SOEs accounted for 6.5% of ICT spend in 2005
Services accounted for the bulk of IT spending at roughly 1.4 billion rand, followed by hardware at 975 million rand and software with 722 million rand, said Natalie Bryden, senior analyst and author of the report.
"The current restructuring and cost cutting initiatives underway at SOEs has led to a reduction in IT expenditure. Enterprises such as SA Post Office and Transnet have undergone radical change in their approach to IT over the past few years as CIOs have sought to renegotiate supplier contracts, consolidate and standardise IT infrastructure, and in so doing, saving their organisations millions," she said.
Transnet – which includes Spoornet – is the largest consumer of IT products and services in the SOE space. The company, which accounts for approximately 39% of all IT expenditure in the SOE sector is expected to reduce its IT expenditure between 2006 and 2008 and will have a negative impact on the overall IT expenditure growth in this space, the report added.
In addition the report has also uncovered that organisations such as SA Post Office, SABC and SAA are making use of newer technologies to generate revenue.
"In SOEs the focus is on improvement of service delivery and efficiencies, cost cutting and a consolidation of the IT infrastructure coupled with the rationalisation of disparate systems to realise economies of scale," added Bryden.
Looking beyond 2008, BMI-T is optimistic about a SOE IT spend recovery as government investment on key transport networks is expected to increase dramatically during the next few years, while investment in residential housing, community services, water and electricity has also been prioritised.
"The government is expected to invest 372 billion rand in infrastructure in terms of its Accelerated and Shared Growth Initiative of South Africa (Asgisa) initiative over the next three years and any infrastructure expansion will require an extended IT infrastructure," concluded Bryden.
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