State IT Agency
Mandate, Successes,
Challenges, and Strategic
Direction
to
Parliamentary Portfolio Committee on
Telecommunication and Postal Services
SITA’s Legislative Mandate & Overview
To improve service delivery to the public through the provision of information technology, information
systems and related services in a maintained information systems security environment to departments and
public bodies; and to promote the efficiency of departments and public bodies through the use of
information technology (SITA Act, 1998).
Act means “SITA Act 38 of 2002”; Regulation means “SITA General Regulations R.902 of 2005”.
2
New Macro Structure
Minister: Telecommunications
& Postal Service
SITA BOARD
Procurement (Subsidiary)
ICT Security (Subsidiary)
Company Secretary
CEO
Internal Audit
Executive Support
CORPORATE SERVICE & GOVERNANCE
Deputy CEO
ICT DELIVERY
Deputy CEO
Corporate
Service
Finance
Risk
Management
Technology
Management
ICT Service
Delivery
Customer
Relations
Systems
Executive:
Corporate
Services
Chief Finance
Officer
Chief Risk
Officer
Chief
Technology
Officer
Executive:
Service
Delivery
Executive:
Customer
Relations
Executive:
Systems
3
SITA EE Stats per Division
Note: Patterson Job grades identifies the level of the job on the organization hierarchy
4
SITA Highlights (1 of 2)
~ 7000 public
service
outlets
connected on
a government
secure
network
Secure
Hosting of
Government
Systems that
ensure
transactions
on time
Provide
secure Citizen
Identity
verification to
Financial
sector
~ 740 000
IT Help Desk
calls per year
~ 1400
Customer
Service
Agreements
(incl SLA
Annexes)
~ 562 000
Senior
Certificates
processed
annually
5
SITA Highlights (2 of 2)
Developed
Minimum
Interoperabili
ty Standards
MIOS v5 to
enable data
exchange
between
government
systems.
Primary
contributor to
the GITOC
Government
Wide ICT
Strategy
2000 Young
South
Africans
benefiting in
SITA’s
learnerships,
internships
and bursaries
Bridging the
digital divide
with 15 highend equipped
ICT
laboratories
in Schools in
primarily rural
and periurban areas
Managing and
Hosting the
Presidential
Hotline to
promote
Citizen
participation
on improving
public service
delivery
Techno-Girl 8722 girls in
job
shadowing;
283 studying
at Higher
Education;
289 employed
6
Procurement challenges
Pain points
Root Causes
Long delivery timeframes
to complete procurement
process
Locked into contracts after
expiry
•
•
•
Limited staff capacity and capability.
Limited of transaction progress visibility.
Lack of customer-centric approach.
•
Lack of effective contract management –
process inefficiently conducted manually.
•
Poorly defined specifications and evaluation
criteria.
Limited supply market intelligence
Tenders cancelled
•
Poor communication between
SITA and customers
High prices for goods/services
procured
•
•
•
Lack of customer-centric approach
Lack of formal periodic progress reporting to
customers.
Poor stakeholders alignment of the process
•
•
Limited ability to leverage economies of scale.
Absence of commodity management approach
Limited development for SMME • Limited knowledge of supplier market.
• Lack of segmentation of the vendor master
growth
• Absence of dedicated capability.
SOURCE: SITA data; client interviews
7
Procurement Strategic intervention
Procurement controls
Pain points
Long delivery timeframes
to complete procurement
process
Locked into contracts after
expiry
Tenders cancelled
•
•
•
Improve capability and capacity through training and recruitment.
Ring-fence Procurement function through a new business unit.
Introduce automated transaction tracking system.
•
Implementing effective contract management framework
supported by an automated contract management system.
•
•
•
Establish independent specifications review committee.
Build supply market intelligence capacity to provide market insight.
Build ICT competency within Procurement.
Poor communication between • Introduce formal periodic progress report to customers i.e.
weekly. Including introducing automated workflow system.
SITA and customers
High prices for goods/services • Introduce commodity approach to leverage economies of scale to
drive price reduction. Introduce fact based negotiations.
procured
Vulnerability to Fraud and
Corruption
Limited development for
SMME growth
SOURCE: SITA data; client interviews
•
•
Implement continuous security vetting and integrity checks.
Declaration of interest per transaction including probity checks
including lifestyle audits.
•
•
•
Build supplier market capacity.
Introduce segmentation of the vendor master.
Introduce a dedicated capability and SMME help desk.
8
ICT service delivery challenges
Pain points
1
▪
No defined E Government strategy, lack of robust infrastructure,
limited bandwidth to support transaction intensive applications.
▪
▪
▪
Security controls are not integrated to include physical security
data and ICT i.e. national key point expectation.
Have not updated controls to address rise in Cybersecurity threats.
Insufficient disaster recovery
Transversal
capabilities
▪
▪
▪
End-of-life technologies ie. mainframe based.
Limited system maintenance skills.
Insufficient capabilities to deliver on new customer requirements.
Managed
Infrastructure
▪
▪
▪
▪
25 Years old data centres - prone to breakage.
High Power Consumption.
Poor investment on hosting technologies.
No DR site.
▪
▪
▪
Low last mile bandwidth
Poor rural coverage
Fragmentation and duplication of networks
Digital
Government
2
Security
3
Root Causes
4
Network
9
ICT service delivery strategic intervention
Pain points
1
Digital
Government
2
Security
3
Transversal
capabilities
4
Managed
Infrastructure
Service Delivery Controls
▪
▪
▪
▪
▪
▪
Ring-fence security function in separate business unit.
Implement integrated security system (Physical, ICT, people)
Partner with SSA for regular review of SITA’s security.
▪
Modernise the aging Government Wide Transversal systems (BAS,
PERSAL, LOGIS) i.e. Hosting the new IFMS.
Integrate and enhance Government sector transversal solutions to
improve interoperability amongst cluster systems and increase
productivity of government service delivery machinery.
▪
▪
▪
▪
▪
Network
Partnership with Government Agencies.
Develop strategic framework for implementation of E-Government
(standards costs, equipment, local content , budget etc)
Adopt a top-down approach on e-Government initiatives and
strategic direction (e-Government as an immediate priority).
▪
▪
Explore strategic partnerships with State agencies on DR sites.
Upgrade and modernise existing data centres ,cloud computing and
virtualisation , UPS.
Consolidate and upgrade Government shared ICT infrastructure.
Extend footprint and upgrade existing Government network in line
with SA connect Broadband targets.
Enhance the security and reliability of the Government network.
Partner with Telkom and BBI in improving BB services.
10
Focus on E-Government
Government Goal: Make at least 70% of public facing
services online accessible to citizens by 2016.
Strategic Direction Approach
• Partnership with Government
Agencies.
• Develop strategic framework
for implementation of EGovernment (standards
costs, equipment, local
content, budget etc.).
• Adopt a top-down approach
on e-Government initiatives
and strategic direction (eGovernment as an
immediate priority).
11
SITA’s transformation journey will be implemented
through 23 initiatives across 4 key categories
▪1
▪2
▪3
▪4
▪5
▪6
▪7
▪8
Establish procurement Subsidiary
Implement contract tracking & management system
Implement new approach to technical specifications
Launch new procurement process
Establish contract model
Launch On-line Buying
Introduce new organisation model
Revise SITA’s procurement policies
IT Service
Portfolio
Procurement
A
B
SITA
19
▪ Create transparency on cost
20
▪ Integrate and automate finance and
procurement process
21
▪ Develop and implement new customer
engagement model
22
▪ Recruit top talent to SITA
23
▪ PMO Strategy Institutionalization
D
Business
Enablers
C
Organisational Health
9 Consolidate & modernise data
centres
10 Upgrade bandwidth & network
11 Design and implement security
system
12 New IT Service Delivery Model
System Integration & e-GOV
13 Build internal capabilities
14 Design and implement retained
organisation
15
▪ Create a customer centric
organisation
▪ Reward and recognise exceptional
16
performance
▪ Build an open and trusting culture
17
18
▪ Empower SITAzens to fully leverage
their capabilities
12
Summary of Auditors General, 2013/14
1
Unqualified audit report
2
Reported issues
• 2 Issues relating to the reliability of reported performance information
• 7 Issues relating to non-compliance with procurement information
• 2 Other instances of non-compliance (material audit adjustments, irregular
expenditure)
3
Audit Findings
Interventions
•
•
•
•
•
•
• Action plan for each findings has
been developed and to be
managed from the CFO office.
• Dashboard to facilitate monitoring
has been developed to be
updated monthly.
13 Finance
30 Supply Chain Management
6 Corporate Services
3 Company Secretary
2 Performance Management
1 Customer Relation Management
13
Financial Sustainability Planning
STATE INFORMATION TECHNOLOGY AGENCY (SOC) LTD
STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH
In Rand
Revenue
Cost of sales
Gross surplus
Gross margin
Other income
Opex as % of revenue excluding the bonus provision
Opex as % of revenue including the bonus provision
Operating expenses
Operating expenses
Research and Development
Bonus Provision
Surplus from operating activities
Net Finance income
Surplus before income tax
Income tax expense
Surplus for the year attributable to shareholder
Assumptions
Revenue growth (as a percent of previous FY)
Net surplus (as a percent of revenue)
Net Finance Income increase with 4.5% per year
based on inflation
Other Income increase
Research costs (as a percent of revenue)
AUDITED
RESULTS
2013/14
BUDGET
2014/15
BUDGET
2015/16
BUDGET
2016/17
BUDGET
2017/18
BUDGET
2018/19
4 692 013 369
3 849 400 431
842 612 938
18.0%
5 182 472 519
4 145 978 015
1 036 494 504
20.0%
5 700 719 771
4 560 575 817
1 140 143 954
20.0%
6 270 791 748
5 016 633 398
1 254 158 350
20.0%
6 897 870 923
5 518 296 738
1 379 574 185
20.0%
7 587 658 015
6 070 126 412
1 517 531 603
20.0%
37 317 228
20.0%
20.0%
936 570 443
935 504 543
1 065 900
(56 640 277)
123 953 377
67 313 100
(21 891 736)
45 421 364
30 690 714
15.2%
16.2%
789 050 984
777 370 878
11 680 107
49 991 175
228 143 058
52 250 000
280 393 058
(78 510 056)
201 883 002
32 071 796
15.2%
16.2%
867 956 083
855 107 966
12 848 117
54 990 293
249 269 375
54 601 250
303 870 625
(85 083 775)
218 786 850
33 515 027
15.2%
16.2%
954 751 691
940 618 762
14 132 929
60 489 322
272 432 363
57 058 306
329 490 669
(92 257 387)
237 233 282
35 023 203
15.2%
16.2%
1 050 226 860
1 034 680 638
15 546 222
66 538 254
297 832 273
59 625 930
357 458 203
(100 088 297)
257 369 906
36 599 247
15.2%
16.2%
1 155 249 546
1 138 148 702
17 100 844
73 192 079
325 689 224
62 309 097
387 998 321
(108 639 530)
279 358 791
9.5%
1.0%
-8.0%
3.9%
10.0%
3.8%
10.0%
3.8%
10.0%
3.7%
10.0%
3.7%
10.3%
-12.1%
0.0%
4.5%
15.4%
0.2%
4.5%
4.5%
0.2%
4.5%
4.5%
0.2%
4.5%
4.5%
0.2%
4.5%
4.5%
0.2%
14
Capital Expenditure
15
Current Status (in response to media coverage)



Financial Health

While there is room for improvement, SITA’s current financial position is nowhere near collapse

As part of our strategy implementation programme all financial systems, processes and controls are being reviewed to
achieve more efficient financial management, with improved financial growth and sustainability
Governance

SITA’s leadership team is one hundred percent committed to the highest standards of corporate governance and ethical
behaviour and does not hesitate to confront breaches, dealing with them decisively and swiftly

The irregularities and malpractices reported on in the said media reports were presented as an exposé which caught the
leadership off guard, they were actually part of the findings of an internal investigations commissioned by the SITA leadership
team with the precise objective to uncover any potential irregularities
Procurement


Service Delivery


Our newly adopted strategy implementation programme is currently reviewing and refining the procurement system to
ensure high levels of efficiency with quick turn-around times and optimisation of economies of scale
Our strategy is geared towards reviewing and enhancing every aspect of our operations, ensuring that SITA becomes
completely customer centric, being fully equipped and capable to deliver top-end services to our clients
Staff Related Matters

SITA has in the last number of years, unfortunately, been subjected to large scale staff and skills losses

The strategy implementation programme has sufficient focus on our efforts to build organisational capabilities to enable SITA
to deliver on its mandate while becoming an employer of choice within the ICT industry
16
Thank You
Questions