A competitor analysis approach towards evaluating single-choice information technology service provision to the parastatal sector of South Africa

Service provision agreements, which restrict users to single service suppliers, are bound to impact on the long-term survival of such service providers. This is particularly true if such a business strategy is not guided by sound management principles, necessary skills and a strong competitor focused culture. In the absence of these essential principles, user demand and preferences will gradually shift towards competitor suppliers. To investigate this theory, this article examines the importance of service users in the information technology (IT) parastatal industry of South Africa. The article presents a case study whereby the service performance of a single-choice information technology service provider in the parastatal industry of South Africa is measured against multi-choice private service providers without any provisional agreements. The outcome of the case study reveals that single-choice service provision options with provisional agreements have a limited chance of success if not supported by strong service user inputs and an active focus on competitor analysis to protect market share inherited by the single-choice service provider. In fact, poorly developed competitor analysis capability of single-choice service providers is likely to hinder its ability to match the service levels of private service providers, thereby creating frustration amongst service users who face increasing pressures to deliver greater outputs from within their organisations and from external customers through the use of IT services from service providers. Moreover, provisional strategies that disallow sound competition amongst service providers are bound to impact negatively on user preferences as well as information technology skills development opportunities which are required to improve service provision generally and long-term survival in particular.