IT defies economic meltdown

April 29, 2009
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, NAIROBI, Kenya, Apr 29 – Information Technology (IT) can play an important role in helping companies respond to the difficult economic environment and perhaps even be a catalyst for recovery, an industry expert has suggested.

Microsoft Corporation General Manager East and Southern Africa Louis Otieno said when the economic forecast is uncertain, the necessary response is to focus on business fundamentals which can improve operational efficiency, reduce costs and ensures the firm is doing the most with the fewest possible resources.

“There’s no doubt that this is a time when thoughtful business leaders are also taking steps to ensure that their companies – no matter how large or small – are poised to compete successfully in the face of the uncertainty that lies ahead,” Mr Otieno said.

He opined that that as the effects of the global economic downturn begin to adversely impact on local businesses, entrepreneurs must re-examine their existing technology to maximise its usage to boost revenues and cut operating costs.

“By reassessing the capabilities of their existing technologies, businesses can streamline their operations. It comes down to applying these technologies in a manner that transforms the way the business tackles its operations, thinks  about its customers and appreciates its market,” he emphasised.

He also identified effective marketing efforts as a key to withstanding the devastating effects of the credit crunch sweeping across the world.

Against a backdrop of some companies already retrenching part of their workforce, Mr Otieno pointed out that cost cutting measures which are motivated by fear undermine the long term integrity of businesses and must be avoided.

Instead, he said such difficult operating environments call for clever and creative cost management.

Mr Otieno said amidst all this uncertainty, the software giant was prescribing a multi faceted approach to tackling the slump and help companies save money and be more competitive.

He said: “Technological innovation has opened avenues for entrepreneurs to access a variety of new and affordable resources that promote cost cutting. Voice technology embedded in some of the most basic Microsoft products has opened the door to free telephone calls.”

He said applications provided by Microsoft can be used to build simple monitoring systems for a one-man business or can extend to a sophisticated network of impeccably integrated monitoring systems.

Unified communications technology which combines voice, e-mail, instant messaging and video gives companies the scope to replace traditional phone systems with integrated software solutions reducing hardware and maintenance costs.

He assured firms that help was on the way with the anticipated arrival of the undersea fibre optic cable that will link the continent to the rest of the world and which will see a substantial improvement in internet bandwidth.

Once this infrastructure is up and running, the use of Voice Over Internet Protocol (VOIP), teleconferencing and other collaborative business technologies will become easier and more cost effective.

This development combined with Microsoft’s plans to move applications and computing power further into the internet, the capital outlay for the rollout of information communication technology systems is expected to reduce dramatically, he assured.

At the same time Mr Otieno warned against the rising cases of software counterfeits which he said adversely impacted on developers’ revenues and appealed to business owners to purchase genuine licensed software.

Mr Otieno however expressed optimism of the ICT sector’s growth. A recent study by International Data Corporation indicates that Kenya’s IT sector will generate more than 4,000 new jobs by 2011 and account for the creation of more than 100 new IT companies.

According to the study, over the next four years, Kenya’s IT industry will generate Sh2.7 billion in new tax returns and contribute new revenues of Sh37.7 billion to GDP.

The research indicates that software spending represents 14 percent of the total Kenya IT market.  Thirty two percent of IT employees in industry and the user base, are engaged in creating, distributing, installing, or servicing software.

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