South Africa Promises to Buy More Local Software

Local software developers should have a greater chance of winning work from the government as the State Information Technology Agency (SITA) has promised to procure more services locally to boost the indigenous hi-tech industry.

The agency faces a dilemma in procuring IT goods and services for the state as it needs to choose the most appropriate technologies , yet has a duty to encourage the local players. "We want to use our influence to help develop an indigenous IT industry," said SITA CEO Llewellyn Jones last week. "Obviously we need to buy the best technologies in the world but we have to do it in a way that will develop an industry in SA."

Ideally SITA's support could help to grow an export-focused industry taking products developed here into the rest of the world, said Jones.

SITA should use its buying power to give small companies an opportunity to tender in partnership with large multinationals when it commissioned major software systems, he said . "We are going to be imposing those kind of conditions on our procurement and engagement models to ensure we help the small and medium sized industry in SA."

Those plans may take longer to implement than expected, however, as Jones unexpectedly quit last month, apparently due to political interference in the tender process, leaving SITA searching for a new head.

The government invests R16bn a year in hi-tech services, making it the heaviest spender in SA. But SITA's chequered history and previous incompetence means it handles only 30% of the government's IT spending, with most departments still preferring to organise their own projects.

Isaac Mophatlane, the executive of public sector business for Business Connexion, said there had been a vast improvement in procurement policies but they were still biased towards global technology suppliers such as Cisco, Microsoft and SAP. Many enterprising companies had developed local solutions but had more success overseas, he said.

"We have technologies developed here but the government doesn't take them seriously. The only way you are going to get the next Mark Shuttleworth is if the government has faith in the local industry." Business Connexion did well in selling home-grown software to the government, but nobody was keen to trust smaller non-listed companies, he said. The government should let local players run proof-of-concept pilot projects to prove their systems worked rather than simply overlook them, Mophatlane said.

Jonas Bogoshi, a former SITA employee who is now CEO Of GijimaAST, agreed that the traditional method of IT procurement was failing. Three studies have shown that worldwide, 20%-30% of all IT projects fail to achieve any benefits; less than a quarter deliver enough monetary benefits to cover the implementation cost; and three-quarters exceed the time schedule by 30%, and half came in over budget. "We need to be honest about the success rate, " Bogoshi said.

Business Day

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