4 - 10 January 2001
Issue No.515
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Al-Ahram Weekly On-line 4 - 10 January 2001 Issue No.515 |
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The drive to use IT
Over a year ago, the Egyptian government took upon itself the promotion of information technology (IT) through enhancing awareness and encouraging the use of computers and the Internet. The government's goal is to make Egypt an exporter of IT, thus creating another source of hard currency for the country.
But this goal, according to General Manager of Microsoft Egypt Aly Faramawy, should not be an end in itself. "Becoming an exporter of software is doable, but we need to be realistic," he said, adding "I do not think we will make hundreds of millions of dollars in a short time."
What Faramawy does believe is that IT can facilitate development in a country's manufacturing and commercial sectors. As an example he cited Turkey's IT sector. Generating approximately $4 million in revenues last year, Turkey's IT sector is some seven times the size of Egypt's, but it does not export IT. The domestic demand for IT goods and services in Turkey outstrips the supply considerably.
"This is what we need in Egypt: business people with the drive to use IT to cut their costs or increase their revenues. These are the things that are going to help build this industry."
Faramawy suggests that the indirect impact of IT will be much greater than the direct impact. Using IT to improve manufacturing operations is one way it can play a constructive role in the Egyptian economy.
But to reach that stage, the factors holding back the diffusion of IT must be dealt with. Currently the use of new technology in businesses, government offices and homes is extremely limited. "In general, we are a bit behind," said Faramawy. He added that some organisations overspend on technology, while others spend nothing in this area.
Faramawy said that in Egypt there are approximately 400,000 business organisations, 90 per cent of which do not have any computers.
Among the benefits of bringing computers into the workplace cited by Faramawy are increased efficiency in scheduling and setting and monitoring work flow; decreasing photocopying and storage costs; establishing a Web presence and trading electronically.
The government can help with the task of increasing the use of IT in workplaces. One way it can do this, according to Faramawy, is for the taxation authority to require that all accounts presented to it be computerised.
But since IT is not only about acquiring equipment, trained personnel are also a must. According to Faramawy, "It is very difficult to get qualified IT workers such as developers, sales people and marketing people." Nonetheless, he added, Egypt has lots of people who are "trainable," a process that can take as little as six months.
Fostering the spread of the Internet is one way of building interest in pursuing IT careers and integrating it into businesses. Although Internet penetration is very low in Egypt, a situation that is a by-product of limited automation, Faramawy is enthusiastic about the increase in sales of personal computers to families. "This means that families, even those with medium-level incomes, are also investing in personal computers for their kids."
He suggested that to increase the number of Internet users, the system of payment by installments for computers, software, and Internet subscriptions should be made more widespread. The recent increase in Arabic-language content should also help to attract users. As Faramawy put it, "to get people interested in IT, there have to be interesting things to do with a personal computer other than play games or use it as a word processor." An increasing number of Egyptian dot.com companies are playing a major role in generating interest about getting on-line.
But content providers and Internet service providers (ISPs) are businesses with considerable fiscal challenges. "It is not easy to make money in the Internet world," Faramawy said, noting that start-up costs can be high and extensive marketing is needed to differentiate a business from its competitors.
Less risky and less costly than establishing virtual companies, are the possibilities the net offers for adding value to conventional retail businesses. "When traditional stores complement what they are offering in their shops with a strong Web presence -- that is a user-friendly interactive site -- this has three advantages. First, it allows for strengthening and personalising the relationship with existing customers. Second, it is a means of acquiring new customers. And thirdly, it can lower the retailer's costs because not everything need be displayed in the store, especially items that are not always in demand," he explained.
With more Egyptian companies, whether virtual or brick and mortar, setting up shop on the World Wide Web, Faramawy believes that e-commerce in Egypt is a sector with considerable growth potential. He forecasts that business-to-consumer e-commerce will take off in the near future. "The number of sites is beginning to increase and the means for providing secure payment gateways are developing," he explained.
But for the e-commerce structure to be complete, there has to be a smart system linking the retailer to its suppliers.
The government too can benefit from the methods used by e-retailers in dealing with the public. Faramawy suggested that the government can put its purchasing tenders on-line, thus saving on advertising costs. "At a later stage, we can have the bidding process on the net as well," he opined.
Faramawy is also enthusiastic about government plans to conduct dealings with the public over the Internet; Egypt's "e-government" is scheduled to go on-line in three years. "Although I am dying to have this implemented in Egypt over night, we are a big country, making implementation more involved than in smaller countries."
An essential element to the smooth functioning of e-commerce and the IT sector is the regulatory environment. Protection of content requires a clear-cut copyright law and regulations are needed to govern practices such as use of electronic signatures and credit card payment over the net.
Related link:
Microsoft
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