ICT for SMEs conference assesses the SME landscape WHILE THE ECONOMIC FORECAST may look generally gloomy, opportunities still abound for the small and medium business sector in SA - if they know where to go for support.

This emerged at the recent ITWeb ICT for SMEs conference, where speakers highlighted opportunities for local SMEs. Unfortunately, supporting SME growth is complicated by the fact that SMEs are ill-defined and not organised under particular umbrella bodies. In 1995, the Cape IT Initiative estimated there were around 80 000 SMEs within the SA ICT industry. According to the agency`s executive director, , that number has definitely grown. "Understanding the environment is extremely difficult. Most people can`t agree how to define the SME, let alone how many there are."

Regardless of their number, Manuel said support systems for small business are few and far between. "Although there is more support now, government needs to engage all SMEs from all sectors. Government needs to realign its perception of small business needs to those needs actually experienced by business."

On the role of ICT within the SME, Manuel said many believe technology is nothing more than e-mail and the internet. "This idea is limited and boxed in; too few are engaging technology in terms of business growth. Changing that perception is hard."

GOVERNMENT BOOST FOR COMMS SMES

A councillor at the Independent Communications Authority of SA (Icasa) Dr Marcia Socikwa, noted that the Electronic Communications Act (ECA) is in fact designed to favour small businesses. "It is intended to foster and grow small business and entrepreneurs."

With the ECA there is no longer a distinction between specific services. The electronic communications services (ECS) and the electronic communications network service (ECNS) are technology agnostic and services are no longer restricted to the incumbents, she said.

SMEs applying for ECS or ECNS class licences would face a shorter registration period, which could help inject competition into the services market, said Socikwa. "The old licensing process was prolonged and not efficient. ECA allows registration of class licences within 60 days. This is significant in view of the number of monopolies which have settled in the country; companies like , , ."

Icasa has identified two licence forms: with class licences covering regional access, and individual licences covering national access, each of which carry their own privileges and costs. Socikwa said SMEs should consider the class application both in terms of cost and demand. "Start-ups don`t have pockets that incumbents have, but if a sustainable business can be encouraged, then we will [encourage it]."

The authority`s role is to ensure that small business can make its mark in these regulated spaces, and Sockiwa suggested companies take lessons from the mistakes made by companies during the pay TV licensing process.

In a nutshell, small business should: know the market, or at least understand the demand for the technology they would like to implement; have a thorough knowledge of the technology; and most importantly, solid financial backing, she said.

She said many of the pay TV applicants only had partial funding from banks or investors, making the start-up of a licensed station almost impossible. "When you are talking about a billion dollar industry, partial funding was not enough. It could take 150 million, at least, to start up an operation like this."

POLICIES FOR SME GROWTH

The (DOC) deputy director-general of Finance and ICT Enterprise Development, Harry Mathabathe, said government policy is to assist small businesses to develop and grow.

"ICT is an enabler for SMMEs, it allows them to create sustainable business. Alongside that, the ECA, which allows for converged broadcasting, seeks to deliver and promote SMME cooperatives."

"SA has some of the best telecommunications and information technology policies across the globe. The challenge comes in implementing those policies. We are in the process of developing a project aimed at driving the implementation of those policies." The department is also looking at how to encourage the roll-out of quality broadband networks to help SMEs become more competitive. "Increasing ICT awareness in small business will increase the number of small businesses."

Another recommendation made in the DoC research report is that mobile usage needs to be accelerated. Given the proliferation of mobile devices, the SME should be adopting mobile applications and SMS/ MMS technologies more, he said.

BROADBAND AND INNOVATION

Several other topics were dealt with at the conference, including a discussion on the ins-and-outs of innovation. Dr , CEO of The Innovation Hub, said companies must remember that innovation is not just a clever idea, but something that can be developed, sold and have value for the market.

With much local innovation happening in the mobile space, , MD of Strategy, pointed out that small business is more likely to use ADSL technology, while enterprise business is driving the mobile broadband space.

GO OPEN

Open source companies are increasingly targeting small and medium enterprises (SMEs) in a bid to transform the "old model" of telecommunications provision in SA, says open source guru and director of Connection Telecom . Lith says the advantages of using open source solutions for SMEs are clear: better quality, higher reliability, more flexibility, lower cost and an end to "predatory" vendor lock-in.

BANDWIDTH AN SME CHALLENGE

The inability to scale bandwidth at a reasonable cost is keeping Third World SMEs from fully harnessing the power of IT to grow their businesses and gain a competitive advantage, says Paul Mulder, specialist technology group manager at SA. "The good news for SMEs is the growing trend for vendors to provide small businesses with easy, fast and affordable business solutions," he said.

GET MOBILE

GSM technology means SMEs no longer need to work from home, according to telecommunications consultant Maite Nathaniel Sebolai. Sebolai says vital business tools can be managed from anywhere using GSM technology. However, there is one drawback to this, he notes. There are still areas in SA where there is unreliable GSM coverage or none at all.



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