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Greasing the wheels of government

Of the R8 billion spent on technology in 2004, 60% came from the public sector, underlining the importance of government IT spend and its direct relationship with the buoyancy of SA`s IT fortunes.
By Russell Bennett
Johannesburg, 13 Jun 2005

This year, government department investment in ICT solutions is expected to grow compared to last year. This is largely due to the urging of central government and President Thabo Mbeki in his State of the Nation address for the government sector to leverage the significant amount of innovation created by private sector organisations in recent years.

<B>The upside of a managed service model</B>

John Miller of the AST Group explains that the real benefit of a managed services model lies in the consistency of approach to technology. This allows for the delivery of higher levels of service, as well as higher uptime and better integration between the government departments. A public sector IT platform built on open standards is a clear focus for SITA, as government departments need to be able to communicate and share information easily:
* Within the government structure.
* With local private sector institutions.
* With other governing bodies across the globe.
Other advantages, says Miller, are:
* Managed services deliver the business benefits required - in this case improved customer service - at a lower cost, as you are able to extract more efficiency from every component of the solution, including human resources.
* It`s a perfect model for organisations without significant amounts of in-house IT skills, as AST, or any other service provider, is able to remotely solve problems, answer questions about the system and train users of the system more effectively in the first place.
@SidebarBrief = The upside of a managed service model

Innovations help increase operational efficiency and employee productivity, while reducing the overall cost to the enterprise. Of particular interest to the public sector is the enabling of improved service delivery to its customers, the citizens of our country.

This ambitious goal of transposing modern corporate practices into government operations is not new to the ears of the citizenry, as Mbeki`s illustrious predecessor Nelson Mandela held similar visions for the future of South African government. Although this utopian system is some way from being fully realised, the public sector has in recent years made great strides in building an improved service delivery platform from the legacy- and proprietary system-dependant quagmire of historic inefficiency.

Comments Herman Venter of Business Connexion (BCX): "Service delivery is now at the forefront of government agencies` minds. High customer service is no longer a goal but a minimum requirement, and ICT solutions can be deployed to move government from an assisted service to a more self-service model while creating a more efficient operational environment."

Public sector business is, as is to be expected, often a lengthy and complex engagement. Any corporation as diverse as the government with its multitude of departments and functions, mixed with the unique infrastructure challenges posed by local circumstances, is going to need extensive systems and procedures in place for smooth interoperation and organisation. Any corporate generating this massive a portion of the revenue for the entire sector is going to expect that vendors provide the best services available to assist in this mammoth task.

"As the source of more than 30% of Sun Microsystems` revenue worldwide, the public sector is a major focus for us," comments President Mtuli, State IT Agency (SITA) account sales manager at Sun South Africa. "The government is also the largest employer in the country without which the economy would fail. IT still has a lot to offer this environment, and with business systems driving this sector I believe we can address many of the common challenges being faced."

Across the globe, this working relationship between ICT and the public sector is frequently framed in the context of a public-private partnership (PPP). Through the PPP model, selected IT organisations provide services upfront as part of a long-term fiscal relationship.

Continues Mtuli: "There are a number of very successful PPP relationships, with the benefits of these activities to be accrued later over a long-term period, both direct and indirect. They are an opportunity for resources and skills to be shared in order to drive more efficient processes and ultimately a more profitable economy."

Adds Gordon Frazer, MD of Microsoft SA: "There are many different facets of a PPP relationship, but in the end I believe there`s great value for both parties to derive from these things. The key word here is `partnership`. Without first making sure that the respective parties fully understand their respective roles, the PPP is doomed to fail. Also if the relationship is only about corporate social development through investment without sound business sense backing it up, you aren`t building true partnerships and again are unlikely to come to the optimum solution."

The long-awaited ICT charter, due to be ratified imminently, is testament to the fact that the public sector recognises the base of innovation from which the ICT sector is born, and explicitly protects and strengthens the chances of the smaller, local SMME (small, medium and micro enterprises) component of the ICT sector with respect to winning a significant amount of government IT spend.

Says M-IT executive director Nkosinathi Khumalo: "Gone are the days when an entire government contract is awarded to just one of the local IT giants. Now as per the ICT BEE charter, 30% to 40% of any major project must be sourced via smaller local partners with spend touching across all the regions of the country for the contract to be awarded in the first place. Like the trend in the corporate sector, the government would rather see a single large organisation act as the primer for the deal, and therefore provide a single point of contact as well as accountability for the project, with multiple smaller partners to be called upon by this primer organisation to fulfil components of the solution."

Andrew Stekhoven, MD of the South African arm of Escrow Europe, believes this is where his organisation can play a pivotal role. Although the professional escrow services on offer by Escrow Europe are not yet well known locally, Stekhoven maintains that this is an ideal relationship through which government agencies can engage with the SMME sector. At the same time they eliminate the risks of placing critical systems in the hands of a one or two-person team.

"Not only is there innovation in SMME for the government to tap into, it is also a form of empowering the local community," says Stekhoven. It provides for equality on the important question of long-term sustainability when evaluating tenders for a new implementation.

"Professional escrow takes the technological components of any mission-critical solution and stores copies of this intellectual property in a vault, so that should some tragedy for instance strike, the SMME organisations whose business continuity depends on these bespoke solutions are able to come to us for an up-to-date copy of the source code and examples of custom hardware that they may support themselves or get an outsourcing agency skilled up in a very short time."

The escrow is entered into by the owner of the IP, the end-user of the solution, and an independent third-party (in this case Escrow Europe). Crucially, it includes technical verification of the deposit as well as constant management to ensure the stored version is kept up to date.

The journey towards an e-government model is a long one, with challenges for both the public sector embarking upon it and the private sector, which will provide the underpinnings of this venture. Along with the peculiar historical and infrastructural South African challenges, this process will require all the innovation and co-operation of both private and public ICT organisations to achieve the desired end goal.

The role of SITA

SITA plays a pivotal role in transforming the public sector with its influence on procurement strategies and driving government IT strategies from a holistic overview perspective. This ensures all agencies work towards similar goals on platforms that interoperate at an internal communications level.

Although the theory behind this mandate is good, private enterprises have had cause for concern in the past as SITA vacillated between fulfilling this role as facilitator and being a provider of essential services itself, playing both sides of procuring and delivering ICT services to the crucial government sector. This put the private enterprises with which it was meant to be building mutually beneficial partnerships at a disadvantage in the actual delivery of the required services.

Lufuno Nevhutalo, executive chairman of Cornastone, elaborates: "In the past, SITA has been a disappointment, caught somewhere between a provider of IT services and a facilitator for government IT requirements. Under its new leadership, however, there seems to have been a complete turnaround. The deliverables and the core business of SITA itself have been redefined now under the leadership of a business person who understands the optimal role of the agency."

With private sector confidence in the organisation being gradually restored, SITA can concentrate on addressing the significant challenges that lie ahead on the public sector`s road to transformation. Comments BCX group executive Isaac Mophatlane: "Lately we have been finding it a battle to get tenders finalised within the specified time, an issue which not only impacts us, but slows the delivery of improved service levels to the government departments striving for this objective. I believe this is SITA`s challenge, to accelerate this tender procedure and form stronger partnerships with key ICT strengths to deliver services back to the government."

Concludes Mophatlane: "From our point of view, the only way to improve service delivery in the public sector is for SITA to foster meaningful relationships with the private sector. For transformation to be successful, the agency must form a closer bond with private IT enterprises to leverage the experience and skills in these organisations effectively for mutual success."

The key word here is partnership.

Gordon Frazer, MD, Microsoft SA

At E.Com Institute, MD Cassim Parak is adamant that private sector enterprises need to assist SITA with its "set of challenges second to none" more proactively. "SITA has gone through its power plays, but the fundamentals are now in place to really address the IT problems and requirements of the public sector. Although I think there is no doubt that government has already made good progress along this path, we as citizens and businesses of SA need to encourage and support these systems more through knowledge transfer and information. It`s my view that progress could be quicker, and that the private sector [businesses] are the only ones able to ramp this speed up even more."

For the public sector to achieve its goals of improved service delivery while lowering costs, SITA`s role as the facilitator and co-ordinator of government ICT projects becomes even more crucial to success. The agency has a formidable task before it, and only through clearly defined processes and close co-operation with the private sector will the desired outcome ever be reached.

Holistic solutions

The massive Seat Managed Services (SMS) tender, conservatively valued at R2.5 billion, has revealed not only the preferred list of ICT suppliers to the government sector, but also some of the strongest trends emerging in this space.

From our point of view, the only way to improve service delivery in the public sector is for SITA to foster meaningful relationships with the private sector.

Isaac Mophatlane, group executive, Business Connexion

Says John Miller of the AST Group: "Traditionally, when the public sector has procured IT, it`s been a case of purchasing hardware, software, security solutions and so on in isolation. The SMS tender is far more than that, however. As the name suggests, it looks at more of a managed service model. This tender is all about providing holistic solutions to address the business requirements of government departments, from the application to the infrastructure."

Although the SMS tender is the public sector`s first foray in this direction, another trend has emerged from existing successful PPP arrangements that mirror findings in the private sector seeking enhanced efficiency from IT systems. That is the importance of consolidation as the first step in the creation of a better platform.

Carol Rogers is the service delivery manager for the Department of Labour contract at Siemens Business Services. This partnership has been in place for three years and is a consistent model of a successful PPP.

Says Rogers: "We`ve had to consolidate a lot of disparate applications and platforms first, to drive down costs and create an IT base from which to deploy new services. This was achieved through several projects. For instance we have deployed Citrix to drive down the costs of bandwidth and optimise usage of existing capacity, and moved the Oracle database over to a Unix platform to lower licensing costs. At this point, there`s been far more consolidation happening than transformation exercises."

That said, transformation is firmly under way at the department, thanks to a newly rewritten UIF system, which has moved from being employee-centric to client-centric. This system, which has been live since the beginning of April, forms the basis for a client-focused overhaul of the department, which will include the use of mobile technology, according to Rogers.

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