Docstoc

Goals and Objectives

Document Sample
Goals and Objectives Powered By Docstoc
					CITI PROPOSAL TO INFODEV INCUBATOR INITIATIVE
SUPPORT FOR EXISTING INCUBATORS IN DEVELOPING COUNTRIES
                                             Table of Contents

1 Proposal Outline ........................................................................................................ 3
1.1     Type of Organisation........................................................................................ 3
1.2     Contact Person ................................................................................................ 3
1.3     Country ............................................................................................................ 3
2 Goals and Objectives ................................................................................................ 5
3 Executive Summary................................................................................................... 5
4 The Proposal ............................................................................................................. 6
4.1     Overview.......................................................................................................... 6
4.2     Bandwidth Barn Incubator Facilities ................................................................. 8
4.3     Management Team and Staffing ...................................................................... 9
4.4     Evolution and Business Model of the Bandwidth Barn ................................... 10
4.5     ICT strategy ................................................................................................... 13
4.6     Business Strategy .......................................................................................... 14
4.7     Training.......................................................................................................... 15
4.8     Networking and Marketing Services ............................................................... 15
4.9     Portfolio and Networking ................................................................................ 16
4.10 Financials ...................................................................................................... 17
5 Project Administration.............................................................................................. 17
6 Main Activities ......................................................................................................... 19
6.1     Business development ................................................................................... 19
6.2     Training.......................................................................................................... 20
6.3     Networking..................................................................................................... 20
6.4     Marketing ....................................................................................................... 21
7 Deliverables............................................................................................................. 22
8 Monitoring and Evaluation ....................................................................................... 24
9 Budget ..................................................................................................................... 24
1 Proposal Outline

       CITI PROPOSAL TO INFODEV INCUBATOR INITIATIVE
       SUPPORT FOR EXISTING INCUBATORS IN DEVELOPING COUNTRIES

  1.1 Type of Organisation

The Cape Information Technology Initiative (CITI) is a Not for Profit Public Private
Partnership in the Western Cape of South Africa. CITI’s mission is to promote Cape
Town as a global ICT hub and gateway into Africa, thereby facilitating the creation of
jobs and prosperity through ICT. It focuses on four core areas:

      ICT Cluster development (events, networking & Cluster facilitation),
      ICT Business Development (incubation and Entrepreneurial support),
      ICT Skills Development and
      ICT Research & Policy.

CITI has assisted local business development through entrepreneurial support
programmes and continues to play an important role in fostering an enabling ICT
environment in the region, creating necessary linkages both nationally and
internationally.


  1.2 Contact Person
Mr. Masedi Molosiwa
Executive Director
Cape Information Technology Initiative


  1.3 Country
South Africa

Telephone Numbers
Office: +27 21 4097000
Mobile: +27 83 272 3507

Website: www.citi.org.za

Total Cost of Project: $ 445.600

Amount contributed by Participating Organisations: $180.000

Details of Lead Proponent (Department of Trade and Industry):
                      Contact Information:
                      Tumelo Chipfupa
                      Department of Trade and Industry (South Africa)
                      Cnr Church & Prinsloo Streets
                      Room 817
                      Fedlife Building
                      Pretoria 0001
                      South Africa
                      Tel: +27 12 310 1559
                      TumeloC@dti.pwv.gov.za
                      www.dti.gov.za

                      Role and Type of Contribution: The contribution is by the
                      Department of Trade and Industry - Sector partnership fund, an
                      innovative fund aimed at creating growth in the emerging sectors
                      by encouraging private sector contribution to ensure Private –
                      Public partnership. This fund is a Two – One match where every
                      Rand contributed by the Private sector will be matched by this DTI
                      sector partner fund. This funding is paid retrospectively on receipt
                      of proof of expenditure.
                      Amount of Cash contributed in US$ by the DTI to date:
                      approx. $100 000 (1.00 USD = 8.31000 ZAR) as at Monday, 17
                      February 2003
                      Estimated in kind contribution: Nil
                      Period over which contribution will be made available: The
                      application for 2002 funding was received and approved.

Details of Additional Proponent (UUNET SA):
                       Contact Information:
                       James Bayhack:
                       Regional Sales Director,
                       UUNET SA
                       P.O. Box 50743
                       Waterfront
                       8002
                       South Africa
                       Tel +27 21 658 9800
                       jamesb@uunet.co.za
                       www.uunet.co.za

                      Role and Type of Contribution:
                      UUNET SA is the private sector investor in CITI’s Incubator
                      Project, Bandwidth Barn due to the Sector Partnership
                      requirements as indicated above. UUNET is also the supplier of
                      bandwidth to the Incubator.

                      Amount of Cash contributed in US$ by the DTI to date:
                      Year 2002 - $50 000 received.
                      Year 2003 - $80 000 agreed.
                      Estimated in kind contribution:
                      Nil
                      Period over which contribution will be made available:
                      Funds for 2002 have been received and an agreement has been
                      reached for a larger contribution of $80 000 for 2003.




2 Goals and Objectives
The Bandwidth Barn is a physical networked, vibrant ICT incubator that facilitates the
development and growth of start-up ICT entrepreneurs. The concept of the Bandwidth
Barn was developed after the realisation that the cost and access of bandwidth for start-
ups in South Africa was prohibitive due to the current telecommunication regulation. The
idea of a co-operative model to reduce the barrier to bandwidth access was developed.
Furthermore, the need for more business strategy, development and operational support
was identified as critical to the growth and development of ICT SME’s.

The current Bandwidth Barn model has proven to satisfy a real need. There is growing
recognition for a need to expand the scope of benefit to the greater majority otherwise
referred to as the Previously Disadvantaged Individuals. The intention is to therefore
create another layer that created the space for emerging entrepreneurs. The Launch
Pad idea has been formulated as a dedicated space within the incubator, focusing on
supporting previously disadvantaged ICT entrepreneurs. The Launch Pad will, in a
similar way lessen the barriers to entry for fledgling IT entrepreneurs in the Western
Cape by providing:

      physical infrastructure (bandwidth, hardware. software licences)
      mentorship (business plan coaching, one-on-one mentorship. entrepreneurial
       support)
      subsidised office support services (reception support and communication
       services) and
      networking (access to potential clients and partners).


3 Executive Summary
CITI’s mission is to promote Cape Town as a global ICT hub and gateway into Africa,
thereby facilitating the creation of jobs and prosperity through ICT. CITI has assisted in
the development of local business development through a number of interventions such
as the Bandwidth Barn. Demand for the existing Bandwidth Barn has exceeded
expectation and progress has been made towards the relocation to larger premises. The
increased need is an indication of the value and real need that the Bandwidth Barn is
filling. There is growing need to expand the scope of benefit to the Previously
Disadvantaged Individuals. The intention of the proposal is to motivate towards the
creation of another layer that created the space for emerging entrepreneurs through the
Launch Pad idea.

The funding will be used to firstly augment existing programmes and secondly, to
develop new programmes that add value to the current service offering. The main
objective of the interventions is to create the space to share “lessons learned” from
within the community. Programmes such as the Entrepreneurial Support Programme
(ESP) and CITI Venture Partners have been articulated in the proposal.
This proposal details, in accordance with the application format the terms for support
funding of the Bandwidth Barn incubator and its newly conceived Launch Pad, an
SME enabling project managed by the Cape Information Technology Initiative (CITI).


4 The Proposal
This is a proposal for support funding of the Bandwidth Barn incubator and its newly
conceived Launch Pad, an SME enabling project managed by the Cape Information
Technology Initiative (CITI).

   4.1 Overview
4.1.1 CITI
The Cape Information Technology Initiative (CITI) is an independent, not-for-profit
company promoting the development of the knowledge economy in the Western Cape.
Its primary mission, in fostering a vision of the Cape as a gateway to Africa’s New
Economy, is to stimulate and promote the IT and Communication Industries in the Cape
and in South Africa. In so doing, CITI plays a pivotal role in developing the ethos and
intellectual capital of the ICT industry.

CITI focuses on four core areas:
    Cluster development (events, networking & Cluster facilitation),
    IT Business Development (incubation and Entrepreneurial support)
    IT Skills Development and
    IT Research & Policy

The initiative operates as an independent private-public partnership, working closely with
local, provincial governments and business to fulfil its goals. It was founded on the belief
that the Western Cape has numerous competitive advantages, such as good
infrastructure, tertiary education facilities, a competitive exchange rate, lifestyle
attraction, and a good platform to launch into Africa. Thus giving it the potential to be an
important ICT centre of Southern Africa.

4.1.2 Bandwidth Barn
CITI’s most successful project to date has been The Bandwidth Barn - an ICT incubator
and hub of shared facilities for ICT start-ups in the Western Cape. The objectives of the
Barn are to serve as a focus point for ICT entrepreneurship in the region, to provide
affordable always-on internet connectivity to ICT start-ups, and a supportive cross-
pollinating community to create synergies. In response to an overwhelming demand for
space, (the Barn has grown from housing twelve to forty-five companies in the past
eighteen months) the Bandwidth Barn will be moving to 128 Stand Street in March 2003.
The Bandwidth Barn is funded by both the Department of Trade and Industry (DTI) and
UUNET and is managed by CITI. Bandwidth Barn is a wholly owned subsidiary of CITI.

Further details can be found at www.bandwidthbarn.org..
4.1.3 Launch Pad
The Launch Pad is a physical networked environment within a vibrant ICT incubator
(Bandwidth Barn) that will facilitate the growth and development of previously
disadvantaged ICT entrepreneurs.
     The Launch Pad will lessen the barriers to entry for fledgling IT entrepreneurs in
       the Western Cape by providing:
     physical infrastructure (bandwidth, hardware. software licences)
     mentorship (business plan coaching, one on one mentorship. entrepreneurial
       support)
     subsidised office support services (reception support and communication
       services) and
     networking (access to potential clients and partners).



4.1.4 Founders, Partners and Governance
The Bandwidth Barn was founded by CITI in January 2001, with the DTI and UUNET as
primary funders. A similar Incubator, the Innovation Hub, was launched in
Johannesburg, South Africa in mid 2001, with which CITI and the Bandwidth Barn have
created a partnership to strengthen national linkages.

Partners of the Bandwidth Barn and specifically the Launch Pad
    National Business Initiative (business plan development)
    UCT Graduate School of Business Center for Innovation and Entrepreneurship
      (events, training & mentorship)
    ISETT Sectoral Education Training Authority (training)
    “First Tuesday” (networking)
    Microsoft (sponsorship of software licenses)
    Macromedia (sponsorship of software licenses)
    UUNET SA (funding and bandwidth)
    University of the Western Cape (mentorship)
    City of Cape Town (The Smart City Strategy highlights the need for job creation,
      IT development and skills transfer. The Launch Pad is a vehicle through which
      CITI can significantly contribute to making this a reality, capitalising on the
      existing infrastructure of the Bandwidth Barn.)

The Bandwidth Barn is governed by a Board of Directors that comprises:
    Greg Reis (CEO of BSG Africa, an anchor tenant of the Barn),
    Alan Levin (a senior manager and representative of the Provincial Government of
      the Western Cape Department of Knowledge Economy and eGovernment and
      also Africa’s representative for ICANN),
    Andy Rabagliati (A successful entrepreneur, tenant of the Barn and founder of
      Wizzy.com)
    Nirvesh Sooful (Head of IT Development for the City of Cape Town)
    Masedi Molosiwa (Executive Director of CITI)
    Geoff Hainebach (Retired CEO of Siemens SA and Chairman of CITI)
The Auditing Firm for the Bandwidth Barn is Moores Rowland, with Craig MacGillivray
attending all Bandwidth Barn Board meetings. Mallinicks Attorneys are the Barn’s
honorary legal advisors.


4.1.5 Business Prospects for the short to long term
      Cape Lab – a skills development initiative to prepare local entrepreneurs for
       “going global”. This successful series of workshops were held from October 2002
       and will continue until July 2003. The purpose of these events is to share
       “lessons learned” from local entrepreneurs who have enjoyed International
       success. The future events will focus on the legal, financial, and labour issues of
       “going global”.
      Entrepreneurial Support Programme (ESP) – the ESP is one of CITI’s most
       important “bottom-line” activities and supports IT entrepreneurs by acting as point
       of contact for industry information, facilitating strategic networking, matchmaking
       entrepreneurs with potential partners and customers, facilitating funding, offering
       business leads and business strategy advice and providing infrastructure through
       the Bandwidth Barn.
      CITI Venture Partners – A proposed Venture Capital fund for Bandwidth Barn
       tenants to access for business development. This fund will be managed by three
       retired International Venture Capitalists, and will be launched by June 2003.
      ICT Sector Scan – an annual overview of the ICT sector in the Western Cape,
       highlighting trends, flows, investment opportunities, growth, success stories, and
       possible hurdles facing the industry. This provides the market intelligence to CITI
       in identifying focus areas for project development, and valuable sector
       information for foreign investment.


  4.2 Bandwidth Barn Incubator Facilities
4.2.1 Location
Currently the Bandwidth Barn is located at 17 Lower Long Street, Cape Town, but due to
the demand for space the Barn will be relocating to larger premises at 128 Strand Street,
Cape Town, in March 2003.

4.2.2 Physical Facilities and Services Offered
      Instant, flexible start-up office space,
      Cost effective premises through economies of scale,
      Shared facilities (reception, office equipment, meeting rooms, boardrooms,
       conference facilities, and a networking café),
      Experienced in-house technical support,
      Subsidised 24/7 Internet connectivity,
      CITI umbrella support,
      Cluster group advantages (Collaboration and synergies),
      Vibrant business cross-pollination,
      Like-minded IT entrepreneurial environment,
      Access to business opportunities and leads via CITI network,
      Networking opportunities,
      The use of the CITI network to trumpet the industry success stories by
       showcasing the journey of industry champions and share lessons learned,
      Access to CITI Directors and stakeholders,
      Support from the CITI entrepreneurial support programme,
      Flexible hot-desking facilities,
      Access to CITI venture partner fund,
      Parking and Security.

In addition to the services above, a dedicated coordination team will address the needs
of each of the businesses selected to participate in the Launch Pad. The team will
evaluate the development processes of each of these businesses and provide
     Business plan coaching
     Industry knowledge
     Access to mentors
     Access to Finance (Venture Capital, Angel, and Seed)
     Encouragement for innovation
     Business opportunities
     Events - CITI will facilitate regular events, “listening lunches” and seminars for
        the entrepreneurs to interact with the broader community and also to learn from
        the experts in the industry
     Access to training
     Coordination of external business development opportunities, via the Graduate
        School of Business (University of Cape Town), and other universities and training
        facilities involved with entrepreneurial support initiatives.

Features specific to the Launch Pad;
    hot-desks or small offices that provide convenient lock-up and go facilities,
    24/7 subsidised internet connectivity,
    telephone lines,
    computer hardware and sponsored software licences,
    office equipment – desks, chairs et al,
    computer training and
    reception services

The Launch Pad will minimize the isolation of operating on one's own. Clustering
entrepreneurs and supporting companies together in one vibrant space reduces the
hurdles that start-ups face, particularly those from disadvantaged communities.

  4.3 Management Team and Staffing
A General Manager supported by the Bandwidth Barn Board of Directors manages the
Bandwidth Barn. In addition, two receptionists are employed to assist with secretarial,
administrative, bookkeeping and reception services. Contract IT support, Auditing and
legal services are also utilised.

The Executive Director of CITI provides executive leadership to the Bandwidth Barn,
while the CITI Marketing Manager is responsible for PR, Marketing, Fundraising, and
most importantly to trumpet the successes emerging from the Bandwidth Barn. This
capacity will also be focused on the Launch Pad and its successes.
An Entrepreneurial Support Coordinator will be employed by April 2003 to formally
manage the Entrepreneurial Support Programme. The Coordinator will be employed and
will engage with the CITI team to capitalise on current infrastructure and networks.

The Launch Pad will also be managed by a dedicated coordinator who will be a member
of the Bandwidth Barn Management team. Staff and services will be utilised from both
CITI and the Bandwidth Barn to ensure that available resources are shared and that the
Launch Pad has access to existing CITI networks.

An additional team member will be employed to provide secretarial support for the
Launch Pad.

A team of private mentors have been identified from a pool of retired captains of the ICT
Industry to provide coaching, mentorship, and business leads via their own existing
networks to the tenants of the bandwidth Barn and the Launch Pad.

   4.4 Evolution and Business Model of the Bandwidth Barn
4.4.1 Rational of current approach
As a result of a shared need for clustering within the ICT industry, CITI embarked on an
incubation project driven by demand. Initially CITI housed four start-up companies from
its premises in St. Georges Mall in Cape Town. Within six months, the benefits of
incubation had become apparent. A suitable building was secured and by January 2001
with three anchor tenants and twelve start-up businesses moving into Cape Town’s first
ICT incubator. By securing a commitment from a number of established IT companies
(Anchor tenants) Bandwidth Barn’s Board of Directors were able to negotiate a longer
lease and therefore provide a cost effective environment through economies of scale to
start-up IT businesses. Currently the Barn houses 45 tenant companies and by March
2003 55 tenant companies will be housed in the new premises. The anchor tenants were
carefully selected and provide additional cost effective services to the Barn and its
tenants. These include provision and management of a server room, technical support,
and marketing and communication services.

4.4.2 Operational Costs and main revenue streams
Operational      Amount            Funder       Amount          Other         Amount
Costs                              Revenue                      Revenue
Rent             $180 666          Department   $100 000        Events        $2400
                                   of Trade
                                   and
                                   Industry
Salaries         $5300             UUNET SA     $ 50 000        Rent from     $17 390
                                                                Tenants
Office           $500                                           Project       $4700
Equipment                                                       based
                                                                sponsorship
Cleaning         $120
Infrastructure   $5700
Cost
Marketing        $1800
Business         $1200
Development
Events and       $3500
Networking
International    $2500
delegations


4.4.3 Investment models
The CITI Venture Partner Fund is currently being developed to address the need for the
seed phase financing of start-up IT companies. This fund comprises Angel Investors,
and provides tenants access to both national and international funders. The primary role
of CITI is that of facilitation and maintenance of investment networks. Six Finance
providers are corporate members of CITI to ensure early investment opportunities.
These organisations provide monthly events, seminars and workshop, usually held at
the Barn to keep tenant companies and the broader ICT community abreast of investor
needs and trends


4.4.4 Business development and Marketing Plans
The CITI marketing programme drives the vision, networking, funding and connection to
markets influences, both nationally and internationally.
Marketing activities include:

       Building brand awareness and support for the Cape IT cluster as well as CITI,
        Bandwidth Barn, and the Tenant Companies.
       Driving networking activity levels, implementing systems to enable networking
        and maintaining the quality of networking, eg through the hosting of valuable
        events.
       Raising operational funding to support CITI’s projects and operations, e.g.
        through the signing up and servicing of CITI Corporate members with defined
        benefits.
       Fostering connections to global markets for Western Cape IT businesses through
        international marketing support


4.4.5 Strategy to attract and methodology used for selecting Tenant
      companies
To date, word of mouth has been Bandwidth Barn’s primary marketing tool used to
attract tenant companies. Due to the uniqueness of the offering, the rate of response has
created a waiting list for occupancy. The local media have over the past eighteen
months published over thirty-five press articles relating to the Barn. The Barn has also
enjoyed significant television coverage.

The Bandwidth Barn General Manager, together with CITI’s Executive Director screen all
applications prior to submission to the Bandwidth Barn Board, who make the final
decision.

The selection criteria include:
    ICT business
    Start-up (less than two years)
      Preference given to previously disadvantaged applicants


4.4.6 Target sectors and type of target tenants
Target sectors include: Information Technology, E-Commerce, and Communications.
Target tenants include start-up ICT businesses, with preference given to previously
disadvantaged applicants.


4.4.7 Range of services offered to tenant companies
      Instant, flexible start-up office space
      Cost effective premises through economies of scale
      Shared facilities (reception, office equipment, meeting rooms, boardrooms,
       conference facilities, and a networking café)
      Experienced in-house technical support
      Subsidised 24/7 Internet connectivity
      CITI umbrella support
      Cluster group advantages (Collaboration and synergies)
      Vibrant business cross-pollination
      Like-minded IT entrepreneurial environment
      Access to business opportunities and leads via CITI network
      Networking opportunities
      CITI will trumpet the industry success stories by showcasing the journey of
       industry champions and share lessons learned.
      Access to CITI Directors and stakeholders
      Support from the CITI entrepreneurial support programme
      Flexible hot-desking facilities
      Access to CITI venture partner fund
      Parking and Security.

4.4.8 Scope of business operation and training services
Training of Tenant Companies takes the form of events, workshops, Listening Lunches,
and seminars at the Barn. These initiatives have included the exploration of industry
successes, niche market specialist presentations, venture capital workshops, and the
hosting of international delegations to keep local entrepreneurs abreast of international
trends and potential pitfalls.

4.4.9 Strategies to protect value and market intellectual property of
      incubator and tenants
The Cape Lab initiative is an initiative to prepare local entrepreneurs for going global. A
large portion of these workshops is dedicated to the protection of Intellectual Property,
Copyright, Labour laws, and Tax.

In addition, Mallinicks Attorneys donate two hours per month to discuss the importance
these issues and how to protect against possible pitfalls. Tenants have been offered
reduced rates by these attorneys, for private consulting, should they require additional,
specific attention.
4.4.10      Activities involved in the graduation process aimed at
      increasing the profitability and long-term sustainability of tenant
      companies
An annual Graduation and Award ceremony is held to trumpet the successes that have
emerged from the Barn. These awards are presented by CITI and Barn Directors,
together with Industry leaders and Funders. In the past, the very nature of these
successes has attracted Television, Printed media, and Government representatives. It
is at this point that involvement in the CITI’s Corporate membership programme is
encouraged, in order to continue to benefit from Business leads, Networking
opportunities, Research and Events offered by CITI.


4.4.11         Follow-up and post graduation activities
CITI has a number of exciting follow-up activities that include, Press Officers on the CITI
Website, inclusion in the Annual Sector Scan, inclusion in International Delegation visits,
and successful companies are offered the opportunity to be keynote speakers at CITI
events. These graduates form a critical element of CITI’s international marketing
activities by being showcased at Tradeshows both locally and internationally.

CITI ensures that these successes are recognised by National Government’s SAVANT
project. This is an international marketing campaign spawned by the Department of
Trade and Industry to assist the ICT industry of South Africa to gain international
exposure.

   4.5 ICT strategy
The ICT sector plays a significant role in the incubator process of Bandwidth Barn as
described in the five models below.

      The networked incubator model: facilitated by a cluster development agency:
       the CITI lead Bandwidth Barn programme is an example of this and provides
       shared facilities, discounted rentals and business networking opportunities to
       start-up companies.
      Spun-off company model: an established company launches a new venture,
       providing start-up capital, resources and infrastructure for an equity stake. The
       mobile payment services company, Fundamo, and the online bank, 20Twenty,
       are examples of this model emerging from the financial services sector.
      Outsourced incubation model: the IT department of a company is spun-off as
       a new company providing outsourced services to the parent company. Safmarine
       Computer Services is an example in this instance.
      Venture Capital incubator model: a venture capital firm provides support to a
       start-up company with a view of providing facilities, business support and early
       round funding (or elements of these) in exchange for equity, with a view of exiting
       at a second round funding stage. HBD Venture Capital is currently initiating an
       example of this model.
      The garage model: many self-funded entrepreneurs take this route; some are
       bought out by larger ventures, for example, Thawte SA was bought out by
       Verisign US in 2000
Start-up and SME business support is available to new ICT ventures through
government, SME and cluster development organisations, Regional Chambers of
Commerce, entrepreneurial coaching companies, NGOs, universities, techikons and
training colleges, and private individuals who provide mentoring services. Much of this
support is in the form of information services, formal training, workshops and seminars,
and the passion of retired businesspersons. However, there is still much scope for
business support and capacity building among emerging black IT entrepreneurs within
the incubation space. In developing incubation strategies for the ICT industry in South
Africa there is a need to establish local and collaborative business relationships and
open knowledge flows between black entrepreneurs, opportunistic entrepreneurs and
established ICT companies. These strategies, supported by industry-lead training needs
to ensure that the demand for ICT skills are met, fosters ICT innovation and enable a
local ICT economy to compete nationally and internationally.

South Africa's government has placed a strong emphasis on ICT sector development
through the implementation of a National ICT strategy. The plan proactively addresses
ICT penetration, particularly for disadvantaged segments of the society. The government
has implemented a number of frameworks for policies, infrastructure, partnerships and
task forces that will help South African communities play a role in the global economy.
The ICT sector will not be directly responsible for a significant number of new jobs, but
rather is positioned as an enabler of increasing competitiveness in other sectors, as a
source of future export earnings, and as a key enabler to achieve development goals.

South Africa is facing a significant “brain drain” in technical and entrepreneurial ICT
skills, with an estimated 200-300 ICT-skilled resources leaving the country each month.
This is caused by the rapid growth in demand for ICT skills worldwide and little
opportunity (jobs, remuneration, and innovation) in South Africa. Current unemployment
rates are very high (30-35 percent), but it is also difficult to find a sufficient supply of
skilled ICT workers to meet the rising demand.

To address the knowledge worker shortage, the government has created the Human
Resources Development Fund. The fund is being used to provide grants and subsidies
to promote the provision of adequately skilled human resources for ICT


   4.6 Business Strategy
The Cape IT Initiative was established in alignment with the strategies of the provincial
government of the Western Cape and the City of Cape Town administration. Both
administrations have identified ICT as a sector and industry deserving of strategic
support and otherwise. The primary role CITI has been to promote the role of ICT
towards economic development in the region. CITI will continue to exert effort and
energy in the focus areas which are:
    ICT Cluster Marketing and Building Networks
    ICT Business Development
    ICT Skills Development
    ICT Policy and Research.

The primary thrust for CITI effort is to create and enabling environment that will allow
small to medium enterprises using information communication technologies to flourish.
In addition, the team has identified three overlapping areas requiring attention in order to
meaningfully bring about the desired economic change. The following have been
identified:

   1. Partnerships - establishing partnerships with other service providers and
      organisations whose efforts will benefit the development of the ICT industry.
      Being a cluster facilitator in the first instance, CITI recognises that establishing
      meaning partnerships will assist towards the realisation of the goals.
   2. Black economic empowerment – the need to address the inequalities that have
      resulted from the past require that organisations like CITI tackle the issue and
      challenges around empowerment as a priority. It is clear that the range of
      stakeholders, once they work together will be able to bring about some
      meaningful change.
   3. Exporting – Assistance to entrepreneurs interested to export services and
      products from the Western Cape provides for real economic growth. There a
      various factors that place the Western Cape in an advantageous position in
      exploring the opportunity to sell services to offshore clients.



   4.7 Training
Training of Tenant Companies takes the form of events, workshops, Listening Lunches,
and seminars, at the Barn. These initiatives have included industry successes, niche
market specialist presentations, venture capital workshops, and the hosting of
international delegations.

Within CITI’s Entrepreneurial Support Programme, the full training programme
addresses software training, business plan coaching, financial training, business ethics,
business development, marketing and PR. This training programme runs throughout the
year and is also available to entrepreneurs housed outside of the Barn. The programme
is constantly monitored and evaluated and feedback steers future development of the
programme.

Within the proposed Launch Pad the vision is to create an after-hours training
programme where tenants have the opportunity to identify specific training needs, which
are then provided weekly. These training sessions will draw on the services of
stakeholders, industry specialists and universities. This will ensure a cost effective and
highly skilled training resource. An added training service to be made available will be
personal and life skill coaching.

   4.8 Networking and Marketing Services
Networking:
The CITI Stakeholders Forum comprises forty-five decision makers from industry,
education and government. This forum meets monthly to discuss the objectives, goals,
and deliverables of the initiative. This forum provides a valuable networking opportunity
for CITI, Bandwidth Barn and its tenants.
Monthly industry events have proved to be one of CITI’s greatest assets, bringing the
industry together and attracting local and international keynote speakers via its network.
The calendar of events for 2003 is available on the CITI website (www.citi.org.za).

The Marketing Programme includes a structured communications programme. CITI
deliberately structures the communications programme because communicating with
various levels of stakeholders is a core function of CITI and inherent to building the ICT
cluster.

By its nature CITI’s purpose is to bring together a wide range of IT stakeholders. As
such communication is a direct function of the organisation. As such we continue to
invest in systems, such as a quarterly CITI newsletter, the CITI website etc. to manage
and generate communication within the cluster.

The success of CITI is largely due to its collaboration and networking with a number of
agencies, associations and government initiatives, such as;
    IT Association SA
    The Black IT Forum
    The ISETT SETA -Sectoral Education Training Authority
    The Shuttleworth Foundation
    Bridges.org
    The Gateway Discovery Trust
    The Desmond Tutu Foundation
    The Innovation Hub
    The Cape Manufacturing Advisory Council
    Cape Chamber of Commerce and Industry
    City of Cape Town – Economic Development
    Provincial Government of the Western Cape – Knowledge Economy and E-
       Government
    National Department of Trade and Industry
    Wesgro, The Western Cape Investment and Trade Promotion Agency

Communication Portal Website:
Information about CITI, the CITI community, and the Western Cape IT cluster are
communicated on a CITI website. The website is an important source of information for
potential ICT investors in the Western Cape as well as existing businesses.

Media & Publicity Programme
The function of external communication and generating publicity about the cluster falls
within the PR and Media Programme. The marketing of the Western Cape’s ICT industry
is done largely by generating and influencing media coverage of the cluster. A dedicated
PR company, Beachhead Media, has been contracted to maintain the media profile of
CITI, Bandwidth Barn and its Tenant Companies.



  4.9 Portfolio and Networking
The Bandwidth Barn currently houses forty-five Tenant Companies, ranging in size from
single operators to businesses with a staff compliment of twelve.
The single operators, usually focused on research and development activities, reside in
an open-plan cost effective hot-desk environment. These tenants often use software
development as an income generator to finance their research and development
objectives.

The next tier of companies, usually no larger than four members, focus on a broader and
more diverse range of services, developing niche products and services for specialist
industries.

The larger companies, usually the Anchor Tenants, are more established companies
with blue-chip clients. These companies focus on strategic development and consulting
to diverse clients in the corporate and non-corporate sectors. The industries and clients
serviced range throughout all sectors, from Gold, Financial Services and Health care, to,
Wine, Timber and Fishing.

The benefit of housing these Tenants in a tiered environment, cross-pollination of
services and products affords the opportunity for the smaller companies to attract larger
and more viable contracts. An example of this occurred when Anglo Gold approached
the Barn for an IT solution. Four of the Tenant Companies collaborated to win the
contract. This would not have been possible individually.

Communal areas and physical networking spaces have proved to be one of the Barns
greatest benefits, enabling Tenants to engage in collaboration opportunities. These
communal spaces also provide platforms for Tenants to share their successes and
motivation.

These networking initiatives and partnerships provide a wide array of business leads,
share a common vision and create sustainable business development for Tenant
Companies.

The Barn engenders a healthy spirit of competition, as Tenant Companies compete for
business leads generated by CITI. This competitive environment is imperative to the
long-term sustainability of Tenant Companies.



  4.10     Financials
 Please find the financial statements attached.

5 Project Administration
Financial and Accounting
CITI and the Bandwidth Barn General Manager, who is responsible for all Bandwidth
Barn Financial Processes, administer the Financial management of the project. Monthly
Management accounts are produced by the Bandwidth Barn General Manager and
presented to the Board of both CITI and the Bandwidth Barn. The auditors, Moores
Rowland, perform a bi-annual audit of both entities.

Risk Management
       The Risk Management processes are the responsibility of the CITI Executive Director
       and the Bandwidth Barn General Manager. Risks that are managed on an ongoing basis
       include; non-payment of rent by Tenant Companies, a volatile property rental market,
       Fraud, Security, Intellectual Property, adequate and timeous funding and cash flow.

RISK                     APPROACH                                            RESPONSIBLE PERSON
Non-payment of rent       Tenants pay 1 month’s rental deposit              Barn General Manger
                          Physical Rent collection
                          Rental Policy adopted
                          Open channels of communication
Volatile property rental  Long term rental contract signed                  Barn General Manager
market                    10% escalation clause included
Fraud                     IP and Model of Barn copyright                    Barn General Manager
                          Staff contracts robust
                          Three signatories required for financial
                             transactions over R10 000
Security                  24/7 security guards on site                      Barn General Manager
                          Electronic access control
                          Robust Firewalls on server provided by
                                UUNETSA
Intellectual Property     IP managed by Mallinicks                          Barn General Manager
Funding                   Regular meetings                                  CITI Executive Director
                          Regular reporting
                          Open communication channels
Cash-flow                 Regular Management accounts                       Barn General Manager
                          Line of Funding with Cape of Good Hope
                            Bank in place for bridging finance
                          Large unbudgeted expenses funded
                            independently



       Competitive Processes
       All processes of tender, recruitment, contractors, tenants, and participants in training and
       conferences are transparent and adhere to the CITI and Bandwidth Barn selection
       criteria. An empowerment strategy has been developed and adopted in accordance with
       government requirements. The CITI and Bandwidth Barn Management teams coordinate
       all competitive processes to ensure CITI’s objective of facilitating jobs and prosperity.
       This process ensures fair and transparent selection.

       Administration Arrangements
       A template has been designed and implemented to monitor progress towards stated
       goals. Weekly team meetings address results and priority areas, which are in turn
       reflected in quarterly reports to all funders and stakeholders of Bandwidth Barn. The
       focus areas reported on include; Cluster development and networking activities,
       Business development, Skills development, and Policy.
       Monthly Directors meetings are held to monitor overall performance of the incubator.

       Communication Strategy
The Bandwidth Barn’s communication strategy to the broader business community and
potential donors and partners, includes the following foci;

      Quarterly Newsletters to the local, national & international mailing lists
      Monthly Stakeholder meetings
      Industry Information emails
      Events
      International Marketing Campaigns
      Media, both local and international
      Websites – (www.citi.org.za) and (http://www.bandwidthbarn.org/)

6 Main Activities
  6.1 Business development
      Entrepreneurial Support Programme:          The functions that CITI performs for
       entrepreneurs include:

          o   Being a point of contact for industry information
          o   Matching them with and introducing them to partners and customers
          o   Providing business strategy advice
          o   Providing infrastructure through the Bandwidth Barn
          o   Facilitating Funding

       A dedicated coordinator will be appointed to further enhance these services by
       providing:

          o   Mentorship and Coaching - A pool of retired business resources has been
              identified by the CITI network. Funds are needed to retain the services of
              the mentors. A dedicated resource needs to be employed to ensure that a
              structured programme, operational systems and optimum usage of the
              mentors are developed.
          o   CITI Venture Partners - A proposed Venture Capital fund for Tenants of
              the Barn to access for business development. This fund will be managed
              by the Chairman of CITI, together with three retired International Venture
              Capitalists, and will be launched by April 2003. The administration and
              management of this service will reside in the Bandwidth Barn. Additional
              funds are required to ensure effective and efficient development of this
              service. Profits will not be generated by CITI or the Bandwidth Barn in the
              delivery of this service.
          o   Launch Pad - The objectives and goals of the Launch Pad are to provide
              infrastructure, training, mentorship, and networking opportunities for
              previously disadvantaged entrepreneurs. A minimum of eight fledgling
              companies will be nurtured within the existing Entrepreneurial Support
              Programme and barriers to entry will be significantly reduced. These
              entrepreneurs will be carefully and transparently selected and will be
              required to contribute to a small portion of their expenditure. A substantial
              portion of the required funding is needed to implement this project.
          o   Cape Lab - An initiative aimed at preparing local entrepreneurs for
              international expansion. This initiative will be expanded by developing
               linkages to African and American markets for tenants of the Barn. This
               will require international marketing campaigns in collaboration with
               existing initiatives such as the Department of Trade and Industry’s
               SAVANT campaign to market the SA ICT industry abroad. Funding is
               needed to host international delegations, the Cape Lab Events, and its
               marketing activities.
           o   National linkages and expansion strategies - A recent partnership with the
               Gauteng based Innovation Hub Incubator will ensure that local companies
               have a cost effective base to explore national business development.
               Similar partnerships with Durban and Port Elizabeth would ensure a
               greater national expansion strategy. Funding is needed to develop
               relationships and formalize these partnerships.


  6.2 Training
The Bandwidth Barn will continue to offer training to Tenant Companies in the form of
events, workshops, Listening Lunches, and seminars.

Within CITI’s Entrepreneurial Support Programme, the full training programme
addresses software training, business plan coaching, financial training, business ethics,
business development, marketing and PR. This training programme runs throughout the
year and is also available to entrepreneurs housed outside of the Barn. The programme
is constantly monitored and evaluated and feedback informs future development of the
programme. The development and improvement of the training offering within Bandwidth
Barn requires further funding. Historically these events have proved to be a major
resource for Tenant Companies.

Within the proposed Launch Pad the vision is to create an after-hours training
programme where tenants have the opportunity to identify specific training needs, which
are then provided weekly. These training sessions will draw on the services of
stakeholders, industry specialists and universities. This will ensure a cost effective and
highly skilled training resource.

  6.3 Networking

      Events – Funding is required for Tenant Company launches, Training initiatives
       and specialized workshops.
      Listening Lunches – These have been fundamental to CITI’s success. Frequency
       and target market expansion will enhance the value of these activities.
      Stakeholders Forums - No additional Funding is required for this activity
      Hosting of International Delegations -These delegations have a vast range of
       skills, knowledge and business opportunities from which the Tenants benefit.
       Funding is required to increase the frequency and participation of these
       delegations with the Tenant Companies to encourage skills transfer, cross
       continental business linkages, joint ventures and partnerships.
      Representation on ICT Industry Boards and Advisory Counsels - Being a regional
       cluster development facilitator, it is imperative that the lessons learned from both
       CITI and Bandwidth Barn are transferred nationally. These meetings provide
       strong national linkages and networking opportunities. Travel and associated
       costs have hindered regular participation at these meetings, and therefore
       additional funding is required to enhance the level of participation.


  6.4 Marketing
Enhancing the CITI and Bandwidth Barn Brands requires extending marketing efforts
both nationally and internationally. This will be achieved through the PR and Events
campaigns, creating an international presence, building relationships for foreign
investment and gaining access to national and international companies outside of the
ICT sector.
     PR Campaign - To maintain the momentum of current PR activity, support is
       required to assist in the financing of the contracted PR agency, Beachhead
       Media.
     Events campaign - The existing events have proved to be successful in providing
       training, skills transfer, networking opportunities and business leads to Tenant
       Companies. Frequency and quality of these events can be improved on through
       additional funding.
     Building relationships and creating an international presence to attract foreign
       investment - Western Cape ICT sector and in particular the Bandwidth Barn
       would gain valuable international exposure if a representative attended key
       international industry events, such CeBIT, the annual ICT Trade show in
       Hanover, Germany. South African ICT success stories need to be highlighted in
       the international press to encourage greater international investment in South
       Africa’s innovative ICT industry.
     Access to National and International companies outside of the ICT Sector -
       Showcasing the Barn and its Tenant Companies, by inviting decision makers
       from the corporate and non-corporate sectors to participate in networking
       activities will provide greater access and exposure to cross-sectoral business
       opportunities.
7 Deliverables
         Initiative                         Deliverable                Timeframe
Business Development

Entrepreneurial Support           Employ an Entrepreneurial       April 2003
Programme                          Support Coordinator
                                  Design an Entrepreneurial       April – May 2003
                                   Support Programme
                                  Recruit appropriate mentors     May 2003
                                  Create a CITI Venture Partner   May 2003
                                   Fund
                                  Implement Programme             June 2003

Launch Pad                      Employ a Launch Pad               May 2003
                                  Coordinator
                                Design the Programme              June 2003
                                Infrastructural Setup of the      July 2003
                                  Launch Pad
                                Select suitable tenants           July 2003
                                Implement the Launch Pad          August – Sept 2003

Cape Lab                        Host monthly workshops            Jan – July 2003
                                Select suitable international     March – April 2003
                                 expansion partners
                                Showcase success nationally       May 2003 onwards
                                 and internationally through
                                 Media

National Expansion              Explore national partnership      Feb – March 2003
Strategies                       opportunities with similar
                                 initiatives
                                Develop these partnerships        March – April 2003
                                Showcase Bandwidth Barn           March 2003
                                 nationally                        onwards
                                Network to ensure national        March 2003
                                 benefit for local tenants         onwards

Training
Entrepreneurial Support         Develop training programmes,      Feb – June 2003
Programme                         curricula and schedule
                                Implement Software                July 2003
These courses will be             development training
repeated throughout the         Implement Business Plan           July 2003
financial year, according to      coaching
demand                          Implement Financial training      August 2003
                                Implement Business Ethics         August 2003
                                Training
                              Implement Business                   September 2003
                                Development Training
                              Implement Marketing and PR           October 2003
                                training
                              Implement Media training             November 2003

Networking                      Listening Lunches                  Bi-Monthly from
                                                                    February 2003
                                                                    onwards
                                ICT Industry Events                Monthly from
                                                                    February 2003
                                                                    onwards
                              Stakeholders Forums                  Monthly
                              Sub-cluster Forums                   Monthly
                              Exhibit at Local Trade Shows         July and Sept 2003
                              Receive, Host and Manage             Monthly from
                               International delegations            February 2003
                                                                    onwards
                                Support export initiatives         Monthly from
                                                                    February 2003
                                                                    onwards

                                National Linkages
                                                                    Every second Month
                                                                    for February 2003
                                                                    onwards
Marketing
Enhance the brands of CITI      PR campaign                        February 2003–
and the Bandwidth Barn                                              March 2004
                                Events campaign                    February 2003–
                                                                    March 2004

                                Strengthen Media relationsFebruary 2003–
                                                           March 2004
                                Showcasing Tenant success February 2003–
                                 stories                   March 2004

Increase national and           Attend international       industry March 2003, June
international presence in        events                              2003 and
press and industry events                                            September 2003
in order to foster
connections to global           Meet with international press     March 2003, June
markets                                                            2003 and
                                                                   September 2003
                                Publish ICT       sector     scan July 2003
                                 internationally
8 Monitoring and Evaluation
The monitoring and evaluation process will include the following:
    A bi-annual external Audit
    Quarterly Management and progress report submitted to infoDev
    Quarterly financial reporting and funding reimbursement request
    Tenant Feedback analysis reports
    Tenant selection and graduation framework
 T

9 Budget
See Attached spreadsheet

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:52
posted:9/2/2011
language:English
pages:24