ICT projects to take strain
BMI-TechKnowledge has recently published their SA ICT Government Spending Trends – New Brooms, New Budgets report. BMI-T Enterprise Research Business Manager, Lesley-Anne Dos Santos states that the public sector ICT market is seen by most vendors and service providers as an attractive market since it is large and characterised by extensive projects.
To acquire more public sector customer’s go-to-market strategies of IT and communication vendors/service providers are being adapted with the ultimate aim to successfully address the government sector.
However, government is a difficult market which has its fair share of challenges including dealing with crime that is rife in our country, lack of service delivery, spending pressure to improve social development, implementation delays of major projects and cut-backs in government expenditure due to a shortfall in tax collections.
Government is aiming to save on unnecessary spending to maintain an expansion fiscal policy. BMI-T believes that government will start prioritising key projects due to the economic recession and the fall in tax revenues which is significantly hampering government’s spending capacity.
Inevitably, ICT expenditure will be affected and in turn important ICT and e-government initiatives could also take strain. An important aspect that BMI-T is mulling over relates to which projects might be affected due to the current decrease in tax revenues.
The research firm believes that in the short-term certain ICT projects will take a back seat while those projects relating to the 2010 FIFA World Cup will be put to the forefront. When all the hype of the major soccer event is over and a recovery of South African markets start to emerge, BMI-T predicts a major re-shuffle of ICT related projects.
“Government is currently focusing on improving service delivery and becoming more citizen-centric but a major internal focus of Government for the 2009/10 financial year”, say’s Dos Santos “is to modernise government systems and to improve existing systems and processes”.
The impact of the deficit in tax collection has not yet been revealed. Government ICT expenditure and growth rates are difficult to foretell and ICT figures in any particular year can be strongly influenced if certain planned projects are deferred into the next financial year or even cancelled completely.
Future fluctuations in hardware, software, services and communications costs could also influence the forecasted numbers. It is also important to note that government often bears the risk of fluctuations of ICT that is imported for specific projects. The total national government ICT expenditure on vendors/service providers will increase from R4.1 billion in 2008/09 to just over R5.6 billion by 2012/13.
Gauteng province had the highest overall ICT spend on vendors/service providers in 2008/09 compared to the other provinces but interestingly KwaZulu-Natal’s ICT expenditure on SITA eclipsed that of all other provinces in 2008/09, followed by the Eastern Cape province.
ICT projects and Government – comments and views
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