A multibillion-rand tender for an end-to-end enterprise resource planning (ERP) solution, to be used throughout national and provincial government, elicited only two bids.
The tender forms part of a long-standing priority objective to produce an integrated financial management system (IFMS). The project is a National Treasury-led joint initiative including the Department of Public Service and Administration and the State IT Agency (SITA). The system is critical to tightening financial control, eradicating corruption and improving public sector efficacy. It will encompass core operational functionality, including supply chain management, financial management, HR management, payroll, inventory, and business intelligence.
The tender replaces the decade-long attempt to develop a hybrid IFMS solution. Despite having already conservatively cost an estimated R1 billion, Cabinet abandoned the project after investigations determined it lacked feasibility.
The endless difficulties saw National Treasury assign the accountant-general to closely monitor activity.
High expectations
Cabinet also endorsed a new strategy to procure a "tier one ERP commercial-off-the-shelf solution". SITA's tender briefing drew over 150 attendants but its presentations failed to please.
"First time round, government specified both established and bespoke software in the hope of stimulating our software development industry. Admirable perhaps; but, without early investment, destined to fail. Conversely, IFMS 2.0 prevents local participation by requiring software ownership, including source code and intellectual property. It's bizarre. System integrators can provide the same software and access to vendor expertise with the added benefit of market insight, experience in local conditions and often larger skills pools," argued one local player who asked not to be named.
David vs Goliath
The competing vendors present a sharp contrast.
The first bid came from 3i Infotech South Africa. Listed on the National Stock Exchange of India and the Bombay Stock Exchange, the company is headquartered in Mumbai and lists offices in 14 countries. Its ERP offering, Orion Enterprise, largely targets the manufacturing and processing industries, and is marketed as an end-to-end integrated software application and deployment platform based on the ERP II model. Independent reviews could not be found. Financial reports note the company is fighting lingering difficulties, and implementing a number of financial and operational initiatives.
3i Infotech is up against software giant, SAP. Gartner's latest figures on ERP software confirm its firm hold on the leadership position with a 24% market share. Its nearest competitor, Oracle, holds 12% of the market. The organisation isn't, however, invincible; as seen in recent media scrutiny of its management changes and loss of key personalities to the market. As for its software, the Internet provides reports of numerous failed deployments. Closer to home, SAP's involvement in the City of Joburg's disastrous billing system has attracted significant attention.
Nevertheless, the largest threat to its bid is likely to come from its involvement in the first IFMS project. Government's attempt to rollout SAP's HR management software encountered significant difficulties and required a patch to enable integration with existing systems. The situation was an embarrassment for SITA.
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