Why Ethiopia’s Software Industry Falters

Providing a conscious policy support and avoiding the popular presumptions about it are important strategies to help the Information Technology (IT) industry of the nation grow, argues Mignote Kassa, an electrical engineer with over 25 years of experience, of which 15 are in the IT industry.

The expected growth and transformation of Ethiopia cannot easily be realised without software usage. Some of our undergoing projects are very big and complex that they cannot be managed by the old ways and means to reach the pinnacle of success according to plan and budget.

These days, almost every company is becoming a software company. By considering business and operating models pioneered by the software industry and tailoring them to their own needs, organisations can lower their costs, boost performance and turn software into a competitive advantage.

Countries likeEthiopia, whose financial capabilities are very low, should have learned fromIndia. In the last 20 years,India’s software industry surpassed the export income of any of its export products that began 100 years ago.

The reason is this industry needs skill and marketing unlike the others that require prosperity. The best students inIndiago to the Information Technology (IT) colleges knowing that they definitely get rewards.

The IT industry inIndiahas gained a brand identity as a knowledge economy. It has two major components: IT Services and business process outsourcing (BPO).

The growth in the service sector inIndiahas been led by the IT sector, contributing substantially to increase in gross domestic product (GDP), employment and exports. The sector has increased its contribution toIndia’s GDP from 1.2pc in 1998 to 7.5pc in 2012.

The IT-BPO sector inIndiaaggregated revenues of 100 billion dollars in 2012, where export and domestic revenue stood at 69.1 billion dollars and 31.7 billion dollars, respectively, growing by over nine percent. The industry’s share of total Indian exports increased from less than four percent in 1998 to about 25pc in 2012.

In contrast,Ethiopia’s private sector engaged in the software industry has not been able to show the fruits of technology and grow as observed in the other world. It is only the banking industry and a few big companies that have utilised the benefits gained from software of foreign companies.

But, it is to be noted that these entities are using expensive software while there can exist ample resource locally with less price. The number of universities and colleges teaching IT has also grown but the country has not been capable of providing them the core job of software production.

Little achievements had been seen from most of the existing local software companies from the small opportunities offered to them. A few could have been competitive with the international companies if proper support was given from the state and the society.

The situation is different in other countries. The time spent by the local software producers was sufficient to be reliable sources competitive in all respects. Due to various hindrances like limited resources, inexperienced marketing, shallow knowledge of the subject matter, prejudice of incapability from the authorities and so on, the country is assumed to have no dependable companies.

Moreover, software needs awareness. Though marketing inEthiopiais undeveloped, this situation aggravates in software systems and weak utilisation often results from such lack of awareness.

The free IT exhibitions still could not attract many customers. No IT advertisement or promotion is made by the state or its affiliated enterprises.

The weak economy of the country hinders the admiration of information systems by the private sector. The lack of proactive and dedicated awareness activities to deploy trained executives whose result needs time is common in the existing discouraging atmosphere.

The targeted software development works or those under process are too few though a big infrastructure is built. The result is a big tanker with little water.

There is no proper means of software tenders and evaluation. Right from the start, the criteria of procuring software allows participation of all, including the incapables in the field, and favors those having big turnover capital and colorful documents without being examined.

There is a deep rooted cult on foreign products and doubt on the indigenous capabilities. Lack of policy and strategy from the government to encourage and guide IT services especially for local companies is clear.

Of course, the local producers themselves do not upgrade themselves in some instances. They repetitively take works fail without being monitored and punished. The owners of the projects deliberately retender the failed projects to get their piece of the cake again and again, bleeding their own organisations.

The works to be done in software projects are mostly obscure to the user and are not rigorously tested and transferred to the owner. The major prospects being government organisations, the bureaucracy either lacks understanding about the products or is susceptible for corruption.

Even when implemented, the technology requires dedication of the customer to transfer it to its business processes where the work force is stagnant. Besides, the support following the handover of software is not considered as essential and simply left out for lack of budget.

The big flow of IT employees to better payments also creates disappointing situations in project accomplishment. Sometimes, trained and responsible people that care for such systems are transferred from projects without understanding their value.

The solution is that local private enterprises which can deliver a refined basket of services tailored to local needs must be promoted and appreciated. This will push them to look outward and serve even other countries and become a source of revenue to the country.

Actually, it is possible to deliver a combination of IT based services tailored to the needs of the community more efficiently at a lower cost than any foreign service provider. It is, therefore, recommended the government bring in policies to promote entrepreneurship for delivery of IT based services.

To give the opportunity to the private entrepreneurs until a reliable stage is achieved, a model where services are delivered through government support can be provided after examining companies and the effectiveness of their systems. This is the principle now followed byChina.

Hence, a successful growth and transformation can only be achieved after the government and businessmen believe in their local capability, remove the prevailing obstacles and clarify the advantage of software through policy discussions . This must be then followed by giving large controlled assignments to qualified developers to carefully study business processes and implement the required systems, as a result of which, those who achieve the goal shall be awarded and promoted to even participate in the international arena, like India and China.

By Mignote Kassa
He is an electrical engineer with over 25 years of experience, of which 15 are in the IT industry.

Published on September 29, 2013 [ Vol 14 ,No 700]



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