaningful governance without a system to manage and know people. There cannot be meaningful regulation without a good system for knowing and managing people. Access control is all around people. So you realise that it is actually the heart of all these processes or principles that you highlighted here and that is why we chose that as our core competence. The application of identity management is very wide because there is nothing that you do that has nothing to do with people. It is all about people, people, people and that is what I think linked all these concepts together.
As a company listed on the Nigerian Stock Exchange, what has the experience been like? And are you convinced that listing on the stock exchange can engender sustainability for private enterprise, or would you advise thriving private enterprise to steer clear of listing?
We believe this is one of the best things that has ever happened to Chams because it was by listing the company on the stock exchange that proper corporate governance principles were instituted in this organisation. Now, we have even modified the corporate governance code to the extent that the tenure of members of the board of directors is now fixed regardless of the amount invested in the company. Succession planning is now properly engrained in our DNA and in our practice.
We cannot joke with the auditing of our accounts. Shareholders, appointed at the Annual General Meeting (AGM), sit at least once in a quarter to look at our accounts, to look at the controls within the system and it can also lead to assess to capital because when you get listed, you attract money to the organisation and that can take you to the next level.
So I will encourage any organisation, any institution that wants to stay for a long period of time to get listed on the Nigerian Stock Exchange, it is the best thing that has ever happened to Chams and it is actually the beginning of the built-to-last concept because the company now belongs to Nigerians. Over 6,000 people own this company. We are just representing them and every year, we must also go for an AGM and present the account to shareholders.
What is the future outlook of Chams Plc, considering the fast changing dynamics of the global Information and Communications Technology terrain?
Innovation has been engrained in our DNA from our early years as an organisation and we try to innovate not just for today but for the future. We have so many innovations in our idea bank and we intend to unlock them in the next five or six years. We intend to surpass the level left behind by Mr. Aladekomo because we have our eyes on globalisation. So, we will spread to the rest of Africa and other continents with our solutions.
We also have our eyes on the London Stock Exchange and that will come very soon, among many other things. Our goal is to take the company higher and to do our best in every way with the team that has been put together over the years. I was surprised recently to learn that some people have been with this company for 26 years and they are still here waxing stronger in the system. So we are all here to give our best to take the company to the next level.
How does it feel to attain the milestone of 30 years in business considering the harsh economic environment in which you operate?
Well, we thank God Almighty. It would not have been possible to achieve anything without God. Next is the board which provided purposeful guidance, policies and governance framework with which we operate. We also must attribute a lot of it to Mr. Aladekomo who founded the company and nurtured it to this level because he was also selfless. He is someone that works 26 hours a day, if there is anything like that. We could not have achieved this alone. We work with people and we have lots of them and all the testimonies that we have been getting while preparing for this 30th anniversary are highly inspiring. Many of the companies that are into networking today are offshoots of Chams. They were founded by people who left Chams and are doing fantastic business. So we have touched the lives of many Nigerians. We have touched the SME sector and we are also imparting lives now because we know there are people in the stock exchange who depend solely on the dividend that we declare every year.
The environment in Nigeria is a bit harsh sometimes but we have weathered the storm over the years because we understand this market very well. We understand the industry and with God behind us, we will surely succeed.
You took over fully as CEO this month. This is, perhaps, the pinnacle of your career. How prepared are you for the task ahead? Does this make you feel accomplished?
Well, it is a call to service. It is like when you enlist in a school, matriculation is what I am doing; accomplishment will come at the end of my tenure when I graduate from this institution. Over the years, I think I have been prepared for this role. As I said, there have been periods when I handled most of the operations of the company. I have been on the board for a while. It is just a new perspective to doing the same things that we have been doing which is what I am going to bring to bear. We have restructured the management, we have brought in new blood, and we have also empowered our people. I am so confident in the ability of the set of workers I have with me to transform the organisation in a big way. I am sure that some announcements will be made in terms of key strategic positioning and appointments soon. I know the organisation and played a huge part in the conceptualisation of some of our products and services. So, I am prepared and will only need to pray to God to bless our efforts with success and grant us favour before men as we go around prospecting for business in them.
One thing I can assure you is that Chams is here to stay, we will grow bigger and we will glorify God. It is in our core value to serve humanity. So we will not make guns for example. We will rather do products that will make life better and easier for people or services that people will be very happy to pay for.
Who is the new man taking over at Chams? Kindly tell us about yourself
My name is Williams Olufemi Sunday. I attended St. Peter’s Anglican School in Abekouta and Ebenezer Secondary School, also in Abekouta. Then I proceeded to the University of Ife (now Obafemi Awolowo University) in 1984. I studied Electrical and Electronic Engineering. After that, I did my MBA at Tafawa Balewa University in Bauchi. I joined Chams as a corps member in 1990 and I have served in almost all areas in the organisation. I led our foray into the card business. I can also recollect that I did the draft of the presentation that led to the formation of Valucard for Mr. Aladekomo then. So, I understand the sector very well and I have served in various capacities from AGM to GM to DMD, I even went to the subsidiary called SuperCard then to put a new lease of life in that company and we did some novel projects in the subsidiary company.
Lately, I did some courses at Massachusetts Institute of Technology (MIT), USA. I am married to one wife and we have two children. I am a devoted Christian. I was one-time president of the Anglican Youth Fellowship. I also belong to some social organisations. I do a lot of jogging and walking and do about 12 kilometres on Saturdays and occasionally when I wake up early, I do like two or three kilometres every morning.