South Africa: ICT spending: 2010 set to top 2009
BMI-T says that “2009 was rocky but will 2010 be rolling” when it comes to government ICT spending Many South African citizens are on the edge of their seats waiting to see what will happen when the 2010 FIFA World Cup begins and when the influx of visitors stream into the country. From the very beginning the event has been deemed to significantly contribute to the social and economic opportunities not only in South Africa but for the whole African continent.
Consulting firm BMI-TechKnowledge published a report on government ICT spending trends which revealed current trends and opportunities in this key market space. The report probed into technology usage by National and Provincial Government departments and spending on external ICT vendors and on SITA in each department.
Key goals that Government set itself for the 2010 FIFA event were: to improve the countries public transport system, enhance telecommunication infrastructure and provide superior sporting facilities. The South African Government has stood firm during the economic recession and has already reached many of its 2010 ambitions which included to not only host a successful soccer event but to build and develop the country as a whole.
Lesley-Anne Dos Santos, BMI-T Enterprise Research Business Manager, states that due to the global recession, 2009 was a rough year for many companies operating in South African vertical industries and ICT investors were extremely wary during this volatile time.
Public sector companies lingered through the economic storm and the South African Government also had its fair share of challenges. However, there were positive signs during the downturn as seen in May 2009 when South Africa’s new Cabinet was announced and the number of ministries was increased to achieve Government’s goal of real and actual socio-economic development within the country.
Linked to this Government’s aim was and still is to develop an information society and to provide solutions that are citizen-centric, transparent and efficient. In 2009, many Government ICT projects were prioritised due to budgets being slashed and decreasing tax revenues which have also taken its toll on government’s propensity to spend; however Government remained dedicated to using technology to improve service delivery and to achieve its 2010 goals.
There are still major inhibitors of ICT adoption taking place within the public sector and these filter down to all three spheres of government. A major inhibitor is delayed decision-making regarding ICT budgets and, once decisions are made, budgets are usually extremely tight.
Technology adoption is slow within the public sector and there is always a problem with IT and telecommunications skills shortages. However, the other side of the coin, there are attempts at stimulating ICT, including enhancing skills, enhancing the effectiveness of operations, and managing ICT better (again through human resource development).
Because the public sector is large and is characterised by extensive ICT projects, this market is seen by most vendors as extremely attractive. According to BMI-T’s government research, the top three criteria or reasons for government departments choosing primary suppliers of ICT products and services are, in order of importance, BEE compliance, quality and reliability of vendors, and technical skills and the quality of service provided by vendors. Vendors providing end-to-end solutions and good customer service are also seen as important.