Last year`s improvement in the retail industry, coupled with an expected up-tick in spending by government and financial services sectors bodes well for the Western Cape ICT industry, believes Business Connexion`s regional chief executive Philip Savides.
The bullish sentiment should come as good news to Business Connexion`s shareholders as the group undergoes a name and culture change from Comparex Africa to the name of its black economic empowerment (BEE) partner. The deal was cemented last year.
Savides says the retail sector had a good season last year due to the cut in interest rates and this has helped boost the profits of some of the big chains. This, he says, means they will spend more on upgrading their systems.
"Technology has not so much become a differentiator, but rather a business essential and ICT companies must now move into understanding what their customers do and how they can use the technology," he says.
Savides says many retail operations need to upgrade or install new systems and that there has been little new development of technology for that sector. The point-of-sale system recently installed by national appliance retailer Game was originally developed for grocery chain Pick 'n Pay 18 years ago.
He also says that as the general population of the country becomes more economically active, they will need to be serviced and competition for this business will increase, and the only way to keep margins high is to keep costs down.
"We have to cut out technologies that are more expensive to service. This means technology companies will have to either outsource or co-source and generally work with the customer and share overlapping skills so that the customer can focus on their core businesses," Savides says.
Savides also says that local government has lagged in its expenditure on developing systems that will facilitate delivery of services to people, but he expects that to change.
"There has been an increase in the skills base in local government and this should help to get some of the systems they require working," he says.
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