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STUDY ABROAD OPTIONS
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 SOUTH AFRICA FINDS E-COMMERCE IS NO EASY ROUTE TO PROFITS Companies investing in e-commerce trading systems should not expect to see much bang for their buck until 2004. Expectations of a faster payback are likely to be disappointed, even among the largest companies in SA, according to research company BMI TechKnowledge. "Only in 2004 will you start seeing returns on what companies have invested in hardware and software for their e-businesses," says analyst Brenda du Plessis. A survey of 200 companies that spend the most on technology in SA found most wanted to get involved in an e-trading initiative but underestimated the cost wildly, says Du Plessis. "The investments they are prepared to make are very low and show they have no understanding of what’s involved in setting up e-marketplaces.They are prepared to spend SAR10m to SAR30m, and if you look at the initiatives which have been put in place the investments are closer to SAR1bn to set something up." Even if three or four firms form a joint venture hub, their combined budgets could still fall short, she says. Other research shows that companies similarly have little idea of how long it will take to see a return on investment. About 30% expect to recoup their costs within a year, according to Douglas Boateng, MD of e-commerce software company Izodia. That is overoptimistic, he says, as it takes many months to get enough trading partners on board to reach the necessary economies of scale. At least SA’s top 200 technology spenders are right in their belief that investing in IT will have a profound effect on their business performance. The Meta Group, in a just-completed year-long study of the relationship between IT spending and business performance in the Fortune 500 companies, found that those investing the most in IT grew 13% faster in the period than more frugal counterparts. SA’s top 200 companies pumped SAR14,6bn into IT last year, accounting for 45% of SA’s overall IT spending. Their IT budgets will rise to SAR16,4bn in 2001. Since they are early adopters of technology, the trends they set are an indication of how smaller companies will invest in IT in the future. Du Plessis says suppliers are right to shift from providing software and hardware only to providing services too. By 2002, spending on services will overtake spending on hardware. Driving that is a trend for groups to hire IT infrastructure from a service provider, rather than make the capital investments themselves. Most in demand will be systems integration and infrastructure upgrading to improve a firm’s organisational infrastructure. Companies supplying enterprise resource planning software, customer relationship management and e-commerce software should be in for a good year, as large companies say those systems are their priorities. (source: Business Day via TAD Newsletter) DEMISE OF SEX WEB SITE Bianca’s Smut Shack is scheduled to close unless it can find additional funding. Maybe sex doesn’t always sell. (source: http://www.thestandard.com/article/0,1902,24395,00.html?nl=dnt ) IGNORING BIZ RULES LETHAL FOR LATAM NET COMPANIES Violating basic laws of economics and market dynamics has led to the death or near bankruptcy of many of the Internet companies launched in recent years to serve Latin America, speakers said at the LatinTech 2001 conference. (source: http://www.idg.net/go.cgi?id=473997 ) PD-CONNECT TO GIVE DEVELOPERS BETTER RETURNS ON THEIR INVESTMENTS Property developers will soon be in a position to market their projects with a guarantee that communications infrastructure will be in place before tenants move in, following the launch of a Telkom initiative in Centurion. Targeted at developers of industrial, business and commercial ventures, Telkom’s Property Development Connect, or simply PD-Connect, aims to roll out communications infrastructure in such developments before occupation by tenants. The process can be activated when developers log in to the PD-Connect web page on the Telkom website and register their development. Visit the Telkom website on www.Telkom.co.za and follow the PD-Connect links. (source:Telkom)
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This page last updated on January 28 2004.
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