South Africa`s small and medium businesses (SMBs) are far more concerned about business basics and providing opportunities for the unemployed than they are about IT spending, says research house BMI-TechKnowledge.
BMI-T was commenting in a report released by Access Markets International Partnerships, a strategic consultancy in the US. The consultancy said in its SMB IT and e-business spending report that in advanced economies, SMBs would increase their IT spending through PC and server upgrades and technologies such as Internet Protocol and wireless networks, and enterprise applications.
The report says that in contrast, SMBs in developing economies are still in the process of building basic IT infrastructure.
There are up to three million SMBs in SA, according to the companies and intellectual property registration office. However, the bulk of these companies are not able or willing to invest in IT yet.
Roy Blume, research manager of software services at BMI-T, says IT is not the main priority when it comes to South African SMBs.
"The South African economy is driven by the manufacturing and agricultural sectors which have low PC penetration. If we look at the numbers, a high percentage of SMBs don`t have electricity, are geared towards building an infrastructure and don`t waste money on firewalls," he says.
"The most important thing is getting the SMB market up and running."
If this sector uses PCs at all, they are used for basic functions like running Excel, he adds.
Tebogo Khaas, president of the local SMME Forum, says SMBs would first consider spending money on things other than IT.
SMB IT spending is likely to be directed at mobile connectivity, says Khaas.
Another factor hampering SMB IT spending in SA is what the experts term the "grudge" purchase: spending money on items that don`t deliver immediate or tangible benefits.
South African business owners focus more on the core of their businesses rather than grudge spending, or things like IT security, adds Blume.
Almost every SMB that does have an IT infrastructure makes use of outsourcing because few have in-house skills to fix IT problems, says Blume. Khaas agrees that there is a growing preponderance towards IT outsourcing.
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