IT Business Plan

Information technology pertains to developing, maintaining, and using computer systems, software, and networks to process and distribute data. It refers to aspects related to computing technology, including hardware, applications, networking, the Internet, and the people working with these. An IT business plan is a pivotal document in starting a new, expanding your current, or buying an existing IT business.

The ICT Sector in South Africa (An Overview)

IT spend in South Africa is forecast to increase at a higher pace than the economy in 2020. Although the general state of the economy has a direct impact on the growth of the ICT sector, its customers continue to invest in technology and the sector consistently depicts a growth rate that is higher than GDP. Cybersecurity is a high priority, with global statistics indicating that South Africa is the third most targeted country in the world for cyber attacks. Alleged IT-related procurement irregularities revealed through a number of commissions of inquiry and investigations continue to affect the reputation of some industry players. It is estimated that there are over 13,000 IT companies and more than 3,000 electronics companies in South Africa. A vast majority of these being small companies employing less than 50 people.

New and growing trends will provide opportunities for small and large players in the sector. These include growth in telecommunications, data centre revenues, and artificial intelligence (AI), where start-ups are expected to lead innovation. Digital transformation to improve customer experiences and online purchasing, fintech banking, augmented reality, and virtual reality are some of the technologies that will disrupt the South African ICT industry in 2020. The industry is characterised by consolidation and convergence of companies within the IT sector, and between companies in the IT and telecommunications sectors.

ICT Sector Growth

South Africa’s ICT sector continues to demonstrate dynamic growth, increasing 12% from R204 billion in 2017, to R229 billion in 2018. The ICT sector has one of the country’s biggest job markets and is one of the largest contributors to the economy, driven by mobile services. Over a four-year period (2015-2019), the combined revenue for the sector increased by 6,5% , with telecommunication services revenue increasing by 6,4%; broadcasting services revenue increasing by 8,8%; and postal services revenue showing a declining trend, decreasing by 3,4%.

In 2018, telecommunications services depicted the highest revenue growth year-on-year out of the sector, increasing by 14,4% from R163 billion to R187 billion. Broadcasting services revenue increased marginally by 3,7% from R35 billion to R36 billion; followed by postal services revenue which declined by 0,1% to R4,7 billion in 2018.

The arrival of Microsoft Azure data centres and Amazon’s AWS Direct Connect on South African shores are powerful and encouraging indicators that the international business community is confident about our economy. Any expansion in the sector would result in much-needed job creation for suitably-skilled individuals.

With the opening of local data centres and the Cloud moving closer to the end users, digital tools are more easily available to revolutionise the customer experience. This shift is especially relevant for the healthcare, hospitality, and financial solutions industries, where real-time data access and management is fundamental.

Most business strategists agree that planning is one of the most important parts of running a business. Whether it is a large multinational corporation trying to plan an expansion or a small business launching a new product, the importance of a well-executed business plan is key. Our developments are used regularly to create a vision, secure funding, secure non-repayable business grants, attract team members and/or manage the business.

Essential elements for a well-structured IT Business Plan include:

•Executive summary: This is an overview of your business and the plans for it. It comes first in the business plan and is ideally one to two pages.

•Opportunity: This section answers these questions: What are you actually selling and how are you solving a problem (or “need”) for your market? Who is your target market and competition?

•Body: Includes taking the opportunity and turning it into a business. This section covers the marketing and sales plan, operations, and the business milestones and metrics for success.

•Company and management summary: Investors look for great teams in addition to great ideas. This section describes the current team of the company and future additions to it. A quick overview of your legal structure, location, and history if you are already operating needs to be provided.

•Financial plan: The financial forecast is key in a business plan. DTC assists with this service.

•Financial projections: This includes eight documents namely the management account, income statement, balance sheet, cash flow, cash forecast, break even analysis, loan amortisation schedule and fixed asset schedule with ratios, graphs, and calculations.

•Annexes: Include statutory information needed by funders in an application (contact us for the complete list).

At DTC, we understand the complexities of the numerous requirements and criteria for an accurate and custom business plan. No matter the use of the document, be it for, raising funding and/or attaining non-repayable business grants, we guide you through the process and provide access to our extensive network of funders.