You know things aren’t business as usual in the IT world when Gartner vice president of research, John Lovelock, asks: “Have you read Alice in Wonderland?” He was referring to the scene in Through the Looking Glass where Alice is surprised that she hasn’t moved at all after running until she was out of breath. The Red Queen explains: “Now here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must try to run at least twice as fast as that!”
This is how Lovelock summarised the state of affairs for South African CIOs – so I guess the good news is that if this is what life feels like at the moment, you’re on track.
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“My headline for South African CIOs is that you really have to run,” said Lovelock. “It’s not going to get any slower. The changes in IT are coming more rapidly. And these changes are compounded by the changes coming at business as companies shift from traditional to digital business. To cope you need a better IT foundation than the one that currently exists in South Africa.”
Lovelock was discussing the results of the analyst house’s August 2015 IT spending forecast for South Africa in advance of the Gartner Symposium/ITxpo 2015 in Cape Town at the end of September. IT spending in South Africa is on track to total $25.3 billion, or R304 billion. From the point of view of offshore suppliers to South African businesses this is a decline of 4.3% from 2014, but when you factor in the exchange rate, this is actually an increase of 6%, with a 5.9% rise forecast for 2016, and 4.7% in 2017, said Lovelock. Indeed, sub-Saharan Africa is the second fastest growing region in the world for enterprise network equipment, infrastructure software, mobile phones, PCs and tablets.
“IT spending in South Africa is about where it should be,” said Lovelock. “But foundational investment such as hardware spend is a bit low.” This impacts South Africa’s ability to make the necessary step-change needed to reach the next level of productivity in the country, including advances in business process management (BPM) and automation.
“South Africa has maxed out the productivity that can be achieved purely through employees and machines, and needs to shift to the next level: IT and automation,” he explained. As well as missing out on productivity gains, Lovelock warns about the risk of international isolation if South Africa doesn’t meet global market expectations for automation.
One area where the lag in foundational spending on servers, application software and infrastructure software is manifesting itself is in cloud infrastructure and the uptake of true software-as-a-service (SaaS) applications. According to Lovelock, he looks at three main technology drivers of SaaS, and South Africa still has work to do on all three.
“There is not a lot of local capacity with reliable response times; when it comes to ubiquity of communications, the spread of enterprise-grade networks across South Africa could be better; and finally, South African business practices are not standardised, especially with international suppliers,” said Lovelock.
He advises CIOs looking into SaaS applications to consider how closely their business practices and local needs are aligned with services developed outside South Africa. For instance, does the software cater for the South African tax structure and the nuances of local employment? “Will you need to change practices to match with the cloud, because this is usually more tenable. The cloud is typically configurable, not customisable,” said Lovelock.
Next, said Lovelock, CIOs should look at who in their organisation needs access, where and when. Is it possible to centralise cloud-based services to major centres where connectivity is good enough for cloud services? But what does this mean for activities that typically take place in branch offices around the country?
Referring to the need to shift to the next level of productivity, Lovelock concludes: “This isn’t a finite window of opportunity as such. It’s more of an open invitation when you reach this level to take the next step. South Africa, however, is currently out of step thanks to the lag in spending on data centre and infrastructure.”