When Dimension Data SA chairman-designate Andile Ngcaba attended a telecommunications conference in Cape Town in 1993, he was one of only a few black people in a sea of white faces.
"The number of black people in the industry was minute," he recalls. "I'm not saying the numbers today are satisfactory, but if I compare 1994 with 2004, I think a lot has been achieved."
But there is still much more that needs to be done before the sector reflects the demographics of SA society, he says. Black equity ownership is still insignificant and the industry is still white dominated.
However, the pace of transformation looks set to accelerate in the next few years. First, the information & communications technology (ICT) sector is getting its own empowerment charter. Second, the introduction of charters in other industries is forcing IT companies to transform to keep growing and winning new business.
But even more needs to be done, says Lufuno Nevhutalu, chairman of black-owned enterprise solutions company Cornastone. "It's still an industry dominated by white companies."
Many of these companies are still not committed to transformation, he says. "There are many black people coming out of university and many of them do not have jobs. This shows the industry is not willing to invest in new, black talent."
The excuse often given for this is that it's hard to transform, given the poor state of the industry. This does not hold water, Nevhutalu says.
"I worked in IT companies before the bubble burst, when we had an opportunity to do this. What did they do? Absolutely nothing. It's only in the past four years that things have started to go badly [for the sector]."
Faritec deputy CEO Hasmukh Gajjar says: "People have probably moved forward in terms of their mind-set. But, in terms of an audited view of progress, it's not significant."
Now that a legislative framework is imminent, IT companies are feeling the pressure to respond to empowerment. Some, such as Business Connexion and Datacentrix are well advanced in their plans.
Much of the change is still tactical rather than strategic, Gajjar says. "I'm not sure we will ever get to the utopian situation where business changes because it understands the need to change. Business is changing under duress, which leads to questions about sustainability."
Not enough has been done to bring black talent into the sector, Gajjar says. Not only are there not enough black IT graduates, but the industry itself is not being proactive about recruiting the talent that exists, he says. There is too much focus on the "bottom-up" approach, rather than bringing in people at more senior levels.
"Black people seem to be laying network cables these days, but as you go up the value chain, how many black people are playing in these areas? Very few. The thinking is that the more we train people to lay cables, the more successful we'll be in transformation. That's hogwash. I think people are not being pressured sufficiently to look across their skills base," Gajjar says.
Companies that procure IT goods and services have a role to play in helping change this, Gajjar says. They can do this by only contracting companies that employ black people at more senior levels.
It might not be that easy. Winston Mosiako, MD of black-owned IBM business partner Lechabile, says retaining good black skills is becoming increasingly difficult. They're in high demand, so they keep moving jobs to earn more money, he says.
The industry needs to invest more money in broad-based IT education and training, he says.
Even small companies such as Lechabile have a role to play, Mosiako says. In 2000 Lechabile started a programme called advanced career education. In partnership with IBM and Standard Bank, it provided 16 university and technikon graduates with life-skills and IT training. They then spent nine months working for Standard Bank, which later employed all of them.
Mosiako says the IT industry must do much more than it has to transform itself. It could have better used the boom years of the late 1990s to do empowerment transactions. Money was more freely available then and investors were willing to pump money into the sector.
Business Connexion deputy CEO Benjamin Mophatlane says local IT companies spent the late 1990s pursuing offshore strategies that were "not necessarily in the best interests of SA".
He says: "They destroyed a lot of shareholder value. That money could have been put to better use back home. The industry should be criticised for not doing more during the boom.
"Look at the kind of money that has left SA and the terrible acquisitions made by big companies. How much of that money could have been reinvested in SA in skills development?"
Empowerment is a strategic national imperative, but Mophatlane says investors want to make money.
"Investors look for attractive returns and attractive returns haven't been coming out of the IT sector. When the upturn eventually comes, we'll have one more chance."
If the expected recovery in the industry doesn't happen soon, companies will need to become more creative in structuring empowerment transactions and in bringing in more black talent.
The message is clear - more must be done. As Faritec's Gajjar puts it: "Everyone is talking the talk, but we aren't walking the walk just yet."
