The next few years will be tough for SA economically, but less so than in other, more developed countries, according to experts who will speak at the IT Confidence Conference next month.
“That there will be an impact is unavoidable,” says SAP's Simon Carpenter, a panellist at the conference. “We are inextricably a part of the global economy and our major trading partners are hurting. But it definitely won't be as deep or panic-fuelled as we have seen overseas, because the South African economy has been relatively sheltered from the crisis in the financial services industry.”
“Local businesses that have been affected most are those that are exporting raw materials or components to the manufacturing centres of the world,” notes Microsoft's Mteto Nyati, one of the IT Confidence Conference key speakers. “This is due to the softening of consumer demand in the US and Europe. At the same time, SA's high interest rates, coupled with reduced consumer disposable income, have negatively impacted our retail and property industries,” he adds.
Repercussions for the local ICT industry are a bit of a mixed bag. While on the one hand, IT budgets have been almost universally slashed, Allan Cawood, CEO of Dimension Data SA, says: “Businesses are looking for ICT to drive costs down and to use IT to innovate their business model. This will assist with the growth in the ICT industry.”
Carpenter adds: “There is no modern business or government that can run without IT. In the wake of the current crisis, we should be anticipating calls for greater regulation of business, more transparency and better compliance... this means there will be a need to modernise IT architectures in order to co-ordinate and automate end-to-end business processes.”
This presents a significant challenge for IT managers, says World Wide Worx's founder Arthur Goldstuck. It may take two to three years for IT budgets to recover, back to their pre-October 2008 levels.
SA is currently enjoying the protective economic effects brought about by hosting the 2010 Soccer World Cup, but Goldstuck warns that not all 2010 effects will be positive. “The enormous energy around the World Cup will ensure a momentum that holds off some of the effects of a global recession, but we will probably suffer an enormous 2010 hangover once the tourists and the TV cameras have gone home. If a global recovery occurs in the second half of 2010, we will probably lag by six to 12 months and could see the economy recover momentum in 2011 or 2012. Of course, no one can forecast the craziness of the market.”
All speakers agreed: businesses need to focus on predictable revenue streams and projects with guaranteed returns, and to remain as aware of changing market conditions as possible, and to adjust where necessary.
“Behave like a fox,” says Clem Sunter. “Check out the environment and adapt; those who adapt will be in a sufficiently strong state at the end of the bad times to take advantage of the recovery.”
Share