by TINTSWALO BALOYI
JOHANNESBURG, (CAJ News) – SPENDING on information technology (IT) is projected to increase as the coronavirus (COVID-19) crisis eases in South Africa.
After more than a year of lockdowns, decreased market demand and economic downturn, lockdown restrictions have moved to level one.
The vaccine rollout is also underway.
“Although there is still a long way to go, the economy seems to be returning to normal,” said Steve Briggs, the Chief Commercial Officer at SEACOM.
He noted gross domestic product is projected to grow by 3,3 percent in 2021.
“While a full recovery will take time, South Africa has managed to pull itself back from a fiscal cliff and businesses are seeing signs of green shoots.”
Briggs said the start of an economic improvement would have many implications for businesses, their plans and their future spend.
“Specifically, when it comes to IT spend, the pandemic disrupted tech and digital budgets, so how are businesses likely to respond to the prospect of improved economic conditions?”
Briggs said now that the economy was in an upturn, businesses should also consider the opportunity costs of continuing to delay investments in digital innovation.
“The pandemic has wreaked economic and personal havoc, but global lockdowns have led to a massive boom in online activity.”
According to McKinsey, COVID-19 accelerated the e-commerce industry to reach ten years’ worth of growth in just three months at the start of 2020.
More consumers and businesses are doing their buying online, which is why the online user experience has become as important as well-targeted marketing initiatives.
Gartner initially predicted that IT spending would have declined by 8 percent in 2020 due to increased spending on business necessities, according to Briggs.
It now forecasts worldwide IT spending for 2021 to grow by 6,2 percent with “cloud computing, core business applications, security and customer experience at the forefront.”
Tech stocks are also expected to soar 25 percent over the next year as economies reopening across the globe has spurred new growth.
In South Africa, consumer spending figures also indicate that it is a good time for businesses to be accelerating IT investment decisions, Briggs added.
– CAJ News