IT in black and white

Black empowerment in the IT sector is significant and it appears to be growing. But sifting for clues as to its progress is like trying to find black and white in a sea of grey.

Most role-players have identified IT as a key area in aiding the process of development. The combined annual turnover of the 150 black IT companies is reported to be R1.5 billion, which suggests that this role is expanding. But what is the extent of the transformation and what obstacles are being faced?

One of the main criticisms of the IT industry and its handle on black empowerment can be traced to the implementation of government regulations, as well as policies implemented in companies.

However, critics say companies have lost sight of empowerment, on occasion being diverted towards enrichment and gain, rather than enablement and significant contribution.

"Black empowerment is a necessary intervention to level the playing field and for the sustainability of the economy," says Solomon Ngubane, MD of Everest Systems Solutions.

Ngubane believes SA has one of the best constitutions in the world, but points to the lack of resources to enforce constitutional rights. "This makes a mockery of the whole thing," he says. "The same could be said of black empowerment. The policy is right but there is no mechanism to make sure it happens, and no punitive measures applied."

Ngubane suggests that while training is not the whole answer, it is critical. Challenges include high IT entry-level requirements, but an even bigger phenomenon is the existence of the so-called lost generation. "There are people who are simply not prepared, or the system has not prepared them, to be absorbed into the IT industry. Now something has to be done to bridge that gap and it is going to be costly."

Forge Ahead BMI-T is a specialist information and communication technology (ICT) market research company. It focuses on black operational companies as opposed to investment companies because this is where they believe true empowerment takes place.

Director Simon White says the process of black empowerment is fundamental and the ICT sector is strategic. He says black IT companies have to organise themselves, stake a claim in the marketplace and increase competitive advantage. "Those entrepreneurs that create wealth by bringing value to the table and contribute beyond themselves, should be encouraged and supported," he notes.

White points out that there are currently about 150 entrepreneurial operating companies and their combined turnover has increased to about R1.5 billion. At the moment he views these companies as playing a catalyst role in terms of nurturing and developing the largely untapped and unsophisticated non-connected market.

But White is critical of the government`s mindset and lack of support. As an executive member of the Black Information Technology Forum (BITF), he receives feedback showing that members are disappointed with the lack of support and the existence of unfulfilled good intentions coupled with the creation of false expectations.

"People assume that they will get the support and they enter the market with that assumption, once the support does not come, then people obviously are going to bleed," he says.

White also aims his criticism at the Department of Trade and Industry (DTI), a body he says is supposed to champion the cause of IT entrepreneurs but instead has a dismal record when it comes to support.

"The DTI and its affiliates, such as the Foundation for Research and Development (FRD) and the South African Bureau of Standards (SABS) and others, are doing nothing for black ICT companies," says White. "Government entrenches the view that black is small and deserving of small contracts. This negates black companies to perpetual sub-contracting."

White says the government should set measurable policies and targets to which tender boards and parastatals have to conform to. "There is no need to perform in the absence of measurements and hence the procurement policies are applied in an inconsistent and ad hoc manner when it comes to empowerment," he explains.

The Electric and Allied Industries is one of the many divisions that make up the DTI. In responding to criticism, Electric and Allied Industries divisional director Ian Grant claims the industry is a fragmented sector, with concrete information and statistics not always identifiable or clear-cut.

Grant points to initiatives being undertaken by the division towards developing this sector. One of these is the SA IT Industry Strategy (SAITS) project with 3.5 million Canadian dollars generated towards the development of strategies aimed at the growth of the IT industry. He says the objectives of the SAITS project are to create employment, with an emphasis on the empowerment of previously disadvantaged and gender equality.

"Even if one speaks to members of groups like the BITF and IT Association, they themselves do not always have a good handle on the total picture of IT in general. It is a question of correlating all available information and when none is available, scratching for new information," says Grant.

To this end, the department is working on a comprehensive baseline study of the preliminary structure and size of the IT sector, the results of which could be out this month, Grant says. "In terms of skills and labour, there is still a significant amount to be done, before results can be made available in the first quarter of next year."

He adds that the department may not have always publicised what has been done, but suggests that the sector is not being ignored and there is definite undercurrent activity.

Benjamin Mophatlane, MD of Business Connection, raises the point that black businesses exploring new ventures are often automatically placed into the "black empowerment" category.

However, Mophatlane feels that the government is understanding of the country`s need to be competitive and equip people with skills. He says organisations like the DTI have of late really focused globally, especially in terms of ensuring agreements are implemented. However, he predicts that within the next few years, the DTI will shift its focus internally within the country, focusing on development.

Karen Heese, an analyst at BusinessMap, a company that tracks the development of black empowerment in business, says although it`s a difficult time for black economic empowerment companies, it is not the end. She feels there is movement away from traditional activities such as concentration on acquisitions and ownership, and a new move towards internal growth and adding value.

Leslie Pama, GM for technology services at Ornet Solutions, part of MB Technologies, says there seems to be no clear expression of what black empowerment is or should be, what it`s trying to achieve or how it should be measured. "Is black empowerment about more black faces in IT or rather about enabling black people to make a significant contribution to the industry?" he asks.

Pama concludes with reference to the Black ICT Achievers Award run by Forge-Ahead BMI-T in conjunction with the Black IT Forum: "True Empowerment will have arrived when the winners will have been polled from a cross-section of IT professionals in general, and of the winners, 55% are black. Until then, we appear to have two separate and unequal parts to our IT industry, one white and one black."