South African businesses are way ahead of the UK, Sweden, the Netherlands and Denmark when it comes to formally aligning IT performance objectives with their business performance goals.
This is one of the findings from research conducted by Rackspace Hosting.
The average of the five countries amounts to just 36% but, individually, South Africa leads significantly at 60% over Denmark 32%, the UK 31%, Netherlands 28% and Sweden 24%.
A total of 250 IT decision-makers across eight commercial and industrial sectors were polled in the survey, with South Africa contributing 20% of the total sample. The survey focused on IT management (65%) and directors or above (28%). The remaining 7% were identified as other IT decision-makers.
A key finding of the survey is that with the many options on how technology is delivered to the business, IT decision makers are confused by the array of applications they can host, including accounting, finance, email, ERP, payroll and web sites.
Geoff Dowell, Rackspace spokesperson for the South African market, says another key finding is that businesses are slow to adapt to market conditions.
"In South Africa just 17% are 'considerably' reliant on applications hosted by a third party to deliver revenues to the business and 6% to 'some degree'. Denmark, the Netherlands, and the UK were higher."
The survey showed that 63% of the companies polled host at least one function externally. Popular IT functions hosted in-house are web sites (64%), print server (85%), payroll (78%), intranet/Internet (76%), HR/recruiting (83%), File server (82%), ERP (71%), disaster recovery (64%), CRM (64%), collaboration (71%), billing (81%), analytics/BI (74%) and accounting/finance (84%).
"We asked respondents how they expect the percentage of IT functions they run with an IT hosting, software as a service or cloud service provider to change over the next 12 to 24 months," says Dowell. "In South Africa, 4% expect a decrease and 63% anticipate it will remain the same. However, 27% expect an increase of between 1% and 25%. In the UK, 77% opted for staying the same and 13% to increase 1% to 25%."
Online marketing and branding presence is seen as becoming more important in South Africa, with 70% of respondents believing their organisation will increase its levels of online marketing either "moderately" (20%), "to some degree" (38%) or "considerably" (12%) over the next two years.
The main reasons for having IT applications hosted by a third party revealed interesting perceptions, with 48% of all respondents across all five countries answering cost-saving, 36% improved IT support, 22% insufficient in-house skills, 20% insufficient in-house resources, 13% improved back-up/disaster recovery and 14% to free up internal resources to focus on other areas of IT.
In South Africa, 53% agreed that having their IT applications hosted externally puts their organisation in a stronger position during an economic downturn while 41% agreed it places their organisation in a stronger position because of less exposure to licence agreements and hardware costs.
Cloud computing, software as a service (SaaS) and virtualisation are models and delivery options that businesses need to be thinking about. The survey base was asked to select each option as being of either "notable", "high"" or "very high" status. The overall outcome indicates that businesses are thinking ahead regarding IT delivery as 52% believe virtualisation will have an impact in 2010, 35% are looking at hosted services and even the leading edge sphere of cloud computing is expected to influence IT strategy for 30% of the sample.
Dowell concludes that business in general is having difficulty in deciding which way to go because of the expanded choice in delivery options now available.
"In the current difficult business environment the only way companies will maintain low risk levels is to come up with well researched IT performance strategies that are in step with business objectives."