EOH`s prediction in April 2004 that the IT market will turn has been confirmed by independent research firm, Forrester. At a breakfast hosted by EOH, one of SA`s largest consulting, technology and outsourcing companies, Forrester presented its first-ever survey of more than 100 large South African businesses and government agencies.
The research, conducted in August 2004, included 103 technology decision-makers at South African organisations. John McCarthy, vice-president, Forrester Research, outlines the sample group: "Firms represented a mix of verticals, including: consumer products, financial services, industrial production, primary production and transportation. Of the 98 companies, 50% had more than $1 billion in annual revenues and 24% were from firms with $500 million to $1 billion in yearly sales."
Forrester reported that while SA spends less on IT than their European and North American counterparts as a percentage on corporate revenue, South African IT spending is on the rise.
"We are pleased to see independent confirmation of our experience that the IT market has turned. It is evident from the research that IT and business are getting closer together, supporting our business model based on a `design, build, operate` concept. This model enables us to embrace our clients with products and services of both a business and technology perspective, which according to Forrester, is what is required in the market today," says Keith Fairhurst, director, EOH KPMG Consulting.
In its research, Forrester reports that South African firms plan to upgrade and extend their hardware and network infrastructure. Personal computers, server hardware and networking equipment rate among the top three IT investments South African companies plan to make in the following year.
Top software purchases include application servers and enterprise application integration (EAI). On the services side, South African firms lead their North American and European counterparts in new development spending. Investments include software development, IT strategy/planning outsourcing consulting and IT outsource contracts.
Some 65% of companies surveyed have a centralised IT department in comparison with 15% who have decentralised IT operations and 20% who have a combination of the two.
Some 74% of respondents report a significant involvement from lines of business, outside of IT, in setting a company`s 2004/5 IT budget and deciding which IT initiatives to fund. "We find this very encouraging. It supports our belief and vision of technology and business being treated as one," says Fairhurst.
Forrester says a more disciplined approach has been adopted in SA. Project cycles have been cut to between six and eight months; return on investment (ROI) dominates planning, IT management is focused on improving performance and eliminating waste, while there is an increased investment in process to improve discipline.
"CIOs are more focused on measuring value than ever before," says McCarthy. In its report, Forrester outlines six key IT metrics: alignment with business strategy, supporting company innovation; stewardship of the IT budget; user/customer satisfaction, an operational stability index and future orientation.
"You can`t deliver sustained business value if the IT strategy and the business strategy are not aligned and tightly linked," continues McCarthy.
In a bid to continuously improve process methodologies, generate more predictable results and enjoy consistent quality, 64% of companies utilise home-grown process methodologies.
"According to Forrester, we are entering process-centric IT era. We share this belief and agree that process and domain expertise, married to technology, is what delivers business value," says Fairhurst.
For more information, contact EOH on (011) 607-8100.
Share
EOH is a business and technology solutions provider creating lifelong partnerships by developing business and IT strategies, supplying and implementing solutions and managing enterprise-wide business systems and processes for medium to large clients.
EOH operates in the following three clusters of business units as a fully integrated business:
Consulting - Concentrated under the EOH KPMG Consulting brand are business units offering services ranging from strategic and business process consulting, project services, change management, supply chain optimisation and education.
Technology - Through a number of subsidiary companies, EOH is able to sell, implement and support a range of world-class business applications including ERP, CRM, business intelligence, advanced planning and scheduling, e-commerce and manufacturing execution systems (MES).
Outsourcing - EOH offers comprehensive maintenance and support of client`s IT infrastructure and applications through the rendering of full IT outsourcing, application hosting and managed services. In addition, EOH offers full business process outsourcing (BPO) services.
EOH has a presence in all major centres in SA and Botswana, and operates in the rest of Africa.
Forrester
Founded in 1983, Forrester Research is an independent technology research company that provides pragmatic and forward-thinking advice about technology`s impact on business.
Editorial contacts