From Disaggregation to Partnership Creation and Growth

Upya App in the hands of an Agent in Kenya

Two years ago, Upya wrote its first blog on Medium, “Disaggregation is coming to off-grid energy in Africa”. Today is a good time look back and reflect on what has happened since and how disaggregation has increased and requires building partnerships within the industry.

Where we are today?

For the sake of clarity, the term disaggregation refers to the process by which a company moves from doing everything in-house to calling on specialists to provide solutions that support specific segments of their value chain: products and/or software for instance. Our view was that a growing number of players will externalize some of their work to those specialists to ensure that:

1. They get the best products
2. They get the best software to manage their operations
3. They can focus on their core: distribution and their customers.

That view has certainly been validated as we see a growing number of bigger players going in that direction and many up-and-coming players directly outsourcing their products and software solutions.

There is a caveat though.

The need for winning partnerships

In the case of software (and to some extent products), players do not simply look to buy from a provider, they look for a partner that will provide them with solutions that will accompany them as they continue to grow and innovate.

The SHS paygo industry for instance started through a “simple” distribution model: direct sales through agents. The latter required one type of CRM with its list of features. Models have evolved as more companies come into the space and more go-to-market strategies are being tested and deployed. We see companies pivot to franchise networks, rely on community leaders, deliver their products through Kiosks, collect carbon credits, deploy different commissions schemes to their agents (internal or external) and continuously pilot new ideas in existing markets or as they expand.

A great example is Clean Cookstoves which some players in the SHS space have added to their portfolio. However, adding cookstoves means that now their CRM needs to support:

1. Additional product types and pricing structures
2. Most probably Carbon credit schemes
3. Non serialized products as they also sell pellets, or ethanol bottles.
4. Added complexity in the commissions of their agents
5. New distribution avenues targeting the peri-urban markets and adding retailers into the mix.

Through mutual learning, everybody wins

Hence the need for a partnership between the distributor and the software provider. In this partnership, the role of the distributor is to raise the market need and share the market feedback. The software partner’s job is to adapt its solution through the addition of features and/or innovation while maintaining a great User Interface and User Experience.

As we reflect on the work that our Upya team has done for the past year, a considerable portion of the time has been in building winning partnerships and the reward has been huge for us. Not only do we see our clients grow, but we also accumulated a wealth of knowledge about the market and how we can continue to improve and innovate.