Deloitte SA Blog


Challenge to beat toll road threat

This is a transcript of an article written by David Jackson of Business Day, published on the 19th March 2011

Companies may have to review their entire distribution network strategy as they seek viable and cost efficient alternatives

Companies involved in the distribution of goods by road – including courier, logistics and large retailers in the supply chain – could well be faced with passing toll road fee costs on to their clients or incur squeezed margins if they don’t.

Many may have to review their entire distribution network strategy as they seek viable and cost-efficient alternatives to the toll road system.

Clinton Houston, Deloitte Consulting Supply Chain Practice Leader, says not all organisations are necessarily prepared to absorb the costs of toll fees.

While some will try to use byways and back routes to avoid using the tolls, this is unlikely to be the major response, he says. A possible alternative is the M1 (the Ben Schoeman highway), which if used in combination with  the N12, for example, could enable heavy commercial vehicles to take advantage of a shortcut en route from the west of Johannesburg to Midrand, which would result in a saving of 69% on toll fees – at the original mooted rate – by avoiding several of the N1 E-tag plazas. E-tags are the discs attached to windscreens that are activated when vehicles drive through plaza booms, triggering the electronic payment process. There are other options available to companies from a supply chain perspective, according to Houston. Of late companies have been creating distribution hubs – in effect regional distribution centres – in Gauteng.

Large retailers are setting up mega distribution centres in the same areas, getting closer to their customers and achieving economies of scale.

“Many of these retail distribution centres are being fed from coastal cities such as Durban and Cape Town, so even though they are achieving economies of scale in this manner they are having to pay toll fees when they enter the network and again when leaving the network to reach their customers – so effectively being impacted twice.

Rather than expanding the mega distribution centres to meet growing demand in the future, especially with goods coming up from the coast, these companies might consider setting up regional distribution centres in the rural areas, thus avoiding toll fees entirely.”

He says that companies that do not already have a mega hub within the E-tagging network might consider going to less fashionable areas such as Devland, for example.

‘Rent is cheaper and if they are transporting goods from the coast they will not have to pay the double handling fee by entering the E-tag area to get to their distribution centre and then paying again when delivering to their customers”

From a Gauteng tolling perspective they would not pay at all to get to the Devland area but pay the single tolling cost of serving their customer.

“This is another alternative we expect to see happening more and more, to include areas such as Lanseria and potentially even as far as Heidelberg”

Houston says that in the past many manufacturing and retailing companies have been reluctant to become involved in distribution, not regarding it as their core business and effectively outsourcing this function. However, companies that both manufacture and distribute have already started to seek synergies with companies that are not necessarily competitors in their industry, with a view to sharing the delivery of loads on long distance hauls.

“That thinking could be expanded to the e-tolling network,” says Houston.

“The bottom line is that many distribution companies, or companies that have distribution arms, need to look at their distribution network strategy. There are variables to consider – and there are now compelling reasons to revisit the situation totally.”

Houston believes that the South African National Roads Agency (Sanral) is not discounting the option available for companies to transport their goods at night sufficiently.

At present there is a mooted 25% discount for using the system at night, which Houston suggests is insufficient, taking into account the costs incurred in keeping the dispatch and receiving facilities at distribution centres open at night.

“If businesses were given sufficient incentive to use the trucks at night it would help to relieve congestion on the roads between 6am and 10am.”

Abrie de Swardt, marketing director of Imperial Logistics, says: “Toll fees are a statutory charge. Therefore, logistics service providers, depending on specific contractual terms agreed with a customer, will be in a position to recover this cost. The reality is, however, that related price increases will be passed on to the customer, which theoretically would mean no impact on profitability.”

However, there could likely be a portion of this that is not recoverable, he says.

“In a sense the new levy could force businesses to optimise supply chain performance further and manage the total cost of logistics even tighter. There are numerous tried and tested ways in which to do this, such as through ‘extra distance’ analysis, network optimisation and night time operations.”

De Swardt says that Imperial Logistic’s subsidiary, e-Logics, is assisting in developing a toll management solution to enable the company to manage toll costs effectively and efficiently.

“As Imperial Logistics has been intimately involved in this process with Sanral, our vehicles will be used as a pilot project in implementing the toll system.”

He says the management solution that Imperial Logistics will implement “will increase our level of confidence in toll transactions through validation tools and fraud and abuse detection. This will allow us to control and allocate toll costs accurately and to inform transportation planning.”


Clinton Houston leads the supply chain strategy practice at Deloitte Consulting,  South Africa. With over fourteen years experience Clinton has played a leading role in areas such as designing “plan to deliver” business processes, including sales and operations planning, production and distribution planning and scheduling, designing and implementing advanced planning and scheduling solutions. Clinton recently lead the Deloitte consultants in a Supply Chain Planning project at a major beverage company in South Africa. A significant focus area of this project related to source of supply, network design, transportation mode and route optimisation, and warehouse and inventory optimisation and integration into SAP. Clinton has also recently lead an engagement at a major local dairy company. The focus of the engagement was to evaluate their current outbound distribution network and propose a new distribution network model that minimises cost without compromising service levels, whilst taking into account the changing requirements of the major retailers. Clinton may be contacted at

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South Africa’s Security Awareness Lags

This article was published on ITWeb by Alex Kayle, Senior portals journalist. Click here to access the original article.

South Africa is behind the information security awareness curve from both an African and international perspective.

This is according to Craig Rosewarne, Information Security Group (ISG) Africa founder, who spoke at the second Deloitte School of Risk Management and the ISG Africa event held on Friday, 25th March 2011 . Rosewarne will also present at the upcoming ITWeb Security Summit being held at the Sandton Convention Centre from 10th  to 12th  May 2011. ISG Africa’s main objective is to drive awareness and education around information security risk and governance.

According to Rosewarne, no central information security body exists in SA to educate the layman around Internet security. “We don’t yet have a co-ordinated response centre for the whole country to use,” said Rosewarne, adding that it’s imperative to form public and private partnerships in order to effectively deal with cyber security attacks. He said ISG Africa is aggressively striking up partnerships with various organisations such as Business Against Crime and Sabric, which deals with financial fraud in banks. “We are also in discussions with the Chamber of Commerce and other government entities.”

He pointed out that the company is looking to create a virtual cyber security centre, which is a step towards the group’s plans to drive an operational Computer Security Incident Response Team (CSIRT).

“However, we still need to partner with different players that can provide us with the infrastructure and teams of experts,” noted Rosewarne.

ISG Africa last year called SA’s first cyber security policy “unclear”, saying it failed to mention how the Department of Communications would roll out and manage national and sector-based CSIRTs.

“As per the cyber security policy drafted by the Department of Communications last year, this industry body still needs to be built. We need to first look at building various industry CSIRTs. We also need to reign in government and parastatals such as Eskom and Cipro.”

According to Dr Barend Taute, who also spoke at the event, security policy experts need to meet with government and Interpol to discuss how to address South African security challenges.

“Africa has unique challenges, which are different to the rest of the world. Broadband Internet is being rolled out to people with low literacy rates that have no Internet security awareness and are, therefore vulnerable to security threats.

“SA is privileged not to have seen big cyber attacks during last year’s Soccer World Cup. The biggest question should be asking whether we would have been ready for a big cyber attack.”

ITWeb Security Summit

The ITWeb Security Summit is South Africa’s premier ICT security event. It includes a conference, expo and workshops to inform business managers, CIOs and chief IT security officers about the current and future information security threat landscape. The spotlight is on security in an increasingly connected world, featuring cloud security, web services and online security, as well as the growing trend to use malicious code for industrial espionage and sabotage. Hear first-hand from global powerhouses like SalesForce, Google and Zynga Game Network about security strategies that deliver results, with practical insights from leading financial institutions such as Nedbank, Standard Bank, Barclays, Absa, and the Co-operative Bank of Kenya. Two days of expert insights and case studies, and hands-on workshops covering cloud security, web application hacking and security metrics. For further information visit

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New species of frog named after Deloitte

A new species of frog has been named after Deloitte, in recognition of the firm’s work in helping to preserve the Rubeho Forest in Tanzania, an ecologically distinct part of the country known as the ‘Galapagos of Africa’. Nectophrynoides deloittei was discovered in the Rubeho Forest in 2005 was named by the African Rainforest Conservancy (ARC), an agency set up to conserve and restore Africa’s rainforests.

Deloitte is a founder of the United Bank of Carbon, a UK registered charity that brokers partnerships between individual businesses and specific rainforest conservation projects run by established NGOs. Through this partnership, Deloitte identified a rainforest conservation project with ARC to provide an opportunity for its people to support an environmental cause through fundraising and volunteering.

The firm raised over £200,000 to support the project in the past year with all funds going towards the on-going conservation of the entire mountain and forest range in the Rubeho region and helping to ensure the local community can earn a sustainable living from the forest.

Heather Hancock, Managing Partner for Innovation and Brand at Deloitte, said: “This project was a pioneering move by Deloitte. We wanted to demonstrate our commitment to the rainforest, to biodiversity and to the development needs of local people. And we wanted to learn more about how we could make a difference in remote and important parts of the world.

“At Deloitte, we believe it is our responsibility to show leadership in tackling the environmental challenges that face us all. It is a rare honour that ARC have chosen to name a newly     discovered species from the Ruhebo region for our firm, and one we will cherish”

Carter Coleman, President of the African Rainforest Conservancy said: “Twenty years of ‘on-the-ground’ projects led by ARC have yielded 10 million trees planted and many new economic and educational opportunities in Tanzania’s Eastern Arc region.

“By empowering those living amidst the forest—endowing them with project ownership—we have helped the local people remain invested in preserving their natural heritage for decades to come. The Deloitte Rainforest Conservation Project is a great example of this and we are delighted to honour Deloitte UK this year with the name of a new species”. 

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Managing from a distance – How to manage virtual teams

This blog post follows the Deloitte e-tolling article (written by Candice Silverstone and published on the 18th March 2011) which discussed the effect e-tolling will have on employees. I have provided an excerpt from the article below:

“Given the impact that this proposed system will have on organisations and their employees, it is crucial that companies consider the implications on their Reward and Travel policies and practices, as well as changes to traditional modes of working. In order to cut travel time and associated costs, the creation of home offices, particularly by professionals and knowledge workers, is likely to become more attractive with the implementation of e-tolling. The trend of remote/off-site/virtual teams is therefore likely to increase, particularly with advances of technology.

Such working arrangements may present socio-psychological challenges however, such as a decline in team spirit due to little personal contact and supervision, feelings of social isolation as a result of increased use and dependence on technology, and poor employee well-being and frustration due to possible role uncertainty”.

Managing from a Distance – How to manage virtual, remote and/or dispersed teams

by Candice Silverstone of Deloitte Consulting

As many organisations are aware, non-traditional teams are growing locally and internationally as enterprises convert to global organisational structures and invest in more complex technology. The introduction of toll roads is also likely to decrease face to face time in the hope of reducing travel costs. It is time to stop thinking of dispersed teams as special cases and start developing management strategies for dealing with the new challenges that they create so as not to risk team dysfunction and sub-optimal performance.

Critical Success Factors for High Performing Dispersed Teams

Extensive research, coupled with our own client experience, demonstrates the following characteristics:

  • Strong team member relations, characterised by camaraderie, trust and respect, considering the effect or impression of communicating with team members at a distance;
  • The existence of specific, measurable, achievable goals, objectives, project specifications and performance metrics.
  • Positive team processes – such processes include management by objectives strategies, distance job review techniques and distance corrective action;
  • Effective staffing strategies for both remote leaders and employees – people who are working remotely must be proactive communicators and must be especially good at working independently and meeting predefined deadlines. Effective leaders of dispersed teams also demonstrate an aptitude in managing diversity and exhibit high levels of emotional intelligence;
  • Sponsorship and support from top leadership; and
  • Staying connected, by capitalising on appropriate technology which suit particular types of situations and messages.

Implications on Leadership

Technology cannot substitute skilled leadership in the digital age. Without effective leadership, individual and teams in virtual and network environments cannot begin to realise the potential inherent in non-traditional and decentralised environments. Leading a remote or virtual team requires a strategic approach, good communication skills and inspirational leadership. Skilled digital leaders understand how to build trust in the remote working environment; empower others when working remotely; create a sense of community in a remote environment; and select the most appropriate and effective technology for remote communication and collaboration.

The bottom line is that Remote / Virtual team leaders need to recognise that there is an inherent risk associated with managing from a distance. Ironically, it is the human component that is required from leaders more than ever to succeed. This will differentiate leaders from managers in the digital environment.

If you would like to have a more detailed discussion, contact Candice Silverstone at You may also click here to visit the Deloitte Consulting Human Capital website.

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Cloud is not a silver bullet

Evolution or revolution? Or maybe both? In an interview with SAP Spectrum, Mark White, CTO Deloitte Consulting, and his deputy William Briggs discuss why cloud computing is the next giant step in IT – and how it will revolutionize business models.

Experts say that the cloud represents a new chapter in how enterprises can better use IT. Why do they believe that?

— Mark White —

There are three broad answers to the question what companies want to achieve by using the cloud. Number one: they want economic advantage. In fact, you might say they have a preference for operating expense over capital expense or they have a preference against a large upfront payment. So cloud, particularly public cloud, offers the opportunity for preferring operating over capital expense and for having a monthly subscription over a large upfront capital cost.

The second answer is speed to solution or scale of solution. The head of HR might say I need the resumé screening site up next week, not three months from now. Doing that with the internal IT team can take weeks or months. But in the cloud, it only takes hours or maybe days to go from identifying the need to identifying a service provider. As for scale of solution, there are actually two parts. In one I can pilot, test, or try out my new HR resumé sourcing system in a limited fashion with the external cloud provider. If it goes well, I can scale it up to the full scale and scope of my business demand. The second part is the global perspective. For example, it could be that I have quite a sophisticated IT capability in Germany but need a working group to do business in the Czech Republic, where my company’s IT capability just doesn’t manifest well. So what you are finding in some companies is that they’re going to a cloud to provide services for the remote, less developed, or emerging markets of their organization.

The third answer is efficiency of resource. Let’s use an SME example. SMEs are the most aggressive and complete adopters of public cloud services today because in the cloud they have access to solutions at a level of sophistication or capability that they can’t afford to implement internally.

Read more . . . . Cloud is not a silver bullet

Have any questions? Visit the Deloitte South Africa cloud computing website and speak to our specialists

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Cyber Crime – A Clear and Present Danger

This paper presents the key finding of Deloitte’s review of the results of the 2010 Cyber Security Watch Survey, sponsored by Deloitte. The paper reports several key results of this survey and Deloitte’s interpretation of key survey results. By its nature, interpretation goes beyond simple reporting of results (which is not our goal here) and may prompt disagreement or even controversy.

Deloitte believes however, that some of the findings point to significant incongruities between the views of many survey respondents and the current reality of cyber crime. Given that the survey respondents include mainly executives and professionals responsible for the security of their organisations’ IT environments, such incongruities are worth examining.

Download the full report . . . . Cyber Crime – A Clear and Present Danger

Contact one of our specialists at Deloitte Risk Advisory for a more detailed discussion:

Kris Budnik  

Tommy Prins  

Dave Kennedy

Marius Alberts

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Deloitte survey – 63% of companies still to investigate the impact e-tolling will have on their employees

Based on the results of a recent national Deloitte survey conducted amongst South African companies, Candice Silverstone of our Human Capital service area presented her observations below, which organisations need to take very seriously. E-tolling is going to have a significant  impact on many people. Companies need to take heed of this and devise practical ways to overcome these challenges.   

Tolls to Impact More Than Your Bottom-Line

by Candice Silverstone – Human Capital, Deloitte Consulting

Based on charges released by SANRAL, the tolls will have a significant impact on monthly travel costs for people who commute between Pretoria and Johannesburg. Approximately 160 000 vehicles travel on this stretch of highway daily.

Deloitte’s recent National Remuneration Guide, released September 2010, revealed that only 22% of organisations have considered the impact the toll roads will have on employees’ travel expenses. In addition, 63% of companies surveyed still need to investigate the impact tolling will have on their employees and whether they will compensate employees for this cost. 37% of organisations stated that they will not reimburse employees for the extra cost involved.

Given the impact that this proposed system will have on organisations and their employees, it is crucial that companies consider the implications on their Reward and Travel policies and practices, as well as changes to traditional modes of working. In order to cut travel time and associated costs, the creation of home offices, particularly by professionals and knowledge workers, is likely to become more attractive with the implementation of e-tolling. The trend of remote/off-site/virtual teams is therefore likely to increase, particularly with advances of technology.

Such working arrangements may present socio-psychological challenges however, such as a decline in team spirit due to little personal contact and supervision, feelings of social isolation as a result of increased use and dependence on technology, and poor employee well-being and frustration due to possible role uncertainty.

The real challenge lies in genuinely engaging those who have little or no face-to-face contact while working together. Of particular importance in predicting success is the ability of managers to understand, attract, motivate and retain offsite workers.

Effective managers of remote workers are likely to demonstrate skills at the following:

  • Selecting individuals most suited to working remotely;
  • Building trust in the remote working environment;
  • Empowering others when working remotely;
  • Creating a sense of community in a remote environment;
  • Building constructive working relationships, at a distance;
  • Building an awareness of the socio-psychological aspects of technology-mediated communication; and
  • Providing guidelines on effective e-communication – choosing the most appropriate and effective technology for remote communication and collaboration

Virtual teams are fast becoming more the rule than the exception in certain types of organisations. It is time to stop thinking of them as special cases and start developing strategies for dealing with the new challenges and opportunities that they create.

This report was produced by Candice Silverstone, a Manager in Human Capital, Deloitte Consulting. She has both generalist and organisational development experience, with extensive involvement in Human Capital and Talent Strategy formation, Employee Value Propositions, Executive Assessment, Leadership Development and Human Capital Benchmarking. Some of her recent client engagements include the design and implementation of attitude and perception studies, competency framework design and Talent Management Effectiveness Reviews. Candice has a particular interest in best practice with regard to attracting and retaining Generation Y Knowledge workers, as well as non-traditional teams that work virtually and remotely.

You may contact Candice at for a more detailed discussion around the impact of  e-tolling and practical advice on how to deal with these challenges.

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Africa’s Growth Prospects

There is a general acknowledgment that the African continent is poised for growth in the 21st century. Some commentators have even gone as far as calling the 21st century the African century. The debate is no longer about whether there will be significant growth from the continent or not, but rather about the scale of the growth. According to the Economist Intelligence Unit, from 2012-2015 the sub-Saharan regional economy is forecast average growth of nearly 5% per annum. The World Bank is also forecasting similar growth percentages (5.5% for 2012) for sub-Saharan Africa, making it amongst the fastest growing regions in the world.

The M&A market is normally a good indicator of the economic growth expectations. Investors will normally invest in industries that they perceive to have the greatest growth prospects. The value of M&A transactions surged to a record high of $44 bn in 2010, which was more than double the value of $17.5 bn in 2009 (source: Investors Monthly). South Africa was the most targeted sub-Saharan country with 54% of M&A activity in 2010.

As a natural resources rich continent, it is therefore not surprising that the majority of M&A transactions in the last 12 months have been in the resources sector. Per the Thomson Reuters Sub-Saharan Africa IB Analysis report, the value of natural resources transactions during 2010 in sub-Saharan Africa rose from $4.7bn in 2009 to $11.3bn. There is is still a lot of appetite for African natural resources, particularly from companies in the East. China and India accounted for 36% of the value of all transactions.

What has been even more interesting regarding M&A growth in Africa has been the diversification into the other industries.  Telecommunications, financial services and consumer business are just some of the sectors that have experienced a surge in M&A activity. There is growing interest in the 1 billion strong African consumer. The Bharti Airtel takeover of the Zain operations in Africa has had a significant impact on the telecommunications market in which they operate.  Bharti Airtel has completely disrupted the market by slashing the prices by over 80% in some cases (source: BMI Industry Overview, August 2010).  While this is disruptive to the industry, it is of course a huge advancement in the ordinary lives of most African citizens.

Certain African countries, particularly those in East Africa, have seen basic infrastructure growth outpaced by the growth in technological advances. The introduction of M-PESA, the mobile phone based money transfer service in Kenya is an example of this rapid expansion. It is acknowledged that there is still a lot that needs to be done in terms of basic infrastructure, but their technology biased infrastructure presents a lot of opportunities for both the investors and the citizens.

So what are the big prospects for the next few years?

  • The panic over the shortage of natural resources and the need to secure supply that we have seen drive up demand and prices in natural resources has eased.  The likely activity in the resources industry will be the key driver of significant new oil discoveries in countries such as Ghana, Uganda and Sierra Leone. Therefore, these are likely to be more country specific.
  • The big talk at the moment is of food scarcity. Africa with its vast arable land has to be in a great position to respond to this, so the prospects for Agri business should be good.
  • Financial services’ penetration is still quite low, so that still has some prospects. The consolidation and recapitalization of the Nigerian banks could create potential M&A interest in that banking sector.
  • As the middle class continues to grow in these countries, there will also be greater demand for private education.

In terms of M&A, the story that will be dominating in the next few years is likely to drive the diversification of the African economies and therefore likely to see more transactions that are looking to take advantage of the 1 billion consumer market.

Author: Ticha Pfupajena

Co-Author: Lwazi Bam

The annual ISG Africa & Deloitte School of Risk Management Event

You and your valued clients are invited to attend the risk event of the year! Due to limited numbers, your RSVP is essential.Deloitte is sponsoring the venue for the Gauteng Information Security Group of Africa  chapter meeting, a Section 21 company established in 2005.  An interactive panel discussion with several local and international experts will be chaired by Craig Rosewarne from Risk Advisory.  A number of members from both public and private sector organisations as well as delegates from the press will be in attendance.The event takes place on the 25th March (starting 8:30 and ending at 4:00 pm) at Deloitte, Building 33, The Woodlands Office Park, Woodlands Drive, Woodmead, Johannesburg, Gauteng, South Africa.   

Discussion topics will include:

  • The importance of skills development in Africa
  • Test of Courage – What is your risk appetite?
  • Innovative learning into the 21st Century
  • Enterprise Risk Management – the Risk Intelligent approach
  • Business perceptions of their Governance, Risk Management and Compliance functions  – Suggested action points
  • Aligning business to IT – Valuable feedback from the 2011 IT-Business Balance EMEA survey
  • The role of Analytics in Risk Management
  • Aligning Integrated reporting with the Business Strategy
  • The RA Foundation challenge
  •  Cyber Security & Information Security challenges facing Africa.


Join an interactive panel discussion comprised of local and international experts to find out what lessons Africa can learn from international initiatives and challenges faced in other countries across the world. For more information, or to RSVP please contact Dawn Cracknell on 

Unleash the collective power of your organisation

As One is a pioneering approach to leadership that can give leaders greater control over the success of rolling out business strategies and conducting large scale transformation. It comprises an analytics-based methodology, a management discipline, and a suite of business resources designed to empower leaders to more effectively galvanize their people to work together to achieve organizational goals.

Whether you are a leader deploying a new strategy, trying to get greater engagement to an existing strategy, dealing with organizational crisis or searching for ways to enhance organizational performance, As One is the answer.

The As One service offering, which is provided by Deloitte member firms, can help member firm clients unleash productivity, realize the full potential of their people, and inspire commitment to shared purpose. A collaborative journey—from goals to As One insight to As One interventions—focuses leaders on addressing that last harbor of risk: “Are my people willing and able to perform the core tasks required to achieve our organization’s goals?”

As One leverages the Deloitte member firm network’s significant investments, thought leadership, experiences and insights into collective leadership to benefit their clients.

Learn more : Collective Leadership – Individuals acting As One 

As One member firm contact

South Africa  – Gert de Beer – View Gert’s LinkedIn profile
tel: +2711 806 5995

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