Top South African Companies Slow to Adopt E-Commerce

According to a report presented in Johannesburg on Tuesday by
BMI-Techknowledge, large companies are dragging their feet in plans to
commit to e-commerce.

The BMI-Techknowledge IT Top 200 Report revealed that while 98 percent of
the top 200 IT companies in South Africa had Web sites, only 10 percent of
these were e-commerce enabled.

The report indicated that this was due to change shortly, however, as
development focus within the companies would highlight WAN infrastructure,
e-commerce, ERP, LAN Infrastructure and data warehousing, as the most
important development drives.

“Service and e-business are the way of the future for the top 200,” said
BMI-Techknowledge’s IT consultant Barry Brady. “Once they have installed
their WAN infrastructures they will set up the infrastructure they need to
conduct business-to-business or business-to-consumer transactions over the

While this indicates that businesses certainly intend to gear up for
e-commerce, another trend highlighted by the report was that of a slight
diversification in the local IT industry as small-to-medium enterprises
(SMEs) muscle in for their share of the sizeable IT market.

In recent years, the Top 200 IT companies have accounted for the majority
of spending in the IT sector. That figure dipped to 46 percent this year
with SMEs finally taking the spending lead from the larger companies.

Brady predicts that the non-Top 200 companies will make up 60 percent of IT
spend by 2003.

The growth in IT spend by the SMEs is outstripping that of the Top 200 by
quite some margin, increasing by about 20 percent annually. Although a
number of these SMEs will then inevitably merge into the Top 200 of IT
companies, the competition and vitality of the sector is an encouraging
sign for a sizeable market estimated to be worth roughly R28 billion (US$4
million), that is 0.6% of the world market.

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