Management Skills Pres, Sa - 6th Mar, V1p0

Management Skills in
Information Communication
Technology (ITC)
1 Eileen Leopold and Associates

Purpose of workshop
• To examine the issues regarding
management skills and their importance
to the IT industry development
• To consider the adequacy of existing

management programs and their
applicability to the industry

This presentation will address the following:
• 1. THE SA ICT INDUSTRY: CONTEXT AND

BACKGROUND
• 2. MANAGEMENT SKILLS: DETAILED FOCUS

Section 1: Overview of SA ICT Industry
Context and Background
• Definition
• Key ICT trends: What will affect management skills?
• The Global Picture: How does South Africa Stack up
• The SA market: who are the key players
overview of listed companies
the telecomms players
key multinationals
• How big is the SA ICT market
SA Telecomms industry
SA IT industry
> size, key growth areas and trends
• The macro context
economy
liberalisation
legislation

Section 2: Management Skills in the South African
ICT Sector
• The current situation
expenditure
vacancies
empowerment
• Where is the ICT sector in terms of management requirements
Is there a potential crisis?
• What skills do successful managers need in the future?
General attributes
Requirements by market segment
Industry trends
Attracting and retaining critical skills: lessons from leading players
• Broad overview of current Initiatives and programs
Skills Development and Employment Equity Acts
Government initiatives
Private initiatives
• Assess strengths and challenges of SA in growing its management
skills base
• General recommendations

Section 1: Overview of SA ICT Industry
Context and Background
• Definition
key multinationals
SA IT industry
economy
liberalisation

What is the ICT sector?
• Manufacturing • Services
office, accounting and wholesaling of machinery,
computing machinery equipment and supplies
Insulated wire and cable renting of office machinery
Electronic valves tubes and and equipment and
other electronic components computers
TV and radio transmitters, Telecommunication services
apparatus for line Computer and related
telegraphy and telephony services
TV and radio receivers,
sound and video recording
and associated goods
Instruments and appliances
for measuring, checking,
testing, navigating etc and
industrial process control
equipment

Key ICT trends that will affect
management skills
• Convergence - IT, Telecommunications and Media
• Rapid technological change & speed of innovation
outsourcing
• Globalisation
time based competition
development and attraction of resources
remote application hosting/ application service
providers
• Highly competitive market locally and globally;
long term relationships with customers are crucial
mass customisation and CRM key

Key ICT Trends cont.
• Internet and e-commerce (internet has become a
commercial tool )
new business paradigms
> web access in retail stores/ live phone support

companies must deliver solutions, not products
skills shortage and therefore high price of skills
• Alliances and product integration

• Power of ISP’s
• New internet access devices
-Thin clients, Net TV’s, kiosks, cellular phones

Changes In User Demands
• Maturation and change in end user demands
maximising value add
risk sharing
integration of IT and business competencies and
skills
focus on security
emphasis on supply change management/
logistics

Where is the ICT industry going?
IT Users (M) IT Spending ($B)

1,000 5,000
1 Billion Users Online

100 500
Automate
10 Automate Customers 50
Front-Office
Automate
Back-Office
1970 1980 1990 2000 2010
Source: International Data Corporation, 1997

The Available Market Will Mushroom
(Users and Devices on the Net; Millions WW at Yearend)
NonPCs =
600 37% of Devices
Devices International growth
500 Users
400 Bundled
browsers Corporate
300 and Intranets
registration
200
100
0
1996 1997 1998 1999 2000 2001 2002
Overview of SA ICT Industry
• Definition
key multinationals
SA IT industry
economy
liberalisation

The Big Picture
Turkey 26.3%
Egypt 24.6%
PRC 23.9%
Mexico 20.5%
Russia 17.4%
South Africa 16.7%
India 16.6%
Brazil 15.8%
Taiwan 14.6%
Argentina 13.9%
Israel 11.5%
Poland 11.0%
Portugal 10.9%
Indonesia 8.3%
Korea (2.4)%
(5.0)% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

World Telecommunications
• Ranks 1/3 in world market capitalisation behind banking and health
• Enabling technology - vital for other industries
• 1997: World Telecommunications Development report estimates
Info -communications industry $1340b per year
international trade/cross border trade > $120b
Exports account for more than 1/3 of telecomms equipment market
Increase in demand for telecommunication services
> cross border provision
> establish foreign commercial presence
> consumption abroad - movement of customers and staff

World IT Market
By Category
1997 2001
2002
Multiuser
Multiuser Systems Data Comm
Packaged Systems Data Comm Packaged 12.2% Equipment
Software 12.3% Equipment Software
4.9%
16.9% 5.4% 20.4%
IT Services
35.1%
IT Services
36.7%
Single-User
Single-User
Systems
Systems
28.7%
27.4%
Total: $752 Billion Total: $1.196 Trillion
BMI-T 16 Eileen Leopold and Associates

SA IT Market by Category
1997 2001
Multiuser
IT Services Multiuser
IT Services Systems
34% Systems Single User
39% 8%
12% Systems
21%
Single User
Systems
23%
Other/Industry Data
Data
Packaged Communications Other/Industry
Specific Packaged Communications
Equipment Specific
5% Software Software Equipment
9% 5%
17% 19% 9%
Total: R18.8 Billion Total: R35.7 Billion
BMI-T Eileen Leopold and Associates

Global Internet Consumers
(WWW Home Users)
Millions
120
100
U.S.
80
W. Europe
60 Japan
Asia Pacific
40
ROW
20
0
1996 1997 1998 1999 2000 2001 2002

Total Web Commerce By 2000
$ Billion R Billion
420
500 20 15
400
15
300
10
200
0.3
7 5
100
0 0
1997 2002 1997 2002
Worldwide Source: IDC/BMI-T 1998 South Africa
• 50 - fold increase overall
• Bus - Bus e-commerce overtakes consumer purchases in 1997, 4x greater by
2002
BMI-T 19 Eileen Leopold and Associates

Information Society Index 1998
Source: IDC Eileen Leopold and Associates

• Definition
• The SA market:
What is driving growth
Who are the key players
> overview of listed companies
> the telecomms players
> key multinationals
size
key growth areas and trends
economy
liberalisation

Demand Factors Driving Growth in SA - What are
implications?
• Globalisation
global expansion local companies - running out of track in SA
new entrants
internet purchasing options
• Mergers and Acquisitions
• Government and Parastatals
• SME sector growth
• Telecommunications deregulation
• New segments - Internet, Interactive Media, Call Centres, CRM
• Rise of industry associations and pressure groups
• Flurry of IT listings in past 2-3 years
125 new black IT companies in 4 years
300 Black investment consortia

No of Companies
10
20
30
40
50
60
70
0
JSE - RETAIL
JSE - INFORMATION TECHNOLOG
Y
JSE - VENTURE CAPITAL
JSE - FINANCIAL SERVICES
JSE - BUILDING & ENGINEERING
JSE - FOOD
JSE - TRANSPORT
JSE - ELECTRONICS & ELECTR
ICAL
JSE - DEVELOPMENT CAPITAL
JSE - HOTELS & LEISURE
JSE - BANKS
JSE - DIVERSIFIED INDUSTRIAL
JSE - INVESTMENT TRUSTS
JSE - PROPERTY
JSE - MINING HLDGS & HOUSES
JSE - PROPERTY LOAN STOCK
JSE - PACKAGING AND PRINTING
JSE - CLOTHING & TEXTILES
23
JSE - MEDIA
JSE - GOLD
JSE - SERVICE
JSE - METALS & MINERALS
JSE - PROPERTY UNIT TRUSTS
JSE - CHEMICALS, OILS, PLASTIC
No of Companies
JSE - HEALTHCARE
JSE - CASH COMPANIES
JSE - PRIVATE EQUITY FUNDS
JSE Companies by Sector, 1999
JSE - MINING EXPLORATION

JSE - DEVELOPMENT STAGE
JSE - BEVERAGES
JSE - TELECOMMUNICATIONS
IT Industry on the JSE
JSE - FURNITURE & APPLIANCES

JSE - LIFE ASSURANCE
JSE - SHORT TERM INSURANCE
JSE - EDUCATION & STAFFING
JSE - CURTAILED OPERATIONS
JSE - PLATINUM
JSE - REDEVELOPMENT
JSE - DIAMONDS
JSE - COAL
JSE - LIFE ASSURANCE
JSE - STEEL
DELISTED Count
Eileen Leopold and Associates
JSE - PAPER Count

JSE Companies by sector, 1999
Turnover
8,000
7,000
6,000
Turnover (R million)
5,000
4,000
3,000
2,000
1,000

# of Employees
JS
E
-D JS
IV E
JS E R -P
E SI RO
JS - C FIE PE
E L D R
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
O
0
-B T IN TY
U H D
IL IN U To
D G ST ta
IN & R l
JS G IAL
E & TE
-I EN X TI T ot
N G LE al
FO IN
R E S
M JS ER To
A E I ta
JS TIO - R NG l
E N E To
-H T ta
O
EC TAI
L l
JS H
E
TE N To
LS O t a
-P J & LO l
AC SE G
LE Y
KA - H IS T
G EA U ot
I R al
LT E
JS NG H T
JS E AN C ot
E - D
AR al
- E CA E
D SH PR
IN
To
U C ta
C O TI l
AT M N
IO G
N
PA T
& N ot
I al
JS ST ES
E AF To
JS ta
JS -F
U JS E
FI
N l
E E -F G
- E RN
IT - T O T o
LE U R O ta
D l
25
C AN
TR RE
& S To
O PO ta
l
N AP R
IC T
S PL
& IA To
N ta
l
EL C
EC ES
JS TR T
E JS IC ot
-M E
Employment
AL al
IN J -M
T
IN SE ED ot
JS G H - IA al
E LD SER To
-M G VI ta
C l
ET S & E
AL H T
JS S O ot
E & US al
-T JS M ES
IN
EL E ER To
JSE Companies by Sector, 1999
EC - D ta
O IA AL l
J M M S
JS
E
SE
M O T o
U N ta
-S -V D l
H EN NIC S
O T A To
R U T I ta
T R O l
TE E N
C S
JS R
E M AP To
-C IN IT ta
H
JS SU AL l
EM E - R T o
JS IC B E A N ta
E C l
- D ALS VE E
EV , O RA To
JS EL IL G t al
E O S ES
-I PM , PL To
N AS ta
JS VE EN l
E S T TI
C
C
- F TM
E A To
IN PI
TA tal
AN NT
C TR L
IA U T
L ST ota
SE S l
RV To
IC ta
ES l
To
ta
l
Eileen Leopold and Associates
SA ICT Market Capitalisation
Market capitalisation Rm 10/9/99 11/1/2000 %
• Electronics and Electrical 9 722 10 941 12.5

• Information and technology 56 280 88 015 56.3
• Telecommunications 2 729 *38 318 1304.1
• Total 68 731 137 274 99.7
• *M-Cell R35b
• Venture Capital about R1b
• Listed companies grew from 69 to 88 =27%

Market capitalisation > R1b Jan 2000
• M –Cell 35 061 Telecoms
• Dimension Data 31 729 IT
• Comperex 15 399 IT
• Datatec 13 677 IT
• Softline 4020 IT
• Ixchange 3677 IT
• Computer Configuration Holdings 2415 IT
• Advanced Software rechnologies 2383 IT
• Altron (incl Altron pp) 2253 Elec
• Reunert 1795 Elec
• MB technologies 2383 IT
• Altech 1574 Elec
• MGX Holdings 1555 IT
• PowerTech 1372 Elec
• Delta 1293 Elec
• Shawell 1275 telecom
• Idion technology 1119 IT
• Prism 1033 IT

Concentration of power
• Four companies account for 70%
M-Cell, Dimension Data, Comperex and Datatec
• Eight companies account for 80%
Altron and subsidiaries, Comperex, M-Cell,
Dimension Data, Comperex, Datatec, Ixchange
and Softline
• Of significance:
High degree of revenue derived and distribution of
products manufactured overseas

Telecommunications Services Players
Sector # Operators Key Players
Fixed wire telephony 1 Telkom
Cellular 2 MTN, Vodacom
Paging 23 Radiospoor, Autopage,

Paging Plus
VANS 25 EDS Africa, FirstNet,
Trafex
Radio Trunking 3 Fleetcall, Q Trunk,
One –to- One
Satellite 4-5 Orbicom, Sentech,
Telkom, Transtel,
Iridium
Public enterprise 2 Eskom, Transtel
Wireless data 2 Swiftnet, WBS

ISP Operators
• Internet Solution – (Didata)
• GIA – (Mustek)
• MWeb
• SAIX (SA Internet exchange) – (Telkom)
• UUNET Internet Africa– (Datatec)
• World Online/ Yebonet - (Vodacom)
• Intekom
• OpenNet is the Government service provider

• UniNetZA is the academic and research internet
• There are nearly 80 second tier ISPs who all have a very small
share and all obtain their links through one of the big players

Key Multinationals
• Arthur Anderson • Novell
• BEA systems • Pricewaterhouse Coopers
• Compaq • SAP Southern Africa
• Deloitte and Touche • SAS Institute
• Hewlett Packard • SCO Africa
• IBM South Africa • Siemens SA
• ICL South Africa • Symantec SA
• Lucent Technologies • Unisys SA
• Microsoft SA • Xerox SA
• Nortel Networks

• Definition
key multinationals
SA IT industry
economy
liberalisation
legislation

SA Telecomms Industry
• 1999 value about R28b
• International expansion
approx 65% of telecomms traffic passes through SA
telecomms equipment - pockets of innovation 1996 export orders of
about $63mEquipment supply side:
several factories have closed
> local manufacturers tend to be sales and distribution arms of
imported equipment
• Telkom dominates SA
vision is to establish itself as a link between east and west and the
gateway into Africa in terms of communications traffic
specific focus on sub saharan Africa
• Internationa Players also see see SA as gateway to Africa
Ericsson, Nortel, Lucent, Motorola, British Telecom, AT&T

Telecommunications Associations in SA
• The Electronics Industries Federation
The Electronics Industries Federation (EIF) represents many of the local
manufacturers.
Affiliated Companies/Association/Institute
Altech, ATIO Corporation (PTY) LTD, Automatic Systems Manufacturing (PTY)
LTD (ASM), DataFusion Systems (Pty) Ltd, Grintek Group Ltd, Hewlett Packard,
Mikomtek (CSIR), Protea Electronics, Reunert Ltd, SA Micro Electronic Systems
( Pty) Ltd (SAMES), SALBU (Pty) Ltd, Siemens Ltd, Spescom Electronics Ltd,
Telecoms Manufacturers’ Association (TMA), Telephone Manufacturers of SA (Pty)
Ltd (TEMSA), Tellumat (Pty) Ltd, 3M South Africa
•The Telecoms Manufacturing Association (TMA)

Aberdare Cables (Pty) Ltd, Alcatel Altech Telecoms (Pty) Ltd, ATC (Pty) Ltd,
Grinaker Electronics Ltd., Plessey Corporation Ltd, Siemens Telecommunications
(Pty) Ltd, Telephone Manufacturers of South Africa (Pty) Ltd
TMA represent at least 70% of telecoms equipment sales in SA and at least 90% of
telecom equipment are manufactured locally. It employs over 8000 people.

SA IT Market overview
SA IT Market by Revenue
TOTAL IT MARKET TOTAL SERVICES SERVICES AS PERCENTAGE OF TOTAL
50,000 37%
45,000
36%
40,000
35%
35,000
34%
30,000
R million
25,000 33%
20,000
32%
15,000
31%
10,000
30%
5,000
0 29%
1997 1998 1999 2000 2001 2002
Source: BMI-T 35 Eileen Leopold and Associates

SA IT Services Market
SA IT Market Growth %
50%
45%
40%
35% Consulting & Design
30% Systems Integration
IT & Business Process

25%
Outsourcing
Training & Education
20%
Support
15%
10%
5%
0%
1998 1999 2000 2001 2002

Shifting Concentration of Spending Power:
Implications for managers?
1997 2000
CAGR
% 97 - 01 26.3%
31% Top 18
10%
22.7%
Next 182
21% 18%
Others - Non-Top 200

20%
51.0%
48%
Total R18,8 Billion Total R29.8 Billion
Source: BMI-T 37 Eileen Leopold and Associates

SA Web Commerce Potential 2002:
Where will SA require ICT managers?
RBn
E-Banking & Asset Management 10 - 20
Reservations 1-2
Bus-Bus Trade 10 - 20
Consumer Trade 2,5 - 5
Advertising 0,25 - 0,5
Facilitation, Infrastructure 1-2

• Definition
key multinationals
SA IT industry
economy
liberalisation
legislation

Key Economic Indicators
South Africa 1998 1999 2000F
Economic Growth (GDP%) 0.5 0.9 2.6
Private consumption expenditure (%) 1.3 0.4 3.3
Government consumption expenditure (%) 0.5 1.1 2
Fixed investment (%) 4.8 -4.5 5.9
Change in inventories -5.1 0.9 5.1
Gross domestic expenditure (%) 0.5 -0.1 4.5
Exports 2.3 -0.7 3.3
Imports 2.1 -5 11.8
Current account Rbn- current prices -11.6 -4.2 -12
Current account -%of GDP -1.6 -0.5 -1.4
Prime rate (%) (end of period) 23 15.5 15
Inflation (CPI %) 6.9 5.5 4.9
$/DM $ per Euro 1.07 1.14 1.2

$/R 6.11 6.31 6.64
Gold $ oz 280 319 338
Source: ABSA Economic Research Dept

SA Demographics
• 1996 census 40.4b - estimates 44b
• 58% access to electricity, 45% running water
• Official literacy 61%
• 54% live in urban areas
• 46% live at or below subsistence
• AIDS growing 23%-32% - population decrease by 0.8% in
2005
• Unemployment rates between 33.8% and 38%. Highest
unemployment is Eastern and Northern Cape.
• Community, social and personal service sector together
with public sector accounts for 31% of total formal
employment

R&D Investment
• SA currently spends about 0.8% of GDP - in line with
Taiwan and Mexico and ahead of most African countries
• Difficult to estimate total IT R&D spending as much is the

innovative application of IT in any other sector
• Business sector funding accounts for almost 2/3 and

includes research into adaptation of software for local
conditions

Liberalisation
Multilateral agreements
• World Trade Organisation: (WTO)
General Agreement of Tariffs on Trade (GATT) :Marakesh Agreement
> tariff reduction program
> Affects > 80% of world trade in IT and telecommunications products
General Agreement on Trade in Services (GATS)
> Information Technology Agreement (ITA)
» SA is not signatory, but observes developments
> Agreement on Basic telecommunications (ABT)
» SA has made an offer
» Entry of 3rd cellular player
» Entry of TELKOM monopoly
» Offer includes details on value added services
• SADC - protocol on telecommunications

• EU Agreement

Implications For South Africa
• Emerging markets competition grew international traffic by subscriber

by by more than 2X rate of mature markets -
benefits of trade liberalisation greater for emerging markets
Triggers improvements in productivity
Initial increase in suppliers - later contraction
Boosts economic efficiency and productivity
Hardware comes from abroad - negative balance of trade

SA Telecomms Legislative Framework
– SA Telecommuncations Act 1996
• Established SATRA as the regulatory body
• 1993- 2 cellular operators - MNT and Vodacom - delayed till 2000- Add
about R6b over 5 years
• 1993 wireless data licence to Swiftnet - 60% owned by Telkom
• 1993 licenses to radio trunking operators - Fleetcall, Q trunk One to One
• 1997 sale of 30% in Telkom to Thintana Communications (SBC and
Mayalsia0
> control over PSTS, radio frequencies and VANS
> established Telkom - 5 year exclusivity - 2002

• 1998 Introduction of GMPCS (Global mobile Personal Communication
Systems) policy
> key players ICO, Global Star , Iridium
• SATRA declares ISP’s a value added service but need to apply for VAN
licence
• 3 of key focus areas:
> Affordable telecommunication services
> Fair competition
> Accelerated development of human resources capacity

SA Telecomms Legislative Framework
• Broadcasting Act
Green paper review to ensure policy development remains with Government
Merger of SATRA and IBA ?
Signal distribution infrastructure - Orbicom and Sentech
• CPE (Customer Placement Equipment) largely deregulated

ICT Sector
expenditure
vacancies
empowerment
General attributes
Industry trends
Private initiatives
skills base

Management Skills in the South African ICT Sector:
Current Situation
• For SA ICT sector to be sustainable in long term as well as to compete
on better terms in the global information economy focus must be given
to stimulate, there need to be a national focus on innovation, education
and training.
• The HSRC and Department of Communication estimate that there will
be about 200 000 more posts than skilled people to fulfil the needs of
the ICT sector by 2000. According to International Data Corp more than
1 million IT jobs exist worldwide with no-one suitable, or willing to fill
them)
• This lack of managerial, technical, research and policy skills will
seriously impact SA
• 1999 all institutions offering higher education had to register with
Department of Education - 4 did!

Current Situation
• Skills shortage is recognised, market is growing faster than the pool of
skills;
• IT industry employment turnover rate estimated to average between 20%-
30% and increasing;
• More than half of all graduates with computer qualifications leave the
country within the first year of their qualification. (Smart Office Computing)
• Major reasons for turnover:
• Emigration (It is estimated that more than 200 IT workers leave SA per month);
• Problems with management - perception of old style;
• Limited career growth in SA IT companies;
• Trained employees become independent contractors;
• Headhunting - better packages;
• Burnout;
• High middle management turnover - this carries a very high cost;
• Experienced / trained personnel are very mobile, and have the option to
earn overseas currency;

Where and why has SA been losing ICT skills?
• CPL survey 1997
Of those who leave only 15% return
Most popular destination is US, followed by UK, Australia, Canada
and New Zealand
UK in particular attracts Adabas/ Natural skills
• SA ‘s 2 main trade journals are full of advertisements
luring IT skills away
• Y2k pushed up salaries - unlikely to decline

FNB offers separate salary structure and additional perks to IT staff
• Foreign IT professionals are hampered by outdated
requirements for SA work permits
labour market information in SA so poor that the extent of
shortages in particular categories cannot be determined
• Internet technology is increasing job fluidity at an
international level

Expenditure on IT Training by Economic sector
Source: SAITIS Jobs and Skills Scan 1999

IT Vacancies v.s Turnover vs. Recruitment Rate

Empowerment in the South African ICT Sector:
• In 1998 there were approximately 70 black majority owned IT companies
Skills distribution of Empowerment Companies
Managerial Marketing and Sales Techinical Proffesional and Consulting
35% 38%
19% 8%
Forge Ahead BMI-T IT and Telecommunications Handbook, 1998

ICT Sector
expenditure
vacancies
empowerment
General attributes
Industry trends
Private initiatives
skills base

ICT Industry Lifecycle and Requirements of
Management
Entrepreneurial Introduce Choice between Cost-driven,
sales focused specialised functional and probably
Impact on management business unit functional
and systems. structure structure
Management Keep depends on
Style customer diversity of
focus product / market
specialisation
Where is the
SA ICT
industry?
Stage of
Lifecycle
Take-Off Rapid Growth Steady Growth Maturity

Management Skills Trends of the ICT Sector
• Development of skills and training is considered important, but
not urgent versus the growth and pace of change in the
industry;
• The impact of training needs to be taken into account.
Monitor Attend to
Significant constantly Refocus/Adapt immediately
Urgency
Pressing Periodic reviews Adapt Plan delayed

response
Monitor
Low Drop from list Periodic reviews
constantly
Low Significant Major

Impact

ICT Sector

expenditure
vacancies
empowerment
General attributes
Industry trends
Skills Devlopment and Employment Equity Acts
Private initiatives
skills base

Management Skills Trends of the ICT Sector:
Skills Needed
• Skills are needed for all round development, these include the areas of:
Strategic direction and vision
Project management
Project implementation Software;
Spec Development;
People Management;
Leadership;
Time Management;
Personal Development.

Future IT Skills Needs

Management Skills Trends
• Management skills
In general management norms are changing, but more so in the
ICT sector, in that organisations are becoming far less hierarchical,
employees are increasingly becoming responsible for their own
career path development, companies are offering remuneration
packages which employees mange as they see fit
Strong move to empower employees
Performance appraisal moving towards peer review and 360
degree appraisal
• This means that there is less of a need for some of the traditional
management skills and a greater emphasis on leadership

Important Attributes of ICT Managers - Industry
Sources
• Managers need to understand technology and be able to look at it from
a management perspective;
• Ability to deal with constant change and innovation is key;
• Leadership skills and interest in dealing with employees;
• Ability to identify and offer total solutions;
• Authority is needed - maximise flexibility;
• Balance between customer and production focus;
• Personal customer relationships, focused on the long term;
• Must understand client’s business;
• Be a team player;
• Project management;
• Lateral thinking;
How does this differ from other service industries?

ICT Managers can be segmented into 4 categories: Each
with specific challenges and needs
• 4 key segments:
IT Suppliers
> large international and local players

> SMMEs
IT Users
> large corporates
> SMMEs

Segmentation of ICT Managers: ICT Suppliers
• Large international and local suppliers

Separate but parallel career paths for people managers and
technical staff and technical project managers
Greater emphasis placed on understanding business in
general as well as specific industries
Training generally in house; senior management skills
courses often abroad
Ratio of people managers to staff about 12:1
• SMMEs
Greater need for managers to have some technical
competence
Entrepreneurial and financial skills becoming increasingly
important

Segmentation of ICT Managers: Users
• Large corporates
Senior management traditionally drawn from the business
(HR or Finance) as opposed to IT
Increasing cross pollination as IT Execs move into other
areas of business
> SA Corporates moving into IT - Nedcor, Wooltru, Old Mutual
Understanding IT as an enabling technology for
competitivess key
• SMME
Either managers are also technically competent
or, companies move to outsourcing, in particular application
hosting / ASP

Management Skills Trends: General Observations
• Move to outsourcing and application packages has reduced the need

for in depth technical competency in ICT managers
• Move to e-commerce, supply chain management and ERP has
increased need for business knowledge
• Only one in five IT employees will make good IT managers, according
to a leading training and HR company:
• Some ‘techies’ are so technology driven and logical that they are
not interested in dealing with the human/emotional side of the job
• Trend in companies, such as Dimension Data and IBM, to find external
managers from other industries, and train them on the technology and
required product knowledge
• Many are utilising the relatively inexpensive and very good quality
training in SA to work overseas;

Attracting and Retaining Skills
• Recruit direct from university
• Emphasize global nature of IT industry
• Exploit industry image (cutting edge, fast paced)
• Target expertise in low wage countries
• Offer above average packages, money is not the only factor
Reward loyalty and offer share options that lock people in
• Provide variety of challenges
• Utilise training & continuous development opportunities
• Rate of change / Threat of redundancy
• Develop a flexible organisational culture and values to balance the high
stress levels of the work
Pay detailed attention to environmental issues
• High intensity interviewing to ensure fit with the company culture and value
system
• Identify that appropriate aptitude exists
• Wants to be a manager, not completely technology driven

ICT Sector
expenditure
vacancies
empowerment
General attributes
Industry trends
Private initiatives
skills base

Skills Development and Employment Equity Act
• The Skills Development and Employment Equity Acts demonstrate that the
government is taking an assertive approach to making broad-based, effective skills
development a reality.
Takes effect April 2000;
Companies must pay SARS 0.5% of total payroll towards skills development
> SARS receives a 2% collection fee;
> Remaining amount is divided between the National Skills Fund (20%) and
the company’s choice of a Sector Education and Training Authority (SETA).
SETA’s Sector Education and Training Authorities replace the industry and
apprentice boards
Training levy refunds depend on whether in house training programs are in line
with the SETA skills development plan or fit the national skills development
strategy
SETA’s will need to market their services to their own industries
Most companies are unsure how these could affect their in house training
programmes
The IT SETA would be in a strong position to ensure industry cooperation and
establish valuable partnerships

Key initiatives:
Government or PPP
• IT NQF Forum Standards generating Body

Physical, Mathematics, Computer and Life Sciences, Computer Sciences and Technology
Potential key issue is that no vendor specific training can be registered eg. Microsoft
MCSE
Implications for training rebates
• DACST National System of Innovation NSI
System wide review of Public Sector Science, Engineering and Technology
Institutions
> identify generic issues to facilitate the restructuring of institutions
• National Research and Technology Foresight Project
aims to enable government to identify specific tehnologies and technology
trends that will best improve the quality of life for all South Africans
coordinate research efforts
identify key actions

Key initiatives:
Government or PPP
• ICDL
basic computer literacy
aim is to raise the general level of competency in IT and enable employers to invest
more efficiently in IT
• Acacia Project
Led by the International Development Research Centre it aims to empower sub
Saharan African communities to apply information and communication technologies to
enhance their own social and economic development
Currently operational in Mozambique, Senegal, South Africa and Uganda
A key output is establishment of telecentres within communities which includes
> basic communication services such as voice, fax, email and internet
> telemedicine,
> distance education
> municipal governance services
> news distribution

Strengths and Weaknesses of South Africa in Developing /
Growing the ICT Sector Management Skills Base: Other
initiatives
• Houwteq IT & Telecoms Software Training and Development Centre
Run by the Department of Communications at the Denel Aerospace Division
facility
• Technology Enhanced Learning Initiative (TELI)

Initiative focuses on the implementation of various projects
• SchoolNet SA
National NGO

Key Private Initiatives
• LINK Centre - Learning Information Networking and Knowledge

Established at the Graduate School of Public and Development Management and
funded by Vodacom it aims to assist in the training and development of black
SMME’s in the ICT sector
Literary and certificate courses, Academic degrees, short Executive courses
• Microsoft
Worked with 40 local training institutions to secure their accreditation as Microsoft
Certified Technical Education Centres (CTECS). These centres offer trainers of a
high calibre;
Opened up five Digital Villages to help increase technical literacy amongst less
privileged communities.
• Mustek
Acquired the national training division of Connection Group Holdings
Incorporating Training Connection and The Zone Computer Career Campus
Mustek also involved in training and education through its subsidiary Intersekt,
which has developed courseware in line with the Department of Education's
Curriculum 2005 project

Key Private Sector Initiatives
• Telkom Centres of Excellence

Established since 1996
Develop national expertise of the national information infrastructure
• IBM Institute for Electronic Government

Launched in 1997
• EducationNet
Distance education Network
• Executive and Management education

Wide variety of courses offered, mainly by private institutions
Almost all include elements of ICT and in particular the impact and application to
business in the future

ICT Sector
expenditure
vacancies
empowerment
General attributes
Industry trends
Private initiatives
• Assess strengths and challenges of SA in growing its
management skills base

Management Skills: Issues cannot be divorced from
general education
• Systemic problems in the education system
Not enough science and maths students are coming through at matric level
due to a shortage of teachers in these subjects;
> fewer than half of pupils finishing school passed mathematics (44.2%)
> just over a third passed with Science (34.7%)
> In both cases less than 10% were on higher grade
The poor performance at school level puts a restriction on what can be
expected from higher education.
# of first degree graduates in Computer Science and Data
Processing from SA Universities
600
500
400
# of Graduates
The Average annual growth
rate over the period 1992- 300
1996 was 6,5% 200
100
0
1992 1993 1994 1995 1996

Strengths and Weaknesses of South Africa in
Developing / Growing the ICT Sector Management
Skills Base
• Lack of science and maths teachers is limiting the number of students
qualifying in these subjects at school level
• The NQF (National Qualifications Framework) and other new legislation

has strong implications for the IT sector which has traditionally focused
on product-related and technically-oriented competencies
• Outsourced training is set to become a trend in business with the

introduction of the Skills Development Act
• In terms of the new act the value of training will be determined by

whether or not it adds value to the skills development plans and career
path of individual employees
• Vendor specific education does not

ICT Sector
expenditure
vacancies
empowerment
General attributes
Industry trends
Private initiatives
• Assess strengths and challenges of SA in growing its
management skills base

Recommendations: Some Pointers
• Home Affairs to review policy on the employment of

foreign ICT professionals
capacity building and transfer of knowledge
• Sponsor young ICT professionals to work overseas,

but build in return clauses
• Companies will need to offer globally competitive
packages
• Review the NQF regarding vendor specific training
particularly in the ICT sector
• Focus on building entrepreneurial and leadership skills

Sources
• SAITIS Baseline Studies
• Financial Reports
• BMI TechKnowledge
• ITWeb
• SA Computer Society
• Press clippings
• DTI
• Customs and excise
• IDC, Gartner, Dataquest
• AMPS
• Reuters
• Interviews with key industry players

Management Skills Pres, Sa - 6th Mar, V1p0

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Management Skills Pres, Sa - 6th Mar, V1p0

Hochgeladen von

Copyright:

Verfügbare Formate

Management Skills in

1 Eileen Leopold and Associates

• To consider the adequacy of existing

2 Eileen Leopold and Associates

• 1. THE SA ICT INDUSTRY: CONTEXT AND

• 2. MANAGEMENT SKILLS: DETAILED FOCUS

3 Eileen Leopold and Associates

4 Eileen Leopold and Associates

5 Eileen Leopold and Associates

6 Eileen Leopold and Associates

7 Eileen Leopold and Associates

 development and attraction of resources

 remote application hosting/ application service

 mass customisation and CRM key

8 Eileen Leopold and Associates

> web access in retail stores/ live phone support

 skills shortage and therefore high price of skills

• Alliances and product integration

9 Eileen Leopold and Associates

10 Eileen Leopold and Associates

IT Users (M) IT Spending ($B)

1 Billion Users Online

1970 1980 1990 2000 2010

Source: International Data Corporation, 1997

11 Eileen Leopold and Associates

13 Eileen Leopold and Associates

South Africa 16.7%

(5.0)% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

14 Eileen Leopold and Associates

> establish foreign commercial presence

> consumption abroad - movement of customers and staff

15 Eileen Leopold and Associates

Total: $752 Billion Total: $1.196 Trillion

BMI-T 16 Eileen Leopold and Associates

Total: R18.8 Billion Total: R35.7 Billion

BMI-T Eileen Leopold and Associates

18 Eileen Leopold and Associates

BMI-T 19 Eileen Leopold and Associates

Source: IDC Eileen Leopold and Associates

21 Eileen Leopold and Associates

22 Eileen Leopold and Associates

JSE - MINING EXPLORATION

JSE - FURNITURE & APPLIANCES

JSE - PAPER Count

24 Eileen Leopold and Associates

• Electronics and Electrical 9 722 10 941 12.5

26 Eileen Leopold and Associates

27 Eileen Leopold and Associates

28 Eileen Leopold and Associates

Cellular 2 MTN, Vodacom

Paging 23 Radiospoor, Autopage,

Wireless data 2 Swiftnet, WBS

29 Eileen Leopold and Associates

• OpenNet is the Government service provider

30 Eileen Leopold and Associates

31 Eileen Leopold and Associates

32 Eileen Leopold and Associates

33 Eileen Leopold and Associates

•The Telecoms Manufacturing Association (TMA)

34 Eileen Leopold and Associates

TOTAL IT MARKET TOTAL SERVICES SERVICES AS PERCENTAGE OF TOTAL

Source: BMI-T 35 Eileen Leopold and Associates

35% Consulting & Design

development and attraction of resources

remote application hosting/ application service

mass customisation and CRM key

skills shortage and therefore high price of skills

Triggers improvements in productivity

Initial increase in suppliers - later contraction

Boosts economic efficiency and productivity

Hardware comes from abroad - negative balance of trade